Foreign Direct Investment (FDI) companies operating in Vietnam must navigate a complex landscape of financial reporting requirements. This comprehensive guide outlines the essential reporting obligations, deadlines, and compliance requirements for FDI enterprises in 2025.

1. Legal Framework for FDI Financial Reporting

FDI companies in Vietnam are governed by several key regulations:

• Law on Accounting No. 88/2015/QH13
• Independent Audit Law No. 67/2011/QH12
• Circular 200/2014/TT-BTC on Vietnamese Accounting Standards (VAS)
• Enterprise Law 2020
• Investment Law 2020

2. Required Financial Reports

FDI companies must prepare and submit the following financial reports: (Article 100 of Circular 200/2014/TT-BTC)

2.1 Quarterly Reports:

• Balance sheet: Reflects the enterprise’s assets, liabilities, and equity at the reporting date.
• Income statement: Presents revenue, expenses, and financial results for the reporting period.
• Cash flow statement: Shows cash flows during the reporting period.
• Explanatory notes to financial statements: Provides necessary explanations and supplementary information.

2.2 Annual Reports:

• Balance Sheet: Reflects assets, liabilities, and equity at the end of the financial year.
• Income Statement: Presents revenue, expenses, and financial results for the financial year.
• Cash Flow Statement: Shows cash flows throughout the financial year.
• Notes to Financial Statements: Provides explanations and supplementary information.

According to Article 109 of Circular 200/2014/TT-BTC, foreign-invested enterprises are not required to prepare and submit quarterly financial statements. However, they must prepare and submit audited annual financial statements conducted by an independent auditing firm.

3. Annual Financial Statement Requirements

• Submission Locations (Article 110 of Circular 200/2014/TT-BTC): Annual financial statements must be submitted to financial authorities, tax authorities, statistical offices, parent companies, and business registration agencies.

Special Cases: If an FDI enterprise is located in an export processing zone, industrial park, or high-tech park, it must also submit its annual financial statements to the zone management board if required.

• Submission Deadline (Clause 2, Article 109 of Circular 200/2014/TT-BTC): The annual financial statement must be submitted no later than 90 days from the end of the financial year.

4. Auditing Requirements

FDI enterprises must conduct audits as per Article 37 of the Independent Audit Law and Clause 1(a), Article 15 of Decree 17/2012/ND-CP.

Audit Process:

1. Audit Planning (Article 31 of the Independent Audit Law):
   • The auditor assesses initial risks and determines the scope, objectives, and audit methods suitable for the enterprise’s operations.
2. Audit Execution:
   • Collecting audit evidence through examination and verification of financial data and related information.
   • Assessing the accuracy, completeness, and reasonableness of financial data and accounting records.
3. Evaluation and Evidence Compilation:
   • Analyzing, comparing, and verifying findings to reach audit conclusions.
4. Audit Report Preparation (Article 32 of the Independent Audit Law):
   • The auditor drafts an independent audit report, providing complete information, conclusions, and recommendations (if any) related to the enterprise’s financial status.
   • The report must ensure objectivity, transparency, and compliance with current audit standards.

5. Digital Reporting Requirements

In 2025, Vietnam has enhanced its digital reporting requirements: (Circular No. 200/2014/TT-BTC; Circular No. 68/2019/TT-BTC)

1. Submission of financial reports through the electronic reporting system:

• Enterprises must use the electronic reporting system provided by competent authorities (typically the Ministry of Finance or related tax and statistical agencies) to submit financial reports.
• Submitting reports via the electronic system allows regulatory bodies to receive, process, and store financial information quickly while facilitating periodic monitoring and inspection.

2. Use of digital signatures and electronic authentication methods:

• To ensure the security and authenticity of reported information, enterprises must use digital signatures and electronic authentication technologies as mandated by the Ministry of Finance.
• This requirement guarantees that the submitted information remains accurate and unaltered after signing while also identifying the responsible party for the report’s content.

3. Electronic storage and management of financial records:

• Enterprises must store and manage all financial records in electronic format according to established standards.
• This measure ensures that information is securely protected, easily accessible for inspection and supervision, and supports state management in accounting and taxation.

4. Use of electronic invoicing systems:

• Ensuring authenticity, security, and transparency: Electronic invoices are issued with digital signatures and comply with security standards, preventing fraud and ensuring accurate transaction information.
• Automating processes and improving management efficiency: The electronic invoicing system automates issuance, storage, and retrieval, reducing administrative costs and enhancing tax monitoring effectiveness.

6. Common Compliance Challenges

FDI companies often face these challenges:

• Differences between VAS and international standards: VAS has significant differences compared to international standards such as IFRS or US GAAP, particularly in recognition, measurement, and presentation of financial items. This requires FDI enterprises to adjust their accounting systems and make necessary modifications to ensure consistency and reliability when comparing financial reports across domestic regulations and international standards.
• Language barrier in documentation: Most legal documents, reports, and guidelines related to accounting and taxation are in Vietnamese, posing challenges for FDI enterprises with international teams. This language barrier can lead to misunderstandings or misapplications of regulations, requiring businesses to invest in professional translation services or legal consultancy to ensure accurate documentation.
• Complex regulatory changes: Vietnam’s tax, accounting, and financial reporting laws are frequently updated, making it difficult for businesses to track and apply new regulations correctly. FDI enterprises need a system for timely updates or collaboration with legal experts to ensure compliance with legal requirements.
• Technical requirements for digital submission: Implementing electronic financial reporting systems requires FDI enterprises to invest in modern IT infrastructure, integrate security solutions, and use digital signatures per Ministry of Finance standards. This not only ensures timely and accurate report submissions but also necessitates staff training and internal process adjustments to meet stringent technical requirements.
• Limited specialized human resources: FDI enterprises often struggle to recruit and retain experts with in-depth knowledge of Vietnamese accounting, taxation, and legal frameworks. This shortage of qualified personnel affects compliance capabilities and financial reporting quality.
• High compliance costs: Adapting to continuously changing regulations and integrating digital reporting technology requires significant investment in IT infrastructure and staff training. This creates financial pressure and demands tight management to ensure operational efficiency and legal compliance.

7. Best Practices for Compliance

To ensure smooth compliance:

• Maintain regular communication with regulatory authorities: Establishing open and frequent communication channels with regulatory bodies helps businesses receive timely updates on regulations, clarify concerns, and obtain specific guidance, reducing the risk of violations.
• Implement robust accounting software systems: Modern accounting software automates processes, minimizes errors, enhances accuracy, and ensures secure data storage and processing in compliance with current standards.
• Engage qualified accounting professionals: A team of seasoned accountants is crucial for correctly interpreting and applying accounting, tax, and legal regulations, especially in the context of frequent regulatory changes.
• Keep updated with regulatory changes: Businesses must actively monitor and keep up with changes in legal frameworks. This allows timely adjustments to internal policies and workflows, preventing unintentional violations.

8. Penalties for Non-Compliance

Non-compliance can result in:

• Failure to audit annual financial statements: Enterprises may face administrative fines ranging from VND 40,000,000 to VND 50,000,000 (Clause 3, Article 53 of Decree 41/2018/ND-CP).
• Late submission of financial reports to relevant authorities: Enterprises may be fined between VND 5,000,000 and VND 20,000,000 (Clause 1(a) and Clause 2(c), Article 12 of Decree 41/2018/ND-CP).
• Failure to submit financial reports: Enterprises may be fined between VND 40,000,000 and VND 50,000,000 (Clause 4(a), Article 12 of Decree 41/2018/ND-CP).

For more information on the penalty process for FDI capital contribution activities, please refer to the article: Foreign Direct Investment (FDI) Capital Contribution Violation Handling Process: Detail Guidelines 

9. Conclusion

Maintaining compliance with Vietnam’s financial reporting requirements is crucial for FDI companies. Stay informed about regulatory updates and consider seeking professional assistance to ensure full compliance with all reporting obligations.

Need professional assistance with your FDI financial reporting? Contact our expert team, HMLF, for comprehensive support in meeting all your reporting obligations in Vietnam.

For detailed advice, please contact Harley Miller Law Firm.

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