New regulations on beneficial owners of enterprises

Provisions on beneficial owners of enterprises have been officially incorporated into Vietnam’s corporate legal framework through the Law amending and supplementing some Articles of the Law on Enterprises No. 76/2025/QH15 and Decree No. 168/2025/ND-CP on enterprise registration. This marks a significant step in enhancing transparency in ownership structures in Vietnam and fulfilling the country’s international commitments to combating money laundering, terrorism financing, and the proliferation financing of weapons of mass destruction. In the following article, TNTP presents an overview of the new regulations on beneficial owners of enterprises under current Vietnamese law.

1.Definition of beneficial owner of an enterprise 

To ensure transparency of information on the beneficial owner of an enterprise in accordance with the recommendations of the Financial Action Task Force (FATF), the concept of a “beneficial owner of an enterprise” (“BO”) has been formally codified and incorporated into the corporate legal system of Vietnam according to the Law amending and supplementing some Articles of the Law on Enterprises No. 76/2025/QH15, which shall take effect as of 1 July 2025 (“Amended Law on Enterprises 2025”).

Pursuant to Clause 35, Article 4 of the Amended Law on Enterprises 2025, the beneficial owner of an enterprise having legal entity status is defined as an individual who actually owns the charter capital or has controlling rights over such enterprise, except for the representative of the owner at a wholly state-owned enterprise or the representative of state capital in a joint-stock company or a two-member limited liability company, as prescribed by the laws on the management and investment of state capital in enterprises.

Accordingly, unlike the legal representative, who is the person whose name appears on legal instruments and documents relating to the business operations of the enterprise – the BO is determined based on actual control or ownership of charter capital, with the power to exercise control over the enterprise, regardless of whether such person’s name appears in the enterprise’s legal documentation.

Previously, many enterprises in Vietnam operated under so-called “nominee” or “front” arrangements, creating complex and non-transparent ownership structures. This legal facade concealed the true identity of individuals who actually exercised controlling power over the enterprises, thereby hindering the tracing of capital sources, particularly in illegal activities. In practice, enterprises have often been misused to conceal criminal identities, disguise illicit cash flows, or even facilitate unlawful cross-border money transfers. Therefore, to ensure transparency and security in the private sector, the disclosure of beneficial ownership is not only a domestic legal requirement but also reflects Vietnam’s international commitment to combating money laundering and terrorism financing.

The codification of this concept marks a significant milestone in Vietnam’s efforts to enhance transparency in corporate ownership structures, ensuring commitment and accountability in corporate transactions, while at the same time contributing to the prevention and suppression of money laundering and terrorism financing at the international level.

2.Criteria for determining a Beneficial Owner of an Enterprise

Government Decree No. 168/2025/ND-CP on enterprise registration (“Decree 168”) prescribes the criteria for determining a BO. Under Article 17 of Decree 168, a BO is an individual who satisfies any one of the following conditions:

• An individual who directly or indirectly owns at least 25% of the charter capital or 25% of the total voting shares of the enterprise.

For this provision, an indirect owner is a person who holds at least 25% of the charter capital or voting shares through another legal entity.

• An individual who has the authority to decide or control the approval of at least one of the following matters:

– Appointment, dismissal, or removal of the majority or all members of the Board of Directors, the Chairperson of the Board, or the Chairperson of the Members’ Council;

– The legal representative, director, or general director;

– Amendments to the company’s charter;

– Changes to the organizational and management structure;

– Reorganization or dissolution of the company.

It is evident that these criteria are founded upon two fundamental principles: the percentage of charter capital ownership and the right to control the enterprise. The parallel application of these two criteria ensures comprehensive coverage of a wide range of practical scenarios in enterprise ownership and management structures.

3.Obligations to register, declare, and retain information on Beneficial Owners

The obligations concerning the registration, declaration, and retention of BO information are set out as follows:

• Registration of the BO list:

– Under Clauses 6, 7, 9, 10, and 11 of the 2025 Amended Law on Enterprises, when registering for enterprise incorporation, the company must submit a list of BOs (if any).

– The BO list must include, inter alia: full name; date of birth; nationality; ethnicity; gender; contact address; ownership percentage or controlling rights; and identification document details of each BO.

• Declaration and notification of BOs:

Article 18 of Decree 168 requires the enterprise’s founders and the enterprise itself to declare and notify the provincial-level business registration authority of its BOs, including:

– Individuals who are shareholders holding 25% or more of the total voting shares of the enterprise;

– Individuals who are members holding 25% or more of the charter capital of a partnership or a multi-member limited liability company;

– Individuals who are owners of single-member limited liability companies;

– Organizations that are shareholders holding 25% or more of the total voting shares of the enterprise.

For individuals who exercise control or decisive influence as defined in Point b, Clause 1, Article 17 of Decree 168, the founders or the enterprise are responsible for self-identifying, declaring, and notifying such information to the competent provincial authority (if applicable).

• Retention of BO information:

Article 19 of Decree 168 requires enterprises to retain the list of their declared and notified beneficial owners, which has been submitted to the provincial-level business registration authority, in either paper or electronic form.

• Notification of changes in BO information:

Clause 13, Article 1 of the Amended Law on Enterprises 2025 and Article 52 of Decree 168 stipulate that an enterprise must carry out the procedure for notifying changes within 10 days from the date of any change in the information of its beneficial owners or the declared ownership ratio, as previously submitted to the provincial-level business registration authority.

Additionally, under Clause 2, Article 1 of the Amended Law on Enterprises 2025, enterprises must provide BO information to competent state authorities upon request, particularly for inspections, examinations, investigations, or anti–money laundering and counter–terrorism financing purposes.

The foregoing sets out TNTP’s analysis of the new regulations on beneficial owners of enterprises. We trust that the above will be of assistance to our readers. Should you have any queries or require further discussion, please do not hesitate to contact us.

Best regards,