Accounting firms for FDI in Vietnam

Performing accounting work for FDI companies is not easy. Some businesses still encounter accounting problems in FDI. What does accounting work for FDI companies include? What knowledge is needed to be able to do accounting for FDI companies in the best way? Here are some experiences and provisions that accountants for Accounting firms for FDI in Vietnam must have.

1. What is accounting for FDI companies?

Accounting for FDI companies (Foreign Direct Investment) is the accounting process applied in enterprises with foreign direct investment in a country.

When a foreign company invests in a business in another country, Bookkeeping solutions for foreign investors work will include recording and reporting the business activities of this company according to international accounting principles and standards.

FDI accountants often have to deal with issues related to transfer pricing, exchange rates, taxes and related laws. The work may also include tracking and reporting on transfers between the parent company and its branches/subsidiaries in different countries.

The goal of FDI accounting is to provide accurate and transparent information about the business operations of the FDI company to stakeholders, including governments, shareholders, banks, and investors. FDI accounting information can also be used to evaluate the effectiveness of investments and manage risks in the international business environment.

Bookkeeping and accounting Service For FDI company in Vietnam

2. Features of FDI Enterprise Accounting

Accounting firms for FDI in Vietnam has its own characteristics compared to domestic enterprises, requiring special attention to the following points:

  • Legal Regulations: FDI enterprises must comply with the accounting regulations of both their own country and the investing country, requiring a clear understanding of accounting laws, taxes, and related rules in both countries.
  • Currency: With operations in multiple currencies, FDI enterprises must manage exchange rate risks, including currency translation and reporting in a common currency.
  • Tax Reporting: Tax advisory services for foreign enterprises must comply with the tax laws of both countries, requiring accountants to prepare detailed information for tax reporting for both parties.
  • Transfer Pricing: In FDI enterprises, transfer pricing plays an important role. Accountants must ensure that transactions between units are conducted in accordance with reasonable transfer pricing principles and in compliance with regulations of both countries.
  • Financial Reporting: Financial statements must comply with international accounting standards (IFRS) or domestic accounting standards, depending on the requirements of each country.
  • Auditing: FDI enterprises may be subject to auditing requirements of both countries involved, requiring an understanding of auditing standards and laws of each country.

3. The Importance of Accounting in FDI Enterprises

  • Providing Financial Information: Supporting decision-making, management, strategic adjustment and operations of investors, state agencies and stakeholders through accurate and timely information on business, financial and production activities.
  • Complying with the Law: Helping FDI enterprises comply with Vietnamese laws and international accounting standards, protecting the rights and ensuring transparency, legality and responsibility of FDI enterprises.
  • Handling Complex Accounting Issues: Supporting the handling and resolution of complex accounting issues such as auditing, tax inspection, exchange rates, net added value, and financial reporting according to international accounting standards.
  • Transferring Technology and Knowledge: Contributing to improving the quality of domestic accounting and auditing services, promoting the development of the Vietnamese accounting industry through the transfer of digital technology and specialized knowledge.

4. Accounting work for FDI enterprises

Tax advisory services for foreign enterprises includes collecting documents, processing, recording economic transactions, checking, analyzing and reporting information on finance, business, and taxes of FDI enterprises. Specifically, the work of an accountant in an FDI enterprise includes:

  • Managing revenue and expenditure: Including collecting money from customers, suppliers, shareholders, paying money to suppliers, employees, taxes, banks; reconciling debts; resolving exchange rate issues; establishing reserve funds for exchange rate differences, bad debts, uncollectible debts, and other expenses during operations.
  • Tax reporting: Declare and pay value added tax, corporate income tax, personal income tax, import and export tax; review Vietnam’s tax incentives and free trade agreements to avoid double taxation.
  • Financial reporting: Prepare and submit reports on operating results, cash flows, changes in equity, and financial status as prescribed by the regulatory agency.
  • Apply accounting standards: Use Vietnamese and international accounting standards (such as IFRS) in preparing books and financial reports; translate into the language of foreign investors.
  • Other tasks: Including internal control, inspection, auditing, inspection, liquidation, and dissolution.

Requirements for accounting in an FDI company

5. What are the requirements for accounting in an FDI company?

The requirements of the Vietnam tax and accounting compliance for FDI in general require the following characteristics:

  • Making accounting records always requires absolute accuracy, always being careful and meticulous. Because the information shown on documents and transactions is very important to the company’s financial resources.
  • When working as an accountant, you must be honest and able to withstand work pressure.
  • An indispensable requirement is the ability to calculate well and be sensitive.
  • Proficient in computer skills.

When working as an accountant in an FDI company, an FDI accountant must also need the following factors based on the characteristics of a foreign-invested company:

Because the enterprise is an FDI company, the documents, reports, and transactions must be carried out in accordance with current laws in Vietnam tax and accounting compliance for FDI.

Those documents must be translated from Vietnamese into foreign languages accurately, so the requirement for FDI accountants is to have international specialized certificates.

S4B Vietnam has services to support your business in FDI accounting. If your business still has questions or needs advice on accounting work for FDI companies, please contact S4B hotline + 84 24 3974 4181 or send to service@s4b.com.vn

>>>Read more: Mekong Delta Attracts FDI: New Opportunities

S4B Vietnam

  • Address: Unit 701B – 701C, Tower A, Handi Resco 521 Kim Ma Street, Ba Dinh District, Hanoi, Vietnam.
  • Tel: + 84 24 3974 4181
  • Email: service@s4b.com.vn

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