Audit and Compliance in Vietnam: A Guide for Foreign Investors

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  • Foreign-owned enterprises (FOEs) and representative offices (ROs) are obligated to have their annual statements audited.
  • Investors should be aware that FOEs and ROs have different audit and compliance requirements.
  • The government aims to replace the Vietnamese Accounting Standards and adopt the International Financial Reporting Standards by 2025.

The Vietnamese Law on Accounting governs the principles for accounting, audits, and organizational structure, for businesses to stay compliant in Vietnam.

The tax year in Vietnam is determined according to the calendar year, and a Vietnamese-based auditing company must conduct the audit. The financial reports should then be submitted to the local tax authority, Ministry of Finance, and the statistics office 90 days before the end of the fiscal year.

Investors should be aware that the audit and compliance requirements are different for foreign-owned enterprises (FOE) and representative offices (RO).

Investors should also seek the advice of registered local advisors to ensure that all aspects of reporting are in compliance with prevailing local laws and regulations.

Fiscal periods

FOEs can choose from four fiscal periods with the 12-month period beginning on the first day of each quarter:

  • January 1 – December 31;
  • April 1 – March 31;
  • July 1 – June 30; or
  • October 1 – September 30.

Accounting standards

In addition to the Accounting Law, local and international companies are obligated to adhere to the Vietnamese Accounting Standards (VAS), which has been developed by the Ministry of Finance, when documenting financial transactions. The VAS provides guidelines for bookkeeping, financial reporting, and financial statement preparations.

There are industry-specific accounting guidelines for businesses engaging in insurance, securities, as well as funds management.

The government aims to replace VAS and adopt the International Financial Reporting Standards (IFRS) by 2025. The IFRS is a set of global accounting standards that apply to all financial reporting, quality control, and auditing standards relating to all profit-oriented entities.

Annual compliance for foreign-owned companies

FOEs are obligated to provide an annual audit report and the finalization of corporate and personal income taxation. The statutory audit requirements are as follows:

  • Statement of income;
  • Statement of financial position (profit and loss);
  • Statement of changes in equity, if any; and
  • Balance sheets.

Within 90 days after the end of the fiscal year, FOEs need to submit the audited reports to three government agencies:

  • Provincial Department of Planning and Investment (DPI) or the Provincial Level Export Processing and Industrial Zone Department in the case of FOEs based in industrial zones (IZs) or export processing zones (EPZs);
  • Provincial-level tax departments; and
  • Provincial-level statistical offices.

Annual compliance for representative offices

Representative offices (ROs) are one of the simplest and fastest ways to establish a legal entity in Vietnam. Their reporting requirements are also more simplified compared to FOEs.

ROs are forbidden from directly conducting profit-generating activities and are limited to market research, developing trade contacts, and gather information on regulations and laws.

Annual reports

The annual reports of ROs must include:

  • Basic information – contact information such as office address, telephone numbers, primary bank contacts. Investors should note that the address should match to that written in the RO license;
  • Human resource report – ROs must document their policies with regards to salaries, bonuses, insurance, and other benefits. The personal information and position of every employee should also be included; and
  • Activities report – ROs must document their activities for the preceding year which includes information such as market research activities, advertising activities, participation in trade fairs, and the promotion of service agreements, among others.

Penalties for non-compliance

Under the government’s new Penal Code, which was issued in 2018, businesses that fail to adhere to the compliance laws can now be held criminally responsible.

If the tax authorities find discrepancies in the financial reports, after an audit, a 20 percent tax will be imposed on the amount that is under-declared. There is also a 0.03 percent daily interest rate for the late payment of tax.


About Us

Vietnam Briefing is produced by Dezan Shira & Associates. The firm assists foreign investors throughout Asia from offices across the world, including in Hanoi and Ho Chi Minh City. Readers may write to vietnam@dezshira.com for more support on doing business in Vietnam.

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