Foreign-invested audit firms setting up in Vietnam: how?

Independent audit is a distinctively conditioned service sector in Vietnam: the market is open to foreign capital under integration commitments, yet every audit company, domestic or foreign-owned, must be organised in the exact forms and conditions of the Law on Independent Audit. A foreign investor setting up an audit firm in Vietnam must therefore design the corporate question and the practising auditor question at the same time.

The mandatory legal form: a limited liability company

Law on Independent Audit 67/2011/QH12 provides that audit enterprises are established as limited liability companies with two or more members, partnerships or private enterprises, where the partnership and private enterprise forms are tied to domestic practising auditors. For a foreign investor the feasible form is a foreign-invested limited liability company, registering the audit business line and obtaining from the Ministry of Finance a certificate of eligibility for providing audit services once statutory conditions are met.

The eligibility certificate is the enterprise’s real practice licence; the enterprise registration certificate alone does not entitle the company to sign audit engagements. The audit enterprise must maintain the conditions throughout its operation, and the Ministry of Finance inspects periodically, suspending or revoking the certificate when conditions cease to be met, among which the number of practising auditors is the condition most often lost through staff movement.

Capital and practising auditor conditions

Under Decree 17/2012/ND-CP guiding the Law on Independent Audit, a limited liability audit company must have minimum charter capital of five billion dong, and the audit enterprise’s legal representative, director or general director must be a practising auditor. The audit enterprise must have at least the prescribed number of practising auditors, holding audit practice registration certificates and working full-time at the enterprise.

For foreign auditors, holders of overseas auditor certificates may be recognised and granted eligibility to practise in Vietnam when they meet conditions including an examination on relevant Vietnamese law and related requirements under Ministry of Finance rules. This is the decisive link for a foreign-invested audit company: without a practising auditor team meeting the minimum headcount, the company, however well capitalised, cannot obtain or will lose its service eligibility certificate.

Scope of operation and compliance duties

A foreign-invested audit company in Vietnam provides audit and permitted assurance and advisory services like any other audit enterprise, with no client list distinction based on the capital element. Audit enterprises must buy professional liability insurance or set up a professional risk reserve fund, run service quality control and submit to quality inspection by the Ministry of Finance and the professional body.

A strategic note is professional independence: an audit company may not provide the same client with services conflicting with audit independence under standards and rules, and practising auditors must observe the professional code of ethics. International audit networks entering Vietnam typically separate the Vietnamese audit legal entity clearly from tax and deal advisory entities in the same network to govern this conflict.

Frequently Asked Questions

What business conditions apply to setting up a foreign-invested audit company?

The Law on Independent Audit does not reserve the audit company form for domestic capital, and a foreign investor may hold the charter capital of a limited liability audit company, with the feasible form being the foreign-invested limited liability company since the partnership and private enterprise audit forms are tied to domestic practising auditors. The binding conditions are not the ownership ratio but the eligibility certificate and the practising auditor team the company must maintain.

What is the minimum capital?

Under Decree 17/2012/ND-CP guiding the Law on Independent Audit, the minimum charter capital of a limited liability audit company is five billion dong. Capital must be contributed in full on the registered schedule and maintained during operation; falling below the minimum or failing other conditions is grounds for the Ministry of Finance to suspend or revoke the certificate of eligibility for providing audit services.

What certificates must auditors hold?

A practising auditor in Vietnam must hold an audit practice registration certificate issued by the Ministry of Finance, built on an auditor’s certificate. A foreign auditor holding a practice certificate overseas may be recognised for a Vietnamese practice registration certificate when meeting practice conditions and an examination on relevant Vietnamese law under Ministry of Finance rules. An auditor signs audit reports only when practice registration is attached to a qualified audit enterprise and the auditor works full-time there.

Where is the licence obtained?

The certificate of eligibility for providing audit services is issued by the Ministry of Finance, after the enterprise completes enterprise registration in the limited liability form. The Ministry of Finance is also the authority inspecting condition maintenance and service quality and suspending or revoking the certificate. The application dossier is filed with the Ministry of Finance under the sequence of Law on Independent Audit 67/2011/QH12 and Decree 17/2012/ND-CP.

Bottom line for investors into audit services

Setting up a foreign-invested audit company in Vietnam is a two-layer problem: a limited liability entity with standard charter capital, and a practising auditor team of the minimum size maintained continuously. The second layer is the real bottleneck, and it should be built before the establishment file is even submitted.