Many foreign investors believe that once the Investment Registration Certificate (IRC) and Enterprise Registration Certificate (ERC) are issued, the most difficult part is over. However, in reality, the most critical stage begins after incorporation.

Understanding the legal obligations after setting up FDI company in Vietnam is essential to avoid penalties, tax risks, and compliance violations that could affect business operations. Moreover, Vietnamese regulations require newly established FDI enterprises to complete a series of mandatory procedures within the first 30–90 days.

In this article, MVA Vietnam provides a comprehensive guide to help foreign investors clearly understand what must be done after company formation.

I. Why compliance after incorporation is extremely important

Many FDI companies are fined not because of intentional violations, but because they are unaware of the legal obligations after setting up FDI company in Vietnam.

Therefore, failure to comply may lead to:

• Administrative penalties
• Tax arrears and late payment interest
• Suspension of invoice issuance
• Difficulties in profit remittance
• Negative records with authorities

Furthermore, authorities in Vietnam now conduct frequent post-licensing inspections, especially for FDI enterprises in the first year of operation.

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II. Initial tax registration and digital signature setup

One of the first legal obligations after setting up FDI company in Vietnam is completing tax registration with the local tax department.

This includes:

• Registering a digital signature (USB token)
• Opening an electronic tax account
• Registering the accounting method
• Registering VAT declaration method
• Registering invoice usage (e-invoice)

Moreover, without a digital signature and tax account, the company cannot submit tax declarations or issue invoices legally.

III. Opening a capital bank account and capital contribution

In addition, FDI companies must open:

• A Direct Investment Capital Account (DICA)
• A current transaction account

Foreign investors must contribute charter capital via the DICA within 90 days. This requirement is a core part of the legal obligations after setting up FDI company in Vietnam.

Failure to contribute capital on time may result in penalties and forced adjustment of the Investment Certificate.

IV. Accounting system setup in accordance with VAS

Vietnam requires all FDI enterprises to apply Vietnamese Accounting Standards (VAS).

Therefore, companies must:

• Appoint a chief accountant or accounting service firm
• Register accounting regime
• Set up chart of accounts
• Prepare accounting books and records

At the same time, accounting documents must be maintained in Vietnamese, even if internal reports are in English. This is often overlooked in the legal obligations after setting up FDI company in Vietnam.

V. Initial tax declarations (even with no revenue)

Many investors mistakenly think taxes are only required when revenue is generated. However, this is incorrect.

FDI companies must submit:

• Monthly/quarterly VAT reports
• Quarterly PIT reports
• Quarterly CIT provisional reports
• Annual financial statements

Even if there is no business activity, zero reports are still mandatory under the legal obligations after setting up FDI company in Vietnam.

5.1 E-invoice registration before issuing invoices

Before issuing the first invoice, companies must register e-invoice usage with tax authorities.

Consequently, issuing invoices without approval can lead to heavy penalties and invalid invoices. This step is a key compliance requirement in the legal obligations after setting up FDI company in Vietnam.

VI. Labor declaration and social insurance registration

If the company hires employees, it must:

• Declare labor usage to the Department of Labor
• Register social insurance codes
• Contribute social, health, and unemployment insurance

Furthermore, labor contracts must follow Vietnamese labor law templates. This is another important part of the legal obligations after setting up FDI company in Vietnam.

VII. License tax (Business license tax) payment

Within the first month of operation, FDI companies must pay the annual license tax.

This is a small amount but commonly forgotten. However, late payment leads to penalties and interest, which frequently occurs when companies do not understand the legal obligations after setting up FDI company in Vietnam.

VIII. Foreign investment reporting obligations

FDI enterprises must submit periodic reports to the Department of Planning and Investment.

These reports include:

• Quarterly investment reports
• Annual investment reports
• Reports on project implementation status

Therefore, this reporting duty is a unique requirement only applied to FDI companies under the legal obligations after setting up FDI company in Vietnam.

IX. Compliance with transfer pricing and related transactions

If the FDI company has transactions with its parent company, transfer pricing regulations apply immediately.

Moreover, companies must prepare:

• Related party transaction declaration forms
• Transfer pricing documentation

This requirement exists even in the first year of operation and is an advanced aspect of the legal obligations after setting up FDI company in Vietnam.

X. Annual financial statements and independent audit

FDI enterprises are required to:

• Prepare annual financial statements
• Conduct an independent audit by a licensed audit firm
• Submit audited reports to authorities

As a result, audit compliance is not optional but mandatory in the legal obligations after setting up FDI company in Vietnam.

10.1 Common mistakes foreign investors make

Despite good intentions, many investors make these mistakes:

• Missing tax deadlines due to no accountant
• Late capital contribution
• Issuing invoices before registration
• Not submitting investment reports
• Ignoring transfer pricing rules

However, all these mistakes can be avoided with proper compliance support.

10.2 How MVA Vietnam supports FDI compliance from day one

MVA Vietnam specializes in supporting foreign investors with full compliance services, including:

• Initial tax and accounting setup
• Monthly tax declaration and bookkeeping
• E-invoice and digital signature registration
• Labor and insurance procedures
• Investment reporting
• Transfer pricing documentation
• Independent audit services

Therefore, investors can focus on business development while we handle all legal obligations after setting up FDI company in Vietnam.

XI. Conclusion

Clearly, incorporation is only the beginning. The real challenge lies in understanding and fulfilling all legal obligations after setting up FDI company in Vietnam. Moreover, compliance is not only about avoiding penalties but also about building a transparent and sustainable business in Vietnam.With professional support from MVA Vietnam, foreign investors can ensure full legal compliance from the first day of operation.

Contact MVA Vietnam today for a full compliance package designed specifically for FDI enterprises.

MVA VIETNAM ACCOUNTING AND AUDITING COMPANY LIMITED

Address: LK3 – 04, Loc Ninh urban area, TT. Chuc Son, H. Chuong My, City. Hanoi

Phone: 024.7109.7766 (keys 5) – Hotline: 0329.199.983

Wechat: 0329.199.983

Email: quynt.mva@gmail.com