NHUT NGUYEN HUU MINH In our recent survey of in-house counsel, Russin & Vecchi was selected as a Law Firm of the Year in the Banking & Finance category. Nhut Nguyen Huu Minh, a partner in the Ho Chi Minh City office shares his views on the borrowing landscape in Vietnam. What Are Your Observations Regarding The Borrowing Trends Within The Vietnamese Market Currently And For The Next 12 Months? After a low-slung 2022, offshore borrowings turned around and gained an uptick in 2023. Offshore borrowings by the private sector in 2023 reached around 26% of the GDP, surpassing 2021’s figure of 23%. The FDI segment remains the key player, taking most of the big ticket borrowings. For example, we acted in several construction financings in 2023, like the financing for the construction of the largest water purifier production facility in Vietnam by Kangaroo International JV. The momentum is expected to continue for the next 12 months, as many FDI companies make efforts to come back when the world recession improves. How Does The Regulation Of Offshore Borrowing Compare To That Of Onshore Borrowing In Vietnam? Offshore borrowing is regulated differently than onshore borrowing in a number of aspects. The government regulates offshore borrowings mainly from the perspective of managing the volume of foreign currency inflows and outflows. One key difference is offshore loans must be used for a limited number of specific purposes, for example, as one of the permitted purposes, an offshore loan can only be used to refinance an existing offshore debt (not an onshore debt) of the borrower. Generally, medium or long-term offshore loans (having...