The Compliance Obligation Most FDI Companies Do Not Know About — Until It Is Too Late
Every foreign-invested enterprise in Vietnam that holds an Investment Registration Certificate (IRC) is required to file periodic investment monitoring reports through Vietnam’s national investment information system. This obligation is not optional, not automatic, and not waived by silence from the licensing authority. And it is one of the most consistently overlooked compliance requirements in the Vietnam FDI landscape.
ECOVIS Vietnam Law is advising on cases where foreign investors have not filed a single investment monitoring report in five or more years — not because they chose to ignore the requirement, but because no one told them it existed. The legal consequences of that gap are severe, sequential, and not easily reversed.
What the Law Requires
Under Vietnam’s Law on Investment 2025 (Law No. 143/2025/QH15, effective 1 March 2026) and the implementing regulations including Decree 122/2021/ND-CP on administrative penalties in the planning and investment sector, foreign-invested enterprises are required to submit investment monitoring and evaluation reports to the investment registration authority on a periodic basis — both as annual reports and as broader project-stage reports at defined milestones.
The filing channel is the National Investment Information System (the national portal managed at central level). Since the institutional reform that merged the Ministry of Planning and Investment into the Ministry of Finance (and similarly merged provincial DPI offices into provincial Finance Departments), the submission portal and the supervising authority have changed — but the reporting obligation has not. In Ho Chi Minh City, companies must now file on two systems: the national portal managed at the Ministry of Finance level, and the local portal managed by the Ho Chi Minh City Finance Department.
The Penalty Structure Under Decree 122/2021
Failure to file investment monitoring reports constitutes a violation of the investment law’s disclosure and supervision obligations. Decree 122/2021 provides for penalties that accumulate progressively with each unfiled period. A company that has not filed for five consecutive years does not simply receive a one-time fine — it faces multiple cumulative penalty decisions covering each reporting period, each carrying its own administrative sanction and interest calculation.
More critically: the sustained failure to file creates a documentary basis for the licensing authority to characterise the project as one that has “not been implemented” or has been implemented in a materially non-compliant manner. Under the Law on Investment 2025, this characterisation is one of the statutory grounds for the investment registration authority to issue a decision terminating the investment project and revoking the IRC.
The Domino Effect of IRC Revocation
IRC revocation is not a standalone penalty — it is the beginning of a cascade that affects every dimension of the company’s financial and operational position.
Step 1 — DICA account freezing. The Direct Investment Capital Account (DICA) held at a Vietnam commercial bank is linked to the IRC as the registered investment project. When the IRC is revoked, the authorisation basis for the DICA is removed. The bank is notified and the DICA is frozen — meaning the company cannot receive new foreign capital, cannot disburse operating funds through the DICA channel, and cannot remit profits to the foreign investor.
Step 2 — Profit remittance permanently blocked. Profit remittance from Vietnam requires a valid IRC and an active DICA. With both compromised by revocation, the foreign investor cannot repatriate any profits accumulated since the IRC was revoked — and in practice, the tax authority may extend the challenge to all prior periods where the company operated without meeting its reporting obligations.
Step 3 — Operating cost rejection by the tax authority. The Vietnam tax authority is entitled to challenge the deductibility of operating costs incurred during periods when the investment project was not properly compliant. If the IRC is revoked on the basis that the project was “not implemented” for five years — and five years of operating costs and depreciation claims are on the books — the tax authority has legal grounds to disallow those costs entirely. The resulting CIT liability, together with late payment interest at 0.03% per day, can be substantial.
Who Is Most At Risk
The foreign-invested companies most at risk from this specific compliance gap are those that: were established and received their IRC, but then operated at a lower scale than the licensed project anticipated; had changes in key management personnel without a compliance handover process; or relied on an accounting firm or HR provider that managed payroll and tax filings but did not cover investment-law compliance obligations. The investment monitoring report is a licensing compliance obligation — it sits with the investment registration authority, not the tax authority — and it is frequently absent from the scope of accounting retainer engagements.
What To Do If Your Company Has Not Filed
The most important step is to act before the licensing authority acts first. A voluntary disclosure and catch-up filing — accompanied by a cover letter acknowledging the gap, explaining the circumstances, and requesting administrative leniency — is materially better positioned than a company that is caught in a routine inspection or compliance sweep.
The remediation process involves: identifying the unfiled periods and the correct reporting portal; preparing the monitoring reports for each period (using available financial statements, capital contribution records, and operational data); calculating the likely penalty exposure under Decree 122/2021; and filing the reports with a concurrent administrative letter to the licensing authority requesting settlement of any outstanding penalty obligations on a graduated or negotiated basis. Where the licensing authority has already issued a warning notice or pre-revocation communication, the response timeline is compressed and legal representation is strongly recommended.
Frequently Asked Questions
How do I know if my company has missed investment monitoring report filings?
Log into the National Investment Information System portal using your company’s IRC project code. If you have never accessed the portal or cannot log in (a common issue after the DPI-to-Finance Ministry system migration, where old project codes were not automatically linked to new accounts), contact ECOVIS Vietnam Law for a compliance status check. The licensing authority’s records will show your filing history.
Can the IRC revocation be reversed after the decision is issued?
Once a revocation decision is issued, reversal requires a formal administrative appeal process and is not guaranteed. The stronger position is to remediate before a decision is issued. If a pre-revocation notice has been received, the company typically has 30 to 60 days to file a response and corrective action plan — acting immediately within that window is essential.
Does this obligation apply to representative offices as well as FIEs?
Representative offices have separate reporting obligations and a different licensing framework — the investment monitoring report obligation applies specifically to foreign-invested enterprises holding an IRC. However, representative offices have their own periodic renewal and reporting requirements that are equally overlooked and carry similar renewal-refusal risk if not maintained.
Is there a one-time penalty cap or amnesty for accumulated missed filings?
There is no general amnesty. Decree 122/2021 provides for penalties per violation per period. However, voluntary disclosure, prompt remediation, and cooperation with the licensing authority consistently result in more favourable penalty outcomes than non-disclosure discovered during an inspection. The practical negotiation window is before the authority issues a formal finding — not after.
Has your Vietnam company filed its investment monitoring reports? If you are unsure, or if you know reports have been missed, do not wait for the licensing authority to act first. Contact Attorney Vu Manh Quynh at ECOVIS Vietnam Law for a compliance status review and remediation plan. Email: vietnam@ecovislaw.vn | Website: www.ecovislaw.vn
This material is for general informational purposes only and does not constitute legal, tax or professional advice. Investors should seek specific advice based on their business sector, ownership structure and investment location in Vietnam. Legal and regulatory references reflect the position as of July 2026 under the Law on Investment 2025 (Law No. 143/2025/QH15) and Decree 122/2021/ND-CP.
Attorney Vu Manh Quynh is the Managing Partner of ECOVIS Vietnam Law, advising international investors on Foreign Direct Investment (FDI), corporate governance, and regulatory compliance in Vietnam. Email: vietnam@ecovislaw.vn | Website: www.ecovislaw.vn
