The Ultimate Guide to Navigating USD Transactions in Vietnam: Maximizing Benefits and Avoiding Hefty Fines

In the context of global economic integration, the demand for USD in Vietnam is increasing, from international payments to studying abroad and investment. However, USD transactions in Vietnam are tightly managed by the State Bank to ensure exchange rate stability and monetary policy. The following are important regulations that individuals and businesses need to be aware of when conducting USD transactions.

Principles of USD Usage

According to the Foreign Exchange Ordinance of 2005 (amended and supplemented in 2013) and Circular No. 32/2013/TT-NHNN (amended by Circular No. 03/2019/TT-NHNN), all payment activities, listing, quoting, or pricing in USD on Vietnamese territory are prohibited, except for cases permitted by the State Bank. This is to limit “dollarization” and promote the use of the Vietnamese Dong (VND) in domestic transactions.

Authorized Locations for USD Transactions

USD transactions are only allowed at authorized institutions:

Commercial banks: Major banks such as Vietcombank, BIDV, Techcombank, Agribank, MB, etc., are permitted to buy and sell USD according to the State Bank’s regulations.

Foreign exchange agents: Some gold shops or authorized organizations are only permitted to buy USD cash with VND and are not allowed to sell USD for VND.

Online services: Banks such as BIDV (through BIDV SmartBanking) and Techcombank (through digital banking) support convenient USD buying and selling through applications.

Conducting USD transactions at unauthorized locations, such as the black market, is illegal and may be subject to penalties under Decree 88/2019/ND-CP.

Permitted Cases for USD Usage

According to the regulations, some permitted cases for USD usage include:

For businesses: Making USD transfer payments to non-residents for the provision of goods/services; export processing enterprises are allowed to make USD payments to other export processing enterprises; paying for international bidding costs, oil and gas projects, or transferring investment capital abroad; paying visa fees/charges to foreign diplomatic agencies in Vietnam.

For individuals:

Residents (Vietnamese citizens) can buy USD cash at banks with a maximum limit of 100 USD/person/day (or equivalent for a 10-day stay) for purposes such as tourism, study, business trips, or medical treatment abroad.

Non-residents can make USD transfers to other non-residents or make export payments for goods/services.

Paying salaries and bonuses in USD to foreigners working in Vietnam.

Special cases: USD transactions related to security, national defense, or approved by the State Bank.

USD Savings: 0% Interest Rate

According to Decision 577/QD-NHNN, the current interest rate for USD deposits at commercial banks is 0% for all terms. Despite the lack of profitability, USD savings are still popular due to their safety and convenience for needs such as studying abroad, tourism, or international payments. Major banks such as Vietcombank, BIDV, Techcombank, and Agribank offer USD savings services with flexible terms ranging from 1 to 36 months.

USD Transaction Procedures

Individuals: Need to provide identity documents (ID card/passport) and proof of USD usage purpose (visa, tuition fee notification, labor contract). Transactions can be made at bank branches or through online applications.

Businesses: Need to submit a business license, proof of USD usage purpose (contracts, invoices), and sign a USD buying/selling contract with the bank.

USD Exchange Rate

The USD exchange rate is determined based on the interbank exchange rate announced by the State Bank, with a +/-5% margin (according to current regulations). Banks are required to display the exchange rate at the transaction point or on their official website to ensure transparency for customers.

Penalties for Violations

According to Clause 23 of Decree 88/2019/ND-CP on administrative penalties for foreign exchange activities:

– A warning shall be given for one of the following violations: buying or selling foreign currencies between individuals or buying or selling foreign currencies at organizations that are not permitted to exchange foreign currencies, with a value of less than 1,000 USD (or equivalent in other currencies);

– A fine ranging from 10 million VND to 20 million VND shall be imposed for one of the following violations: buying or selling foreign currencies between individuals or buying or selling foreign currencies at organizations that are not permitted to exchange foreign currencies, with a value ranging from 1,000 USD to less than 10,000 USD (or equivalent in other currencies); buying or selling foreign currencies between individuals with a value of less than 1,000 USD (or equivalent in other currencies) in case of recidivism or multiple violations.

– A fine ranging from 20 million VND to 30 million VND shall be imposed for one of the above violations with a value ranging from 10,000 USD to less than 100,000 USD (or equivalent in other currencies);

– A fine ranging from 80 million VND to 100 million VND shall be imposed for one of the above violations with a value of 100,000 USD or more (or equivalent in other currencies); Payment for goods and services in foreign currencies with a value of 100,000 USD or more (or equivalent in other currencies) contrary to the provisions of law.

In addition to the fine, the foreign currency may also be confiscated.

Notes on USD Transactions

Choose a reputable bank: Select banks with competitive exchange rates and safe online services (Face ID, OTP).

Customs declaration: Declare to customs when carrying more than 5,000 USD in cash when exiting the country.

Avoid the black market: Transactions outside authorized institutions carry not only exchange rate risks but also the possibility of heavy penalties.

Technology support: Many banks provide USD buying, selling, and savings services through applications, saving time and enhancing security.

Conclusion

Regulations on USD transactions in Vietnam are designed to ensure the stability of the financial market and control foreign currency flows. Individuals and businesses need to be aware of these regulations to avoid violations and take advantage of modern and safe banking services. With a 0% interest rate on USD savings, the choice between saving in USD or VND should be made based on specific financial goals.