What are FDI reports and what do foreign companies need to know?
FDI reports are different than quarterly tax reports, annual financial statements, or the annual audit, which are all submitted to the tax department by our accounting dept and related partners. This is a report that is now required of all foreign companies in Vietnam.
While FDI reports contain similar data as tax reports, they are compiled separately by Cekindo’s legal team and submitted to the Department of Planning and Investment’s online database.
When you apply for an update to your IRC (Investment Registration Certificate), even with something as minor as a name change, the DPI (Department of planning and investment) will check the online database to see if all the previous FDI reports for the company have been submitted. If the previous FDI reports have not been submitted, the DPI will usually always reject the application for amending the IRC and potentially impose fines (usually around 40 million VND per missing report). Note, the FDI reports relate to the IRC only, not the ERC (Enterprise Registration Certificate).
This is the main reason why we encourage foreigners doing business in Vietnam to regularly submit FDI reports, in order to avoid this rejection from the DPI in case they want to amend the IRC (add capital, change the name, etc). The DPI sees FDI reports as a verifiable track record of legal compliance.
Retroactive Requirements
FDI Reports are being enforced retroactively, meaning that they must be completed for all years your company has been active in Vietnam. All FDI companies must be up to date with their reports. For example, if your company was formed in 2019, you must complete FDI reports for 2019, 2020, 2021, and 2022.
What information is contained in FDI Reports?
- FDI Reports include information such as your tax contribution, capital injection , loans, employees, and business activities
Why do I need to update my FDI Reports?
- Fully complying with FDI reports is a prerequisite to get the approval from the investment license authority to amend your IRC (Investment Registration Certificate) to increase/ decrease capital, extend capital injection deadline, add business lines/ business sector, or change your company address.
( This means you will not be able to increase charter capital, change your company name, or change your registered address in the future if your reports are not up to date.)
Fines Regarding FDI Report Violations
| Violations subjected to penalty | From Jan 1st 2022 | Before Jan 1st 2022 |
|---|---|---|
| Failure to comply with regulations on reporting investment activities | VND 30,000,000 to VND 50,000,000 | VND 5,000,000 – VND 10,000,000 |
| OR Reporting investment activities behind prescribed schedule; | VND 30,000,000 to VND 50,000,000 | 0 |
| Submitting an untruthful investment activities; | VND 30,000,000 to VND 50,000,000 | VND 5,000,000 – VND 10,000,000 |
| or inaccurate report on investment activities; | o VND 50,000,000 | 0 |
