Accounting services for FDIs is the process of recording, processing and reporting the financial activities of an enterprise that has foreign direct investment.
In order to absorb advanced technology, learn modern management methods, join the global supply chain network, improve labor skills, and increase budget revenue, Vietnam has been very active in attracting FDI in recent years.
What is an FDI enterprise?
According to the Investment Law, a FDI enterprise is an enterprise whose capital contributing members or capital contributors are foreign investors.
FDI enterprises are required to adhere to several regulations regarding annual reporting, which include: submitting investment reports, submitting monitoring reports, submitting foreign loan reports, and having their annual financial reports audited by an independent auditing company before submission to the competent authorities.
What are the accounting services for FDI enterprises?
Accounting consulting services are the practicing accountants providing consulting services on setting up an accounting system, reviewing financial records, reviewing tax records, legal documents, and other related matters. Other contents of accounting work as prescribed by the Law on Accounting for organizations and individuals that have demand.
Due to the specific nature of state management for FDI enterprises, accounting tasks need to be conducted systematically and in strict compliance with the law from the outset. This ensures that the enterprises can take advantage of tax incentives and smoothly carry out procedures for repatriating profits abroad on an annual basis.
The content of Vinasc's accounting services for FDI enterprises
The accounting process for FDI enterprises can be similar to that of domestic businesses; however, specific requirements and regulations related to direct investment from foreign countries must be adhered to. Below are some important factors in FDI enterprise accounting services.
Compliance with legal regulations
FDI enterprises must compy with regulations and entitlements related to foreign direct investment in Vietnam. This encompasses meeting requirements for financial reporting, taxation, customs, investment, and banking as stipulated by the relevant authorities.
Preparing financial reports
Foreign Direct Investment (FDI) enterprises need to prepare comprehensive and accurate financial reports according to Vietnamese accounting standards or international accounting standards (such as IFRS – International Financial Reporting Standards). Financial reports include the balance sheet, income statement, cash flow statement, and accompanying notes.
Foreign exchange handling and exchange rates
FDI enterprises often occur in transactions using various types of different currencies. Accounting must handle currency conversion, calculate exchange rates, and appropriately record exchange rate differences in accordance with regulations in the financial reports.
Risk management and taxation
The accounting services for FDI enterprises ensure that legal and tax-related risks associated with their operations are carefully examined and effectively managed. This encompasses adhering to tax regulations, tax incentives, and other tax commitments as stipulated in the investment agreements. FDI enterprises often benefit from tax incentive policies when investing in Vietnam. However, the accountant is necessary to precisely determine the period of entitlement to incentives and the preferential tax rates based on specific criteria.
Information security
Multinational corporations often possess critical information related to technology, assets, and business processes. Accounting services for FDI enterprises need to ensure information security and adhere to data protection regulations.
Specific tasks arising in FDI enterprise accounting services include:
- Designated Chief Accountant
- Preparing and submitting investment reports
- Preparing and submitting supervision reports
Registering for medium and long-term loans with state bank
- Reporting on foreign loans with state-owned banks
- Annual procedure for repatriating profits abroad
- Auditing year-end financial statements
- Preparing appendix for related-party transactions
- Preparing documentation for related-party transactions
Legal regulations related to accounting compliance
Location for submitting year-end financial reports
FDI enterprises are required to submit annually audited financial reports to various state agencies including finance, tax, statistics, business registration authorities, and industrial park management boards.
Deadline for submitting financial reports
The deadline for submitting annual financial statements is no later than 90 days from the end of the accounting year.
The penalty level for violations related to the submission of financial reports.
Fines ranging from 5,000,000 VND to 10,000,000 VND for submitting financial statements late by less than 3 months.
Fines ranging from 10,000,000 VND to 20,000,000 VND for submitting financial statements late by more than 3 months or submitting unaudited financial statements.
- Fines ranging from 20,000,000 VND to 30,000,000 VND for providing false information on financial statements or if the financial statements have inconsistent figures within the accounting period.
Fines ranging from 40,000,000 VND to 50,000,000 VND for not submitting financial statements to the competent state authority.
Strengths of FDI enterprise accounting services at Vinasc
Utilizing accounting advisory services assists businesses in achieving legal compliance goals, conducting comprehensive and in-depth financial reporting audits, as well as advising on the risk of internal control systems related to financial reporting and tax declaration.
Vinasc’s professional accounting advisory experts will support your internal accounting team by providing practical, in-depth consulting experience to address issues that arise within the business. Simultaneously, we aim to optimize the quality of your accounting department.
Vinasc’s dedicated team of experts, with diverse practical experience, is segmented into specialized fields and languages to provide the best possible support for each specific FDI enterprise.
Vinasc cultivates a culture that values service quality and professional ethics, extending from the highest management level to all staff, aiming for customer assured and satisfaction.
Contact
If your business has a need for FDI enterprise accounting services, please contact Vinasc using the information provided below. We will gather the necessary details and send a comprehensive quotation for your consideration.