Things to know when operating a foreign currency exchange agency

Foreign currency exchange is an integral part of the global financial system and is prevalent in specific countries, including Vietnam. Engaging in foreign currency exchange activities is a regulated business sector according to the law. In this article, Long Phan will provide you with some insights into considerations when operating a foreign currency exchange agency. Please refer to the following article!

Operating a foreign currency exchange agency

Conditions for operating a foreign currency exchange agency

Economic organizations conducting foreign currency exchange agency activities must meet the requirements stipulated in Article 4 of Decree 89/2016/ND-CP regarding conditions for operating foreign currency exchange agencies, the provision of services for receiving and disbursing foreign currency by economic organizations. Moreover, economic organizations can only conduct foreign currency exchange agency activities after being granted a Certificate of Registration as a foreign currency exchange agency by the State Bank of Vietnam. 

Conditions for the State Bank of Vietnam to consider and grant a Certificate of Registration for foreign currency exchange agencies to economic organizations are as follows:

Business location

Regarding the business location, the place where the foreign currency exchange agency is established must meet the following conditions:

• Accommodation facilities for tourists accredited by the state tourism management agency with a rating of 3 stars or above;
• International border gates (land, air, sea);
• Entertainment areas with prizes for foreigners licensed to operate;
• Ticket offices of foreign airlines, shipping companies, foreign tourism offices, and international ticket offices of Vietnamese airlines;
• Tourist areas, shopping centers, supermarkets visited by foreign tourists for sightseeing and shopping.

Infrastructure

• Having a foreign currency exchange transaction procedure, ensuring security and safety during the foreign currency exchange process.
• Displaying a publicly announced exchange rate board and a signboard with the name of the authorized credit institution and the name of the foreign currency exchange agency at the transaction location.

Status, role

• An economic organization can only act as a foreign currency exchange agent for one authorized credit institution
• Being authorized by an authorized credit institution to act as a foreign currency exchange agent.

Procedures for issuing a Certificate of Registration for foreign currency exchange agencies

Application composition

• Request for approval of foreign currency exchange agency registration (according to the form in Appendix 1 issued with Circular 11/2016/TT-NHNN).
• Commitment letter from the economic organization with a certified copy of identification documents (if any) regarding the establishment of the foreign currency exchange agency at the designated location as prescribed; Commitment letter from the economic organization about acting as a foreign currency exchange agent for only one authorized credit institution.
• Certified copies of documents proving the establishment and lawful operation of the organization: Business registration certificate or investment registration certificate or equivalent documents.
• Report on equipping the economic organization with a complete publicly announced exchange rate board, signboard with the name of the authorized credit institution, and the name of the foreign currency exchange agency at the transaction location.
• Foreign currency exchange transaction procedure including the following main contents: security and safety measures during the foreign currency exchange process; recording, invoicing for customers, retaining documents, invoices, accounting records; accounting, reporting regimes.
• Certified copy of the foreign currency exchange agency agreement signed with the authorized credit institution.

Procedure for registering foreign currency exchange agencies

Implementation procedure

• Submit 01 (one) set of documents by post or directly to the State Bank branch in the province, centrally-run city where the economic organization establishes the foreign currency exchange agency.
• In case the application is incomplete but valid, within 10 (ten) working days from the date of receiving the application, the State Bank branch in the province, centrally-run city will request additional documents in writing. 
• The processing time is 30 (thirty) working days from the date of receiving a complete and valid dossier. In case of rejection, the State Bank branch in the province, centrally-run city will provide a written explanation of the reasons.

Notes when registering foreign currency exchange agency activities

When opening a foreign currency exchange agency, economic organizations need to consider the following issues:

• Types of permits required: Business license; Certificate of Registration as a foreign currency exchange agency; Business premises meeting fire prevention and fighting requirements (if any).
• Providing information and evidence of the financial source and financial capacity of individuals or organizations when participating in foreign currency exchange agency activities.
• Preventing violations related to financial crimes such as money laundering abroad through currency exchange, ensuring compliance with regulations on preventing financial crimes.

Notes on foreign currency exchange 

Consultancy services for foreign currency exchange agency operations

To support the operation of foreign currency exchange agency businesses, Long Phan provides services within the scope of work as follows: 

• Advising on solutions and strategies to manage risks in operating foreign currency exchange agencies. 
• Advising on solutions and strategies to manage risks in operating foreign currency exchange agencies.
• Consulting on resolving legal issues and disputes arising during the operation of foreign currency exchange agencies.

Operating a foreign currency exchange agency requires strict compliance with regulations and legal provisions, as well as maintaining financial safety standards and compliance with financial laws. In this article, we have provided you with information on foreign currency exchange agency operations. For more detailed information, you can contact Long Phan via hotline 0906.735.386 for assistance.