BENEFICIAL OWNER UNDER THE REGULATIONS OF VIETNAMESE LAW

1. Introduction

The concept of Beneficial Owner (“BO”) was first introduced in Law on Enterprises amended 2025 in the context of Vietnam’s urgent need to “Establish a mechanism that provides competent authorities with timely access to adequate, accurate, and up-to-date information on the beneficial owners of legal entity (and legal agreement, where applicable), and to apply appropriate, effective, proportionate, and dissuasive measures against violations” as a remedial action designated by the FATF to remove Vietnam from the Increased Monitoring List (“Grey List”)[1]. At the same time, this amendment aims to improve the legal framework and foster a transparent and secure business environment, thereby preventing and combating commercial fraud, tax evasion, corruption, money laundering, and terrorist financing.

In this article, we analyze the legal framework and the obligations that enterprises must comply with under the current regulations. The scope of this article does not include enterprises wholly owned by the State, nor joint-stock companies or multi-member limited liability companies with State capital contribution.

2. Definition

According to Clause 35, Article 4 Law on Enterprises 2020, as amended 2025: “Beneficial owner of an enterprise having legal person status (hereinafter referred to as “beneficial owner”) means an individual who has actual ownership of charter capital of or has the right of control in that enterprise...”

Accordingly, in accordance with regulations of law, BO of an enterprise must be an individual, classified into two categories:

(i) An individual who has actual ownership of charter capital of the enterprise;

(ii) An individual who has the right of control in that enterprise.

From this regulation, it can be understood that a person qualifying as BO does not necessarily have to be directly named in the enterprise registration documents, but may instead be the individual who holds the actual ownership of charter capital or who has the right of control in the enterprise’s operations and key decisions.

3. Criteria for determination

Consistent with the above definition, Article 17 of Decree No. 168/2025/NĐ-CP sets out the criteria for identifying BO as one of the following:

a) An individual who directly owns at least 25% of the charter capital or at least 25% of the total voting shares of the enterprise;

b) An individual who indirectly owns at least 25% of the charter capital or at least 25% of the total voting shares of the enterprise through another organization;

c) An individual who has the right of control of the ratification of decisions on at least one of the following matters:

(i) Appointment, dismissal, or removal of the majority or all members of the Board of Directors, the Chairperson of the Board of Directors, the Chairperson of the Members’ Council, the legal representative, Director, or General Director of the enterprise;

(ii) Revisions to the enterprise’s charter;

(iii) Changes in the organizational structure of the company;

(iv) Reorganization or dissolution of the company.

Neither the Law on Enterprises nor its implementing regulations further specify what constitutes a controlling right or the forms through which it is exercised. However, according to the prevailing practice of business registration authorities:

• A right of control is interpreted as a situation in which, without the consent of such an individual, the enterprise’s decisions on the matters above cannot be approved, even when the voting threshold required by the charter is met;
• A right of control may be exercised through various means, such as private agreements among members (member or shareholder agreements), reputation or influence in business or the market, control by founding shareholders, or advisory authority.

Correspondingly, with respect to each type of enterprise, the persons qualifying as beneficial owners and the forms of controlling interest are illustrated in the following table:

4. Responsibilities for Declaration, Notification, and Retention

a) Cases Requiring Declaration

Not all information on BO or the information used to identify BO is required to be declared. Under enterprise law, only certain cases require a declaration with the Business Registration Authority, specifically:

Information on BO:

• Individuals who are shareholders owning at least 25% of the total voting shares of the enterprise[2];
• Individuals who are members owning at least 25% of the charter capital in a partnership or a multiple-member limited liability company[3];
• Individuals who are owners of a single-member limited liability company[4];
• Individuals having the right of control as defined in Point (b), Clause 1, Article 17 of Decree No. 168/2025/NĐ-CP[5].

Information used to identify BO:

• Organizations that are shareholders owning at least 25% of the total voting shares[6].

b)The subjects are obligated to perform declaration, notification, and record-keeping duties, and the timing of those obligations

The founder of an enterprise must be responsible for the declaration when the enterprise is established.

The enterprise must be responsible for the notification to the business registration authority of any changes within 10 days from the date of the change. Common circumstances leading to changes include:

• Change of company owner/member/shareholder;
• Conversion of company type;
• Change in charter capital, capital contribution, or ownership ratio in multiple-member limited liability companies.

!!! Note: For enterprises registered before the effective date of Law on Enterprises amended 2025 (i.e., before July 1, 2025), the suppementation of Information on BO (if any) or Information used to identify BO (if any) shall be carried out simultaneously when the enterprise submits its next change of the content of business registration or notifice of the content of business registration, unless the enterprise voluntarily provides the information earlier.

5. Information Retention Requirements

Information to be retained: Information on BO that has been declared or notified to the provincial Business Registration Authority (specifically, the list of BO of the enterprise).
Form of retention: In paper or digital form.

6. Updating and Supplementing Information on BO

Enterprises must file a notification to update or supplement the information on BO when not required to notify a change in information on BO. For example, when a BO has changes in:

• Personal identification documents;
• Contact address;
• Other personal details such as name, nationality, or ethnicity.

Disclaimer

This Newsletter contains only brief notes and includes legislation in force as of November 2025. The information herein is general and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one is entitled to rely on this information, and no one should act on such information without appropriate professional advice obtained after a thorough examination of the particular situation.