According to the data of the Foreign Investment Agency of the Ministry of Planning and Investment announced by June 20, 2022, the total newly registered capital, adjusted and contributed capital to buy shares, buy capital contribution of foreign investors has reached over 14.03 billion USD, showing that Vietnam is an attractive investment market. To have effective corporate financial management in this rapidly developing market, the role of accounting firms, especially foreign-owned companies, with a team of experienced professionals is indispensable. This article will provide an overview of foreign investors’ accounting service business conditions in Vietnam.
According to Vietnam’s commitments in the WTO Schedule of Commitments, accounting activities are activities related to accounting and auditing and bookkeeping services (CPC 862).
Accordingly, this service does not limit in terms of the form of commercial presence as well as the ratio of capital contributed by foreign investors.
According to the provisions of Vietnamese law, accounting services is a conditional business sector, that requires enterprises under a number of conditions including:
The form of operation
According to the provisions of the Law on Accounting, investors can choose one of three forms of operation of a foreign accounting firm, including:
(i) contribute capital with an accounting service enterprise established and operating in Vietnam to establish a Joint-Venture providing accounting service; or
(ii) establish a branch of a foreign accounting service enterprise; or
(iii) provide cross-border services as prescribed by the Government.
In addition, before conducting business activities, enterprises need to be granted a Certificate of Eligibility for providing accounting services.
Issuance of the Certificate of Eligibility for providing accounting services
(i) Regarding the type of company: must be either a multi-member limited liability company; a partnership company; or a private enterprise;
(ii) Must have an Enterprise Registration Certificate, Investment Registration Certificate or equivalent documents as prescribed by law;
(iii) For multi-member limited liability company: Having at least 02 (two) capital contributing members as accountants with accounting practice certificate (“APC”) in Vietnam; or for partnership company: 02 (two) general partners as accountants with APC; or for private enterprise 02 (two) accountants with APC.
(iv) The legal representative, Director or General Director of the company shall be an accountant with APC.
(v) Must ensure the capital contribution ratio of accountants with APC in an enterprise as well as the capital contribution ratio of corporate members according to the Government’s regulations for multi-member limited liability companies: The capital contribution ratio of accountants with APC must account for more than 50% of the charter capital of the company; The corporate members may contribute up to 35% of the charter capital, in case there are many corporate members contributing capital, the total capital contribution ratio shall not exceed 35% of the charter capital.
Steps to set up a company
To set up an accounting firm, investors need to take the following steps:
Step 1: Apply for an investment registration certificate
Step 2: Apply for an enterprise registration certificate
Step 3: Apply for a Certificate of eligibility for accounting service
Accounting service providers must purchase professional liability insurance for their practicing accountants within 60 days from the date on which the practicing accountant is granted the Certificate of eligibility for accounting service.
The article is based on applicable law at the time noted as above and may no longer be appropriate at the time the reader approaches this article as the applicable law has changed and the specific case that the reader wishes to apply. Therefore, the article is only for reference.