Set up a company in Vietnam providing auditing services

Auditing service is a conditional business line, foreign investors who want to invest in setting up an audit service company in Vietnam must meet the conditions of the law and carry out enterprise registration procedures at a competent state agency. In order for customers to better understand the process of setting up a foreign-invested auditing company in Vietnam, Viet An Law would like to give legal advice as follows.

Legal basis

• WTO, AFAS, CPTPP
• Law on Investment 2020;
• Law on Enterprise 2020;
• Law on Independent Audit 2011;
• Decree 17/2012/NDCP, amended and supplemented by Decree 151/2018/ND-CP guiding the Law on Independent Audit;
• Circular 203/2012/TT-BTC stipulating the order and procedures for granting, managing and using the Certificate of eligibility for business in auditing services (amended and supplemented by Circular 39/2020/TT-BTC and Circular 43/2023/TT-BTC).

Investment conditions to set up a company in Vietnam providing auditing services

Investment formation

According WTO, AFAS

• Accounting and auditing and bookkeeping services (CPC 862): Non restriction.

According CPTPP

• Auditing services (CPC 862): Foreign service providers are allowed to provide services when meeting the requirements for presence in the host country in Vietnam. It is not allowed to provide audit services (including cross-border form) unless the above requirements are met.

Minimum capital conditions

• The legal capital for a limited liability auditing company (LLC), a branch of a foreign audit firm in Vietnam is 5 (five) billion Vietnamese dong.
• Enterprises wishing to establish an audit branch in Vietnam must have at least USD 500,000 in equity on the balance sheet at the end of the latest fiscal year.
• During its operation, a limited liability company or a foreign auditing firm must maintain its equity on the balance sheet6 not less than the minimum capital level.

Ownership rate

• An organization member may contribute up to 35% of the charter capital of an audit limited liability company with two or more members.
• In case there are many capital-contributing organizations, the total capital contribution of these organizations shall not exceed 35% of the charter capital of the audited limited liability company with two or more members.
• An auditing limited liability company must have at least 02 (two) capital-contributing members who are auditors registered to practice at the company. The contributed capital of practicing auditors must account for more than 50% of the charter capital of the company.

Personnel conditions

• Auditing limited liability companies must have at least 02 (two) capital-contributing members who are auditors registered to practice at the company. The contributed capital of practicing auditors must account for more than 50% of the charter capital of the company.
• A practicing auditor must not concurrently be a capital contributing member of two or more auditing firms.

Scope of operation

• Auditing services, including: audit of financial statements, audit of operations, audit of compliance, audit of finalization reports of completed projects, audit of financial statements for tax purposes and audit work other.
• Financial statement review, financial information and other assurance services.
• Other services: Economic, financial and tax consulting; Consulting on management, transformation and restructuring of enterprises; Consulting on information technology application in the management of enterprises and organizations; Accounting services in accordance with the law on accounting; Valuation of assets and assessment of business risks; Services of fostering financial knowledge, accounting and auditing; Other related services on finance, accounting, tax in accordance with the law.

To set up a company in Vietnam providing auditing services, foreign investors have two choices:

• Establishment of a foreign-invested audit service company;
• Contributing capital, buying shares or capital contributions to economic organizations providing audit services.

Option 1: Establishing a foreign-invested auditing service business:

Step 1: The investor applies for an Investment Registration Certificate

Dossiers include:

• A written request for implementation of an investment project, including a commitment to bear all costs and risks if the project is not approved;
• Documents on investor’s legal status: copy of identity card or identity card or passport (if individual); a copy of the certificate of incorporation or equivalent document and the passport of the capital manager (if an organization);
• The investment project proposal includes the following contents: investor implementing the project, objectives, scale and investment capital, capital mobilization plan, location, duration, investment schedule, labor demand activities, proposals for investment incentives, assessment of the project’s socio-economic impacts and efficiency;

If the construction law stipulates the preparation of a pre-feasibility study report, the investor may submit a pre-feasibility study report instead of the investment project proposal.

• Documents proving the financial capacity of the investor include at least one of the following documents: financial statements of the last 2 years of the investor; commitment to financial support of the parent company; financial institution’s commitment to financial support; guarantee on the financial capacity of the investor; other documents proving the investor’s financial capacity;
• In case the investment project does not request the State to allocate or lease land or permit the change of land use purpose, a copy of the paper on land use rights or other documents determining the right to use the site shall be submitted for implementation. current investment project;
• The explanation of the technology used in the investment project, for the project subject to appraisal and consultation on technology in accordance with the law on technology transfer;
• BCC contract for investment projects in the form of BCC contract;
• Other documents related to the investment project, requirements on conditions and capacity of the investor as prescribed by law (if any);
• Power of Attorney for Law Viet An.

Place of application:  Department of Planning and Investment where the head office is expected to be located.

Processing order:  Within 15 days from the date of receiving the complete and valid dossier, the Department of Planning and Investment will issue the Investment Registration Certificate to the foreign investor. In case of refusal, the Department of Planning and Investment will reply in writing and clearly state the reason.

Step 2: Establishment of a foreign-invested audit service company in Vietnam

Apply for a Enterprise Registration Certificate:

Business establishment dossier includes:

• Application for business registration;
• Company charter;
• List of founding shareholders and shareholders being foreign investors (if it is a joint stock company); List of members (if it is a two-member limited liability company);
• Certified copy of identity card or citizen identification card or passport (if an individual); establishment decision, business registration certificate or equivalent document and citizen identification card or ID card or passport with written authorization for capital manager in Vietnam (if an organization) ;
• A certified copy of the issued Investment Registration Certificate;
• Power of attorney for Viet An Law;

Place of application:  Department of Planning and Investment where the enterprise’s head office is located.

Duration:  03 – 06 working days.

Disclosure of business registration information:

• After being granted an enterprise registration certificate, an enterprise must make a public announcement on the National Business Registration Portal and pay fees as prescribed by law. The content to be announced includes the contents of the Business Registration Certificate and the following information:
  • Business lines;
  • List of founding shareholders; list of shareholders being foreign investors in the case of a joint-stock company (if any).
• Publication fee: The request for announcement of enterprise registration contents and payment of the fee for announcement of enterprise registration contents shall be made at the time the enterprise submits the enterprise registration dossier. In case the enterprise is not granted business registration, the enterprise will be refunded the fee for announcing the business registration content.

The publication fee is 100,000 VND according to the provisions of Circular 47/2019/TT-BCT.

Company seal

• A seal includes a seal made at a seal engraving establishment or a seal in the form of a digital signature in accordance with the law on electronic transactions.
• The enterprise shall decide on the type, quantity, form and content of the seal of the enterprise, its branches, representative offices and other units.
• The management and keeping of the seal shall comply with the provisions of the company’s charter or regulations issued by the enterprise, branch, representative office or other unit of the enterprise with the seal. Enterprises use seals in transactions as prescribed by law.

Option 2: Contributing capital, buying shares and contributed capital to an economic organization providing audit services

This method will help investors save more time and costs because they do not have to apply for an Investment Registration Certificate. However, investors must ensure the proportion of capital contribution of foreign investors in accordance with regulations. If choosing this method, investors only need to carry out the procedures for registration of capital contribution, purchase shares, stakes at the Department of Planning and Investment. In addition, for activities that foreign investors are not allowed to carry out, it is necessary to consider and implement procedures to reduce industries.

Step 1: Foreign investors register to contribute capital, purchase shares, stakes to economic organizations

Dossiers include:

• A written registration for capital contribution, share purchase, or stake purchase includes the following contents: information on business registration of the economic organization to which the foreign investor intends to contribute capital, purchase shares, or stake shares. contribution; business; list of owners, members, founding shareholders, list of owners, members, shareholders being foreign investors (if any); rate of ownership of charter capital of foreign investors before and after capital contribution, share purchase, purchase of capital contribution to economic organizations; expected transaction value of the contract of capital contribution, share purchase, purchase of contributed capital; information on investment projects of economic organizations (if any);
• Copies of legal papers of individuals and organizations contributing capital, purchase shares, stakes and economic organizations with foreign investors contributing capital, purchase shares, stakes: Passport (if applicable) is an individual); Business license or equivalent document and Passport of the person authorized to manage the capital portion in Vietnam (if an organization);
• Written agreement in principle on capital contribution, purchase shares, stakes between foreign investors and economic organizations in which foreign investors contribute capital, purchase shares, stakes or between investors foreign investment with shareholders or members of that economic organization;
• A copy of the certificate of land use rights of an economic organization in which foreign investors contribute capital, purchase shares, stakes, if such economic organization has a certificate of land use right in the island, commune, border wards and towns and coastal communes, wards and towns; Other areas affecting national defense and security, except for economic organizations implementing investment projects in industrial parks, export processing zones, hi-tech parks and economic zones established under the Government’s regulations. .
• Power of Attorney for Viet An Law.

Place of application : Department of Planning and Investment where the economic organization’s head office is located.

Order and procedures:  If the foreign investor’s capital contribution, share purchase or capital contribution meets the conditions on ownership ratio and investment form in accordance with the Schedule of Commitments and Vietnamese law, Within 15 days from the date of receipt of complete dossiers, the Department of Planning and Investment will notify in writing. In case the application does not meet the conditions, the Department of Planning and Investment will notify in writing and clearly state the reason.

Step 2: Carry out  procedures for transferring shares, contributed capital and changing shareholders, members , and owners .

Procedures for registration for issuance of Certificate of eligibility for audit service business

Registration documents include:

• An application form for the Certificate of eligibility for business in auditing services, made according to the prescribed form;
• A copy of the Enterprise Registration Certificate or the Business Registration Certificate or the Investment Certificate;
• List of practicing auditors with full-time employment contracts at the enterprise;
• Copies of the audit practice registration certificates of the practicing auditors.
• A copy of the decision of the Members’ Council on appointment of the title of Director (General Director) for limited liability companies or partnerships.
• Copy of the company’s charter.
• List of organizations and individuals contributing capital, list of general partners, which must clearly show the following contents:
  • Full name, nationality; Number and date of issue, place of issue of people’s identity card or passport or other lawful personal identification for individuals; Number and date of issue of the Certificate of Auditing Practice Registration (for individuals who are practicing auditors).
  • Name, head office address, number and date of establishment decision (or business registration) for the organization; Full name, nationality, number and date of issue, place of issue of the people’s identity card, or passport or other lawful personal identification; Number and date of issuance of the Certificate of registration of auditing practice to the individual appointed as the representative of the contributed capital portion of the organization.
  • Amount of capital contributed as registered, value of capital actually contributed, percentage of ownership, term of capital contribution.
• A written confirmation of capital for a limited company, specifically as follows:

Newly established enterprises must have:

• • Minutes of capital contribution of founding members.
  • In case the capital is contributed in cash, there must be a written certification from the commercial bank licensed to operate in Vietnam about the deposit amount of the founding members. The minimum deposit must be equal to the capital contributed in money by the founding members and will only be disbursed after the enterprise is granted the Certificate of eligibility for business in auditing services.
  • In case the capital contribution is in the form of assets, there must be a certificate of the organization with the function of price appraisal operating in Vietnam about the results of the appraisal of the value of the assets included in the capital contribution. The certificate must be valid until the date of submitting the application file for the Certificate of eligibility for business in auditing services.

For an operating enterprise, there must be a written certification of another independent auditing firm that the current level of capital owned by that enterprise is dossiered in the enterprise’s financial statements at the latest time (year). registration or the year preceding the year of registration).

Service to set up a company in Vietnam providing auditing services of Viet An law firm

• Consulting on the conditions for establishing a foreign-invested company: capital contribution ratio of foreign investors in Vietnam; conditions for business lines; project implementation location; pay attention to the procedures before and after the establishment of a foreign-invested company;
• Consulting to choose the right type of company for investors: Limited Company or Joint Stock Company;
• Advice on opening a capital transfer account, capital contribution term;
• Consulting and guiding investors to prepare necessary documents to establish a foreign-invested company;
• Consulting, drafting company establishment documents for investors;
• Representing investors to work with competent Vietnamese state agencies in the process of carrying out the procedures for establishing a company for investors (Apply for Investment Registration Certificate, Investment Registration Certificate, etc.) enterprises, Business Licenses, Licenses according to specialized requirements, making seals of legal entities, procedures after company establishment,…;
• Comprehensive, regular advice, accounting services, tax law package of activities arising in the process of doing business in Vietnam for investors.