According to the data of the Foreign Investment Agency of the Ministry of Planning and Investment announced on  June 20th, 2022, the total newly registered capital, adjusted and contributed capital to buy shares, buy capital contribution of foreign investors reached over 14.03 billion USD, showing 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 firm in Vietnam.

1. Market access conditions

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.

2. Business conditions

According to the Vietnamese legal provisions, accounting services are  a conditional business sector, requiring  enterprises to follow  a number of conditions including:

2.1 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:

  • contributing capital with an accounting service enterprise established and operating in Vietnam to establish a Joint-Venture providing accounting service; or
  • establish a branch of a foreign accounting service enterprise; or
  • provide cross-border services as prescribed by the Government.

Additionally, before conducting business activities, enterprises need to be granted a Certificate of Eligibility for providing accounting services.

2.2 Issuance of the Certificate of Eligibility for providing accounting services

  • Regarding the type of company: must be either a multi-member limited liability company; a partnership company; or a private enterprise;
  • Must have an Enterprise Registration Certificate, Investment Registration Certificate or equivalent documents as legally prescribed;
  • For multi-member limited liability company: Having at least 2 (two) capital contributing members as accountants with accounting practice certificate (“APC”) in Vietnam; or for partnership company: 2 (two) general partners as accountants with APC; or for private enterprise 2 (two) accountants with APC.
  • The legal representative, Director or General Director of the company shall be an accountant with APC.
  • 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 company’s charter capital; 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.

3. 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.

4. Points to note

  • Register for the annual list of accountants with The Ministry of Finance or the professional association of accountants and auditors authorized by the Ministry of Finance.
  • Notify in writing (enclosed with supporting documents) to the Ministry of Finance within 10 days from the date of change of the contents specified in the Law on Accounting.
  • Before October 31st of each year or at the request of a competent authority, an accounting firm must report on the maintenance of business conditions for accounting services according to the prescribed form to the Ministry of Finance, at the same time, enclosing the prescribed documents if there are any changes compared to the most recent submission.
  • Enterprises providing accounting services must send a report on the operation of the preceding year in writing and electronic data according to the prescribed form to the Ministry of Finance before each April 10th.
  • 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 laws applicable at the time noted as above and may no longer be appropriate at the time the reader approaches this article as the applicable laws and the specific cases that the reader may wish to apply may have changed. Therefore, the article is for referencing only.

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