In the context of globalization and deeper economic integration, corporate ownership transparency has become a critical focus for improving governance, combating money laundering, and attracting investment. The concept of the “beneficial owner” — the individual who ultimately owns or controls a business entity, even if not formally listed in official records — has gained increasing attention across legal systems worldwide.
In Vietnam, instead of introducing a new law, the Government has issued an amended Decree in 2025, revising the regulations guiding the implementation of the 2020 Law on Enterprises. This updated Decree clarifies the responsibilities of enterprises in identifying, declaring, and disclosing information on beneficial owners, aligning domestic regulations with international standards.
This article examines the key contents of the amended Decree, including the legal definition of beneficial owner, the identification and reporting process, the obligations of relevant parties, and the practical implications for businesses, regulatory authorities, and investors.
1. What Is a Beneficial Owner?
Under Article 17 of the Decree, an ultimate beneficial owner of an enterprise with legal entity status is defined as an individual who satisfies one of the following criteria:
(a) Directly or indirectly owns at least 25% of the charter capital or 25% of the total voting shares of the enterprise. An individual is considered to hold indirect ownership if he or she owns 25% or more of the charter capital or 25% or more of the total voting shares of the enterprise through another organization;
(b) Has the right to control the decision-making on at least one of the following matters: appointment or removal of the majority (or all) of the members of the Board of Directors, chairman of the board of directors, chairman of the members’ council; the legal representative; the general director or director; amending or supplementing the company charter; changing the governance structure; restructuring or dissolving the company.
2. Enterprise Obligations
Building on this, Article 18 stipulates that founders and enterprises are obligated to identify and disclose the ultimate beneficial owner during the business registration process. This information must be submitted to the competent licensing authority in accordance with the law.
In cases where a corporate shareholder holds a stake that meets or exceeds the prescribed threshold, the enterprise must provide comprehensive corporate details, including the entity’s name, business registration number or establishment decision, date and place of issuance, registered head office address, and the percentage of ownership held.
Additionally, enterprises are required to declare any individual who directly or indirectly owns or controls at least 25% of the charter capital or voting rights, in accordance with the beneficial ownership criteria.
3. Why This Regulation Matters: Transparency as a Competitive Advantage
The introduction of beneficial ownership regulations in Vietnam is not aimed at burdening legitimate businesses, but rather at fostering market trust and legal certainty. For both domestic and foreign investors, increased transparency contributes to a more predictable and stable business environment — one that aligns with global compliance and financial standards.
One of the key motivations behind this regulatory push is Vietnam’s effort to meet international obligations and exit the Financial Action Task Force (FATF) “grey list.” Transparent corporate ownership is a critical benchmark in this process, prompting Vietnamese authorities to accelerate legal reforms in this area.
For businesses, early compliance with beneficial ownership rules is not only a legal requirement, but a strategic advantage. It can:
- Facilitate smoother company registration and restructuring processes;
- Prevent delays in opening corporate bank accounts;
- Minimize the risk of triggering red flags during tax audits or regulatory inspections;
- Enhance credibility in joint ventures and cross-border mergers & acquisitions.
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1. Lawyer Vu Thi Phuong Thanh, Manager of TLA Law LLC, Ha Noi Bar Association
Email: vtpthanh@tlalaw.vn
2. Lawyer Tran My Le, Chairman of the Members’ Council, Ha Noi Bar Association
Email: tmle@tlalaw.vn.
– Nguyen Huong Huyen-