Responsibility for declaration of beneficial owners of enterprises 

The amended Law on Enterprise 2025, effective from July 1, 2025, for the first time recognizes and specifically provides for the responsibilities of the enterprise founders and enterprises in identifying and disclosing information on Beneficial Owners (“BO”). This concept has long been a familiar element in international standards on corporate transparency and anti-money laundering mechanisms. The inclusion of this content in Vietnamese law marks a significant step forward, contributing to strengthening publicity and clarity in corporate activities and enhancing the effectiveness of anti-money laundering controls. 

1. Concept of Beneficial Owner:

According to Clause 35, Article 4 of the amended Law on Enterprise 2025, a Beneficial Owner of an enterprise is an individual who in fact holds ownership of the charter capital or has controlling rights over that enterprise. This does not only refer to individuals recorded in legal documents but also includes those who actually enjoy the economic benefits from the enterprise’s activities and/or have the power to influence key decisions, regardless of whether they are formally registered in the legal records. A Beneficial Owner may conceal themselves behind intermediary legal entities, cross-ownership structures, authorization contracts, shareholder agreements, or other civil transactions. They may be the person who directs operations, makes strategic decisions, or controls financial flows without necessarily holding charter capital directly or occupying a managerial position. 

2. Identification of Beneficial Owner:

According to Article 17 of Decree No. 168/2025/NĐ-CP, an individual shall be considered a Beneficial Owner if he/she falls under one of the following cases: 

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. 

Example: Mr. A holds 30% of the shares in Joint Stock Company X, as clearly recorded in the Share Registration Certificate and the Shareholders’ Register of Joint Stock Company X. Mr. A is identified as a Direct Beneficial Owner. 

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. 

Example: Ms. B owns 60% of Company X, and Company X holds 50% of the shares in Company Y. Accordingly, Ms. B indirectly holds 30% of the shares in Company Y (60% x 50% = 30%). Ms. B is identified as an Indirect Beneficial Owner of Company Y. 

c. An individual who has the right to control the ratification of decisions on at least one of the following matters: appointment, dismissal, or removal of the majority or all of the members of the Board of Directors, the Chairperson of the Board of Directors, or the Chairperson of the Board of Members; the legal representative, Director or General Director of the enterprise; amendments and supplements to the enterprise’s charter; changes in the organizational structure of the company; reorganization or dissolution of the company. 

Currently, enterprise law has not provided detailed guidance on what constitutes “the right to control.” However, from a legal perspective, such rights may be identified based on documents such as shareholder agreements, member agreements, company charters, or loan contracts accompanied by control rights. These documents may contain provisions granting a particular individual actual decision-making authority, even though that individual is not formally recorded in the enterprise’s legal documents. 

3. Beneficial owners subject to declaration:

Not all beneficial owners are required to be declared by an enterprise. According to Article 18 of Decree No. 168/2025/ND-CP, an enterprise is only obliged to declare beneficial owners falling into the following categories: 

a) Direct beneficial owners (as referred to in Section 2.a above):

• Individuals who are shareholders holding at least 25% of total voting shares; 

• Individuals who are partners/members holding at least 25% of the charter capital of a partnership or a multi-member limited liability company; 

• Individuals who are the owner of a single-member limited liability company. 

b) Individuals having the right to control (as referred to in Section 2.c above).

c) Shareholders being organizations holding at least 25% of the total voting shares. 

It is noteworthy that indirect beneficial owners (as referred to in Section 2.b above) are not subject to mandatory declaration of beneficial ownership information under the law. 

4. Time for declaration of beneficial owners:

a) The founder of an enterprise shall declare information on the enterprise’s beneficial owners at the time of enterprise establishment with the business registration authority. 

b) For enterprises established prior to the effective date of the 2025 Amended Law on Enterprises, information on beneficial owners shall be supplemented concurrently with the time of notification or registration of any changes in enterprise registration, unless the enterprise requests to provide such information earlier. 

5. Retention of information on beneficial owners:

Enterprises shall retain the list of declared beneficial owners, which has been notified to the provincial-level business registration authority, in the form of either paper documents or electronic records. 

The identification and declaration of beneficial owners is a new legal requirement introduced by the 2025 Amended Law on Enterprises. Enterprises are therefore required to carefully review their ownership structures, internal agreements, and governance mechanisms in order to ensure full compliance with the prevailing legal provisions. 

Date Written: 20/07/2025

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