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Valuation Costs: Who Pays and Where Are They Booked?

6 min readFLAT LAW FIRM
Calculator and financial paperwork on a desk (illustrative)

Scenario: Two founders — a Singapore parent company and a Vietnamese partner — set up a manufacturing company in Bac Ninh. The Singapore side contributes a used production line, and both sides agree to hire an independent valuation firm to determine the contribution value. When the valuation service invoice of nearly VND 200 million arrives, they argue: who must pay this fee, and on the books, where does it go — added to the contributed asset’s value, or recorded as a period expense?

Legal framework: the 2023 Law on Prices and the 2020 Enterprise Law

Law No. 16/2023/QH15 on Prices was passed by the National Assembly on 19 June 2023 and took effect on 1 July 2024, replacing Law No. 11/2012/QH13 on Prices. One update to note: Law No. 140/2025/QH15 amending several articles of the Law on Prices took effect on 1 January 2026, so the currently consolidated text must be consulted. In the Law on Prices, Article 65 governs valuation costs and Article 66 governs state valuation dossiers — but their scope covers valuation councils established by state agencies, whose costs are funded from the state budget of the establishing agency. For a private transaction between investors as in the scenario above, the fee for hiring a valuation firm is a contractual service relationship, agreed by the parties themselves and outside the budget mechanism of Article 65.

On valuing contributed assets, Article 36 of the Enterprise Law No. 59/2020/QH14 provides: contributed assets other than Vietnamese Dong, freely convertible foreign currencies and gold must be valued and denominated in Vietnamese Dong. Upon enterprise formation, contributed assets must be valued by the founding members or shareholders on a consensus basis, or by a valuation organization; where a valuation organization values the assets, the value must be approved by more than 50% of the founding members or shareholders. The key liability point: if an asset is valued above its actual value at the time of contribution, the founding members or shareholders must jointly contribute the shortfall and are jointly liable for damage caused by intentionally overvaluing the contributed asset.

Who pays the valuation fee?

The law does not rigidly assign the payer; the answer lies in the valuation service contract and the agreement among the contributing parties. Practice follows three principles. First, the party signing the contract with the valuation firm bears the payment obligation — if a contributor hires a firm privately to evidence the value of its own asset, that contributor pays. Second, if the founding members or shareholders jointly engage one independent valuer, the fee is normally shared by agreement, most commonly in proportion to committed capital contributions; this agreement should be recorded in meeting minutes or the charter to prevent later disputes. Third, if the already-established company itself commissions the valuation — for example a revaluation, a capital transfer or a bank mortgage — the company pays and books the cost itself.

Beware of one risky pattern: one party unilaterally commissions a valuation and then uses the result to inflate the value of its own contributed asset. In that case, even though that party paid the fee, all founding members or shareholders may still have to jointly make up the shortfall under Article 36 of the Enterprise Law if the value is found to exceed the actual value. Jointly hiring one independent valuer and securing approval from more than 50% of members is therefore the safest course for everyone.

Where is the valuation fee booked?

For accounting, Circular No. 200/2014/TT-BTC dated 22 December 2014 of the Ministry of Finance (the corporate accounting regime, still in force) guides that enterprise establishment costs incurred before the enterprise commences operations are recorded in account 242 — prepaid expenses — and allocated gradually over no more than 3 years. A valuation fee incurred to determine the value of contributed assets at formation falls into this pre-establishment cost group: it does not increase the historical cost of the contributed asset — the contribution value has already been independently fixed by the valuation certificate — but is tracked separately and allocated to expenses in subsequent periods once the company operates.

Where an operating company incurs valuation costs — asset revaluation, valuation for a capital transfer or mortgage — the amount is recognized as corporate administration expense in the period according to the substance of the transaction, or capitalized when the conditions for asset recognition under accounting standards are met. For tax, whether the fee is deductible in determining taxable corporate income depends on the conditions of the tax law in force at the time it arises; the company should keep the full service contract, invoices and payment vouchers and consult its auditor before finalization to avoid disallowed expenses.

Four things to do now to avoid disputes

First, select a valuation firm qualified to provide valuation services under the 2023 Law on Prices, with practicing valuers in the right specialty (asset valuation or business valuation). Second, state the scope of work, fee, timeline and the paying party clearly in the service contract. Third, obtain the founding members’ or shareholders’ approval of the valuation result, ensuring the more-than-50% threshold under Article 36 of the Enterprise Law, and keep the minutes as evidence. Fourth, archive the valuation certificate, the valuation report and all accompanying dossiers for later accounting, audit and inspection needs.

Frequently asked questions

The foreign parent already commissioned a valuation before; can that fee be added to the Vietnamese subsidiary’s contributed capital value?
Not automatically. The contribution value is recorded at the asset value the parties approved; the valuation fee is a separate cost of the party that signed the engagement, unless the parties agree otherwise and record it in the contribution minutes.

Can the members value the asset by consensus without hiring a valuer?
Yes. Article 36 of the 2020 Enterprise Law allows founding members or shareholders to value assets on a consensus basis without mandatorily hiring a valuation organization. However, if a dispute later arises, an independent valuer’s certificate carries far greater evidential weight than an internal agreement.

The valuer was hired but only 40% of members approve the result — what then?
The condition in Article 36 of the 2020 Enterprise Law is not met, because the law requires the value determined by a valuation organization to be approved by more than 50% of the founding members or shareholders. The parties must renegotiate, adjust the valuation scope, or engage another firm.

Is the valuation fee deductible for corporate income tax?
It depends on whether the expense satisfies the deductible-expense conditions of the corporate income tax law in force when it arises. The company should retain the full contract, invoices and payment vouchers and consult its auditor before tax finalization.

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Reviewed by the Legal Practice Group – FLAT LAW FIRM

This legal analysis has been verified against current Vietnamese regulations and cross-border FDI transaction practices by the attorneys at FLAT LAW FIRM.