For most foreign investors doing business in Vietnam, taxes and money issues are the most important things that they will have to be extremely careful about. Therefore, one of the vital elements for your business to succeed is to get yourself familiar with the accounting standards as well as bookkeeping regulations in Vietnam.
With the solid understanding of the laws and regulations, you will be able to minimize your costs and ensure that your business is in compliance.
In Vietnam, how a company’s revenues and expenses must be recorded is guided with the accepted accounting principles (GAAP). These principles are known as Vietnamese Accounting Standards (VAS) and they are the major guidelines on how company shall prepare and record the books and accounts.
Accounting Standards Framework in Vietnam
All businesses, including local companies and foreign companies, are required to record their financial transactions in accordance with the VAS. For foreign companies, you are allowed to have two accounting records: one that is VAS-based and another one that is recorded for overseas headquarters.
It is common that most foreign companies manage a VAS accounting system and then convert it into the Financial Reporting Standards (IFRS). This conversion is done quarterly, serving as a reference for the foreign parent company.
Here are the important requirements in VAS accounting records:
- Must be recorded in Vietnamese; or combined with a foreign language with common usage
- Companies can choose the monetary unit but they have to notify the tax authorities
- Vietnamese Dong (VND) is the main accounting currency. However, foreign companies are permitted to choose a foreign currency as the accounting currency
- Submit necessary reports according to VAS regulations. These reports must be printed, signed by the General Director, and stamped with the company seal every month
- Ensure compliance with the Vietnam’s chart of accounts
Accounting Period and Timeline in Vietnam
In Vietnam, an accounting period is determined based on the calendar year, which is from January 1 to December 31. However, companies can adopt the 12-month accounting period after they have registered with the tax department in Vietnam.
The 12-month accounting period begins on the first day of each quarter to the following year, for instance, April 1 to next year’s March 31, July 1 to next year’s June 30, or October 1 to next year’s September 30.
2025: Vietnam is Heading Towards IFRS
By 2025, the Vietnamese government plans to eliminate VAS and starts adopting the International Financial Reporting Standards (IFRS).
Many foreign companies and listed companies have been demanding the government to make the change and now it is almost happening.
The implementation of IFRS is on par with international best practices – it helps boost efficiency and transparency in the governance of corporate.
Outsource Bookkeeping and Accounting to Cekindo
Cekindo’s bookkeeping and accounting outsourcing services not only save you time and money, but they also help you to meet employee shortage and make your practices more efficient and profitable.
Our professional accountants will keep your accounts and books up to data so that you do not have to be frustrated over the paperwork, allowing you to focus on more profitable business activities such as acquiring new customers and developing business.
Cekindo has stringent policies and guidelines in place to make sure that there is no risk of fraud. Our specialists also go through consistent training so that they stay updated on all the best legal and accounting practices.
Faster turnaround times, efficient support system, greater profitability and access to qualified staff are all the perks you will get when you outsource bookkeeping and accounting to Cekindo.
Contact us through the form below should you require our accounting services in Vietnam.