Set up a company in Vietnam for accounting services

Currently, the demand for accounting services is increasing, leading to the establishment of more and more accounting service companies, including foreign-invested companies. outside. However, accounting services according to Vietnamese law are a conditional business. What conditions must be met to set up a company in Vietnam for accounting services? Viet An Law Firm would like to summarize and send to clients some related regulations as follows.

General overview of accounting

What is accounting?

Accounting is the collection, processing, checking, analyzing and providing economic and financial information in the form of values, artifacts and labor time.

What are the duties of accounting?

According to Article 4 of the Law on Accounting 2015, it is clearly stated that the tasks that accountants need to perform include:

• Collect and process accounting information and data according to the subject and content of accounting work, according to accounting standards and accounting regimes;
• Inspect and monitor financial revenues and expenditures, collection and payment obligations, and debt payments; inspect the management and use of assets and sources of asset formation; detect and prevent violations of financial and accounting laws;
• Analyze accounting information and data; Advise and propose solutions to serve the management requirements and economic and financial decisions of the accounting unit;
• Provide accounting information and data according to the provisions of law

Thus, the accountant’s tasks are closely related to the company’s cash flow and assets. An accountant’s work is related to the circulation of cash flow in a business. The accountant will record, monitor, and reflect the movement of capital flows, assets, revenue, and profits of the company.

Market access conditions for foreign investors

Vietnam has committed in the Schedule of Specific Commitments on Services in the WTO with codes CPC 862 (accounting, auditing, and bookkeeping services). Specifically:

Vietnam commits to allowing the establishment of accounting, auditing, and bookkeeping businesses with 100% foreign capital or joint ventures (i.e. without limiting the capital participation rate of foreign investors in joint ventures) immediately. from the time of joining the WTO. Thus, basically, foreign investors’ investment and participation in the accounting, auditing, and tax consulting market in Vietnam is unlimited. Therefore, currently, foreign investors are equal in terms of market access with domestic Vietnamese investors.

According to the Investment Law 2020, tax procedure service is a conditional business line, so it must meet the conditions prescribed by Vietnamese law.

Conditions to set up a company in Vietnam for accounting services

Conditions for types of businesses allowed to be established

According to Clause 1, Article 59 of the Law on Accounting 2015, amended and supplemented in 2019, accounting service enterprises are established in the following types:

• Limited liability company with two or more members
• Partnerships
• Sole proprietorship

Thus, accounting service companies are not allowed to establish enterprises in the form of joint-stock companies.

Membership Requirements

Accounting service business means the provision of accounting services, chief accountants, financial statements, accounting consultancy, and other tasks in the context of accounting work for organizations and individuals in need. The law stipulates the conditions for membership of accounting service companies in Article 60 of the Accounting Law as follows:

• There must be at least two capital-contributing members/partnerships who are practicing accountants
• The legal representative, director/general director, must be a practicing accountant. For a sole proprietorship, the owner of a private enterprise is a practicing accountant and a director at the same time.
• The proportion of contributed capital of members of a limited liability company with two or more members: for organizations that can contribute up to 35% of charter capital, practicing accountants must account for more than 50% of the company’s charter capital.

Conditions for business lines

Enterprises register their accounting professionals in accordance with the law. The business line for accounting services is business line 6920: Activities related to accounting, auditing, and tax consultancy.

For foreign enterprises

According to Clause 4, Article 59 of the Law on Accounting 2015, amended and supplemented in 2019, foreign accounting service enterprises shall provide accounting services in Vietnam in the following forms:

Conditions on charter capital and capital contribution ratio

• The law does not require a minimum or maximum charter capital, so businesses can choose a charter capital level appropriate to their financial capacity to ensure they can contribute the full amount of registered charter capital within 90 days from the date of issuance of business registration.
• Particularly for multiple-member limited liability companies, the capital contribution ratio is specified in Article 26 and Article 27 of Decree 174/2016/ND-CP as follows:
• The capital contribution ratio of organizational members can only account for a maximum total of 35% of the charter capital of the accounting service company. In case there are many organizations contributing capital, the maximum total capital contribution ratio of the organizations is equal to 35% of the charter capital of the accounting service multiple-member limited liability company;
• The capital contribution ratio of members who are practicing accountants at the accounting service company must account for over 50% of the company’s charter capital.

Personnel conditions and practice certificates

• A company providing accounting services must ensure that at least two capital contributing members are practicing accountants;
• The legal representative, director, or general director of the limited liability company must be a practicing accountant;

Note: For multiple-member limited liability companies, practicing accountants are not allowed to simultaneously register to provide accounting services at two or more accounting service business units.

Accounting service businesses and accounting service households are not allowed to provide accounting services to other accounting units when the person responsible for managing and operating the accounting service business is not allowed to provide accounting services to other accounting units. Representative of accounting service business household or person directly performing accounting services of an enterprise or accounting service business household in the following cases:

• Is the biological father, biological mother, adoptive father, adoptive mother, wife, husband, biological child, adopted child, or sibling of the person responsible for the management, administration, or chief accountant of the accounting unit, except In cases where the accounting unit is a private enterprise, a limited liability company owned by an individual, other types of enterprises without state capital are micro-enterprises according to the provisions of the law on supporting small and medium enterprises.
• Have economic and financial relationships with that accounting unit;
• Insufficient professional capacity or eligibility to perform accounting services;
• Providing services as chief accountant to customers who are organizations that have economic and financial relationships with that accounting unit;
• The accounting unit requests work that does not comply with professional ethical standards or does not meet professional and financial requirements;
• Other cases according to the provisions of Professional Ethical Standards of Accounting and Auditing and provisions of law.

Conditions for appropriate business registration

• People who establish an accounting service business can refer to the registration industry code 692 – 6920 – 69200: Activities related to accounting, auditing, and tax consulting;
• In addition, depending on other business activities, businesses can register for other industry codes. Vietnamese law does not stipulate a limit on the number of registered occupational codes.

Procedures to set up a company in Vietnam for accounting services

Step 1: Prepare and submit the business establishment dossier

The owner submits the application to the Department of Planning and Investment where the head office is located. The business establishment dossier includes:

• Application for business registration;
• Company charter;
• Legal documents of individuals and legal entities that are members and legal representatives of the company: Certified copy of identity card or citizen identification card or passport (if an individual); Establishment decision, enterprise registration certificate or equivalent document and citizen identification card or identity card or passport with authorization document for the capital manager in Vietnam (if an organization) ;
• The investment registration certificate has been issued.
• Power of Attorney for Viet An Law (in case of choosing the company’s services).

Processing time: 03 working days. If the application is complete and valid, an enterprise registration certificate will be issued according to regulations. In case of refusal, the business registration agency will clearly state the reason in the written response sent to the tax service enterprise.

Step 2: Publish business information content

After being granted the Enterprise Registration Certificate, an enterprise must make a public announcement on the National Business Registration Portal within 30 days from the date of publication and must pay fees according to the provisions of law.

Step 3: Engrave the business seal

• The seal is made at a seal engraving facility or in the form of digital signatures in accordance with the law on electronic transactions;
• The enterprise decides on the type of seal, quantity, form, and content of the seal of the enterprise, branches, representative offices, and other units of the enterprise;
• The management and storage of seals is carried out in accordance with the company charter or regulations issued by the enterprise, branch, representative office, or other unit of the enterprise with the seal. Enterprises use seals in transactions according to the provisions of law.

Step 4: Request a Certificate of eligibility to provide accounting services

After being granted an enterprise registration certificate to operate accounting services, accounting service companies need to carry out procedures to apply for a certificate of eligibility to provide accounting services according to Articles 61 and 62 of the Law on Accounting 2015.

The owner submits documents to the Ministry of Finance. Dossier to be submitted include:

• Application for issuance of Certificate of eligibility to provide accounting services.
• Copy of Enterprise Registration Certificate, Investment Registration Certificate, or other documents of equivalent value.
• Copy of the Certificate of registration to practice accounting services of practicing accountants.
• Labor contracts with accounting service businesses of practicing accountants.
• Documents proving capital contribution for limited liability companies.
• Company charter for partnerships and limited liability companies.
• Written commitment of the foreign enterprise to take responsibility, documents certifying the foreign enterprise’s license to provide accounting services for the branch of the foreign enterprise providing accounting services in Vietnam.

The time limit for issuing the certificate of eligibility is 15 working days from the date of receipt of complete and valid documents. If the application is rejected, the owner will receive a document clearly stating the reason.

Note, within 06 months from the date of registration for business of accounting services, if the enterprise providing accounting services is not granted a certificate of eligibility to provide accounting services, the enterprise must immediately notify the enterprise registration agency to carry out procedures for deleting the phrase “accounting services” in the name of the enterprise.

If you want to receive advice and learn more information about the conditions for set up a company in Vietnam for accounting services, please contact Viet An Law Firm for the best support!