Have you once considered using nominee structure to simplify business operations or protect the ultimate beneficial owner?
Now, who owns what is not a mystery anymore in Vietnam!
At least, not legally.
On June 17, 2025, the National Assembly of Vietnam officially passed amendments to the Law on Enterprises. For the first time, the law introduced beneficial ownership regulations, a binding requirement for companies to identify and disclose their beneficial owners, the individuals who truly own or control a business. This change is part of Vietnam’s broader push to align with international standards and eliminate shadow ownership structures.
This legal update marks a major step forward in Vietnam’s effort to enhance corporate transparency, combat money laundering, and improve investor confidence. While beneficial ownership regulations in Vietnam have been discussed in theory for years, they are now an integral part of the country’s enterprise law framework.
However, not all the details are in place yet. Some obligations are clear. Others are still waiting for guiding decrees from the government. Foreign investors should be aware and act now, but with clarity about what’s certain, what’s coming, and what’s best practice in the meantime.
In here, we will together explore the five most critical truths that international investors when doing business in Vietnam must understand about beneficial ownership regulations in Vietnam based on what’s been passed, what’s expected, and what’s wise to prepare for.
Beneficial Ownership Is Now a Legal Obligation in Vietnam
For years, investors could rely on nominee shareholders, complex holding structures, or offshore layers to remain discreet. While legal ownership was declared in public documents, the real power and profit often belonged to someone else entirely.
Vietnam’s 2025 amendment to the Law on Enterprises ends that “solutions”.
The newly added provisions of beneficial ownership regulations require all companies, domestic and foreign, to collect, store, update, and disclose information on their beneficial owners when requested by competent authorities. This requirement on beneficial ownership regulations is not optional. It applies to companies of all sizes and sectors, including those backed by foreign capital.
The law marks a major shift from the traditional approach of self-reporting legal owners. It recognizes that true ownership may lie beneath the surface, and that economic control, not paperwork, tells the real story.
Complying with the Law Will Boost Your Business Credibility
The goal of these beneficial ownership regulations in Vietnam is not to punish legitimate business owners. On the contrary, it is to build trust in the market. For foreign investors, this means greater predictability, safer transactions, and easier integration with international financial and compliance systems.
Vietnam is under pressure to tighten its legal system and escape the Financial Action Task Force (FATF) “grey list”. Greater transparency around ownership is one of the key benchmarks. That’s why authorities are acting fast, and why foreign investors should act ahead to stay compliant with the beneficial ownership regulations.
Complying with beneficial ownership regulations in Vietnam early helps:
- Secure smooth company registration or restructuring
- Reduce delays in opening bank accounts
- Avoid red flags during tax audits or inspections
- Demonstrate good faith in joint ventures or cross-border M&A
In short, companies that are transparent from the beginning will face fewer roadblocks later. And in today’s regulatory climate, that can be a decisive advantage.
What the New Beneficial Ownership Regulations in Vietnam Look Like
Let’s break down what the law says, and what it does not say yet about the beneficial ownership regulations in Vietnam.
What’s Certain:
- The definition of a beneficial owner is now part of Vietnamese law. It refers to any natural person who directly or indirectly owns or controls a company or benefits financially from its activities.
- All companies must now maintain accurate and updated records of their beneficial owners and provide this information upon request by state authorities.
- The legal responsibility to do so falls on the company and its legal representative.
This part of the law on beneficial ownership regulations will be in force starting July 2025. The obligation is real and immediate.
What’s Not Yet Specified:
- The thresholds or conditions under which a person qualifies as a beneficial owner (e.g., owning 25% of capital, voting rights, profits, or control).
- The exact procedure for declaring beneficial ownership, such as which forms to submit or how often to update records.
- The penalties for failure to comply, or for false declarations, which are expected to be set out in a future Decree or Circular.
Common Global Standard:
In the absence of domestic thresholds, most countries follow FATF guidelines, which define a beneficial owner as someone who:
- Owns 25% or more of a company’s shares or voting rights, or
- Exercises effective control over the company, even if indirectly, or
- Benefits from 25% or more of the company’s income or assets
This benchmark is widely accepted and recommended for practical compliance until the official Decree on beneficial ownership regulations is issued.
Real-Life Scenario:
We had come across a situation which foreign investors owns company through an offshore structure. The client attempted to open a bank account at a foreign owned bank in Vietnam. The application was rejected because ultimate BO is not disclosed enough under the bank’s international standard practice. The client then switched to a local bank in Vietnam to open a bank account in Vietnam, and the application went through quickly. However, likely soon, when Vietnamese implementation rules on beneficial ownership regulations, that would not happen.
Legal Sources, Risks, and How Enforcement Will Work
Vietnam’s shift toward beneficial ownership disclosure is backed by a coordinated legal campaign. The amended Law on Enterprises (2025) is only one part of the bigger puzzle.
Legal Foundation:
- Law on Enterprises (amended 2025) which establishes the legal requirement for all businesses to identify and maintain information on their beneficial owners.
- Law on Anti-Money Laundering, which already requires financial institutions to perform Know-Your-Customer (KYC) due diligence and report suspicious ownership structures.
- Upcoming Decree & Circulars on beneficial ownership regulations will will fill in key blanks, such as thresholds, submission requirements, and administrative processes.
Enforcement Will Be Multi-Layered:
- Licensing authorities may refuse to register or amend company records without proper BO disclosure.
- Banks may deny account openings or flag accounts where BO information is missing or unclear.
- Tax authorities may consider non-disclosure a red flag for fraud or evasion.
- Police or security agencies may investigate ownership structures involving foreign entities in sensitive sectors.
Risk of Non-Compliance:
- Administrative fines
- Delays or rejection in investment licensing
- Denial of work permits or legal representative changes
- Freezing of bank accounts or refusal to release capital
- Loss of reputation with business partners and regulators
In time, it is expected that beneficial ownership records will be integrated into Vietnam’s national business registry system. Auditors, financial institutions, and even foreign tax authorities may rely on this data.
What Foreign Investors Must Do Immediately
Even though some technical details on beneficial ownership regulations are still pending, foreign investors should not wait for the decree before acting. The legal requirement on beneficial ownership regulations to identify beneficial owners is already in place, and early compliance is smart risk management.
Practical Steps You Should Take Now:
1. Map Your Ownership Chain
– Create a full ownership diagram from the foreign parent company down to the Vietnamese entity
– Highlight any “nominee” structures or indirect holding vehicles
2. Identify the Natural Persons Behind the Company
– Look for anyone with significant shareholding, profit rights, or decision-making influence
– Use the 25% standard as a conservative threshold
3. Collect and Document Key Information
– Full name, nationality, and legal ID (passport or national ID)
– Permanent address and contact information
– Legal basis for ownership or control
4. Update Internal Records
– Maintain a separate Beneficial Owner file within your company registry
– Review and update it annually or after any major transaction
5. Engage Legal and Tax Advisors
– Review shareholder agreements, capital contributions, and trustee arrangements
– Ensure BO disclosure aligns with cross-border reporting obligations
6. Monitor for Updates
– Watch for the upcoming implementing Decrees
– Update your compliance program once the final rules are issued
Transparency Is Not Optional Anymore
Beneficial ownership regulations in Vietnam mark a new era in legal compliance and corporate accountability. This is not a temporary trend. It is part of a permanent shift toward transparent, ethical business practice, both within Vietnam and globally.
Foreign investors should welcome this clarity on beneficial ownership regulations. It levels the playing field. It removes unfair advantages held by anonymous operators. And most importantly, it builds trust between investors, partners, and the Vietnamese state.
Acting now is essential. So you are suggested not to wait for the government to tell you exactly how to comply with beneficial ownership regulations. Prepare yourself based on best practices. Get ahead of the curve. And build your business in Vietnam on a legal foundation that earns trust, at home and abroad.
What Is the Difference Between BO and UBO, and Why It Matters in Vietnam
When discussing beneficial ownership, two terms often appear: Beneficial Owner (BO) and Ultimate Beneficial Owner (UBO). While sometimes used interchangeably in everyday conversation, they carry important legal and compliance distinctions, especially as Vietnam moves to align its laws with international standards.
Beneficial Owner (BO)
A beneficial owner is any natural person who, directly or indirectly, owns, controls, or benefits from a company or legal entity, even if they are not officially listed in corporate registration documents.
In Vietnam’s 2025 amended Law on Enterprises, this term is legally introduced as beneficial owner (BO). The law now requires companies to collect, store, and provide this information upon request to comply with beneficial ownership regulations.
Ultimate Beneficial Owner (UBO)
An ultimate beneficial owner is the final natural person at the end of a chain of ownership or control. In other words, the UBO is not a company, trust, or nominee, but the real human who ultimately owns or controls the legal entity, regardless of how many layers of entities or intermediaries exist in between.
What Vietnam Law Covers:
- Although the term used in Vietnam’s law is beneficial owner (BO), both the intent of the law and upcoming regulations are expected to focus on identifying the UBO, in line with FATF Recommendation
- This aligns Vietnam with international best practices where regulators, banks, and enforcement bodies look through corporate chains to find the real natural person in control
Why This Distinction Matters:
- When reporting to Vietnamese authorities or banks, you should be ready to disclose the UBO, not just the BO at the first layer
- Corporate structures designed to obscure UBOs will likely trigger delays, refusals, or investigation
- Using both terms correctly in legal filings and compliance policies shows you understand and respect Vietnam’s evolving transparency framework
Frequently Asked Questions (FAQ)
1. Does the new law on beneficial ownership regulations apply to foreign investors?
Yes. All companies in Vietnam, including foreign-invested enterprises, must comply with the beneficial ownership regulations.
2. Is the 25% threshold officially required for beneficial ownership regulations in Vietnam?
Not yet. The 25% figure is widely used globally and expected to be adopted in future regulations, but the current law does not set a specific number.
3. Can I use a nominee to help go around the law that restrict ownership and comply with beneficial ownership regulations?
Nominee structures to go around the law seems not to be efficient any longer. The law requires disclosure of the actual person who owns or benefits from the business to comply with beneficial ownership regulations in Vietnam.
4. When will the Decree on beneficial ownership regulations in Vietnam with details be released?
Typically, implementing Decrees follow 3 to 6 months after a new law is passed. Watch for updates.
5. What if I fail to disclose my beneficial owner?
You may face fines, delays in licensing, refusal of bank services, or investigation by regulators.
Step-by-Step Summary Checklist for Foreign Investors to Comply with Beneficial Ownership Regulations
Draw your full corporate ownership map
Use the 25% rule as a working standard
Identify and document your beneficial owners
File disclosures proactively if required by licensing authorities
Prepare internal systems for record-keeping and annual updates
Consult with lawyers in Vietnam and stay alert for new guidance from the government
About ANT Lawyers, a Law Firm in Vietnam
We help clients overcome cultural barriers and achieve their strategic and financial outcomes, while ensuring the best interest rate protection, risk mitigation and regulatory compliance. ANT lawyers has lawyers in Ho Chi Minh city, Hanoi, and Danang, and will help customers in doing business in Vietnam.
Source: https://antlawyers.vn/bo/beneficial-ownership-regulations-truths.html
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