Beneficial Ownership in Enterprises

The concept of beneficial ownership is no longer unfamiliar within the Vietnamese legal system. It was first formally introduced under the Law on Anti-Money Laundering 2022. Initially applicable mainly to financial market participants, the concept has now been further institutionalized in the corporate legal framework under the Law Amending and Supplementing a Number of Articles of the Law on Enterprises (Law No. 76/2025/QH15).

The identification of ultimate beneficial owner (“UBO”) has become a global standard, promoted by international organizations such as the Financial Action Task Force (FATF), the World Bank (WB), and the International Monetary Fund (IMF), as well as modern trade agreements such as the CPTPP and EVFTA.

The introduction of UBO-related provisions into Vietnamese enterprise law represents a significant step forward in narrowing legal gaps and aligning Vietnam with international compliance standards. Accordingly, businesses must understand how to ensure proper, transparent, and complete compliance with current regulations on beneficial ownership.

1. Determination of Ultimate Beneficial Owner

Pursuant to Clause 35, Article 4 of the Law on Enterprises 2020 (as amended by Law No. 76/2025/QH15) and Article 17 of Decree No. 168/2025/NĐ-CP, an ultimate beneficial owner is determined based on two criteria:

    – Actual ownership of charter capital means an individual who directly or indirectly owns 25% or more of the charter capital or voting shares of a company.

   – Control over the enterprise means an individual who has the authority to approve at least one of the following matters:

  • Appointment, dismissal, or removal of the majority or all members of the Board of Directors, Chairman of the Board of Directors, or Chairman of the Members’ Council;
  • Appointment of the legal representative, General Director, or Director;
  • Amendments or supplements to the company’s charter;
  • Changes to the organizational structure of the company;
  • Restructuring or dissolution of the company.

Article 18 of Decree 168/2025/NĐ-CP requires both founders and enterprises to declare and notify the UBO to the provincial business registration authority as part of the enterprise registration dossier.

2. Implementation Timeline

For enterprises incorporated prior to July 1, 2025, the supplementation of information concerning the company’s UBOs (if any), along with the details required to identify them, shall be conducted concurrently when the enterprise next files to register or notify changes to its enterprise registration particulars..

For enterprises incorporated after July 1, 2025, pursuant to the prevailing Law on Enterprises, information regarding the beneficial owner(s) constitutes an integral part of the enterprise registration documentation. Relevant individuals and organizations bear the responsibility of declaring this information, provided there are sufficient conditions and legal grounds to identify the beneficial owner(s) within the enterprise.

3. Implementation Procedures

Step 1: Determination of Beneficial Owners

The enterprise or its founders must identify UBOs, including:

  • Individuals holding 25% or more of voting shares;
  • Individuals holding 25% or more of charter capital in partnerships or multi-member limited liability companies;
  • Individual owners of single-member limited liability companies;
  • Individuals possessing the right to control the approval of at least one of the following matters: the appointment, dismissal, or removal of a majority or all members of the Board of Directors, the Chairman of the Board of Directors, the Chairman of the Members’ Council, or the enterprise’s legal representative, Director, or General Director; the amendment of or supplementation to the enterprise’s Charter; any alterations to the company’s organizational management structure; or the reorganization or dissolution of the company

Step 2: Preparation of Registration Application

The dossier includes:

  • Announcement on changes in enterprise registration contents (Form No. 12, Circular No. 68/2025/TT-BTC);
  • List of beneficial owners (Form No. 10, Circular No. 68/2025/TT-BTC);
  • Power of attorney.

Step 3: Submission of application

The application is submitted to the Business Registration Office under the Department of Finance in the province where the enterprise is headquartered.

 

Step 4: Receipt of Results