BENEFICIAL OWNERSHIP

BENEFICIAL OWNERSHIP IN VIETNAM: IDENTIFICATION CRITERIA AND DECLARATION OBLIGATIONS UNDER THE LATEST REGULATIONS

1. Overview of Beneficial Ownership

A Beneficial Owner (BO) is an individual who ultimately directly or indirectly owns or exercises control over an enterprise in practice.

The identification of beneficial owners aims to enhance transparency in corporate ownership structures and control arrangements, support state management and anti-money laundering efforts, and prevent the use of intermediary legal entities to conceal the identity of the ultimate beneficial owners.

For foreign-invested enterprises (FDIs), particularly those with multi-layer ownership structures involving overseas parent companies, intermediate holding companies or multinational groups, identifying the correct beneficial owners requires a comprehensive review of the entire ownership structure and actual control arrangements.

2. Criteria for Identifying Beneficial Owners

Pursuant to Article 17 of Decree No. 168/2025/ND-CP, as amended and supplemented by Article 3 of Decree No. 296/2026/ND-CP, beneficial owners are identified based on the following criteria:

Criterion 1: Individuals directly or indirectly owning 25% or more of the enterprise

An individual who directly or indirectly, or through a combination of direct and indirect ownership, holds 25% or more of the charter capital or 25% or more of the total voting shares of an enterprise is identified as a beneficial owner.

For indirect ownership, an individual is identified as a beneficial owner if they hold 25% or more of the charter capital or total voting shares of the enterprise through other organizations or legal arrangements.

In addition, where a group of individuals having family relationships as prescribed under the Law on Enterprises, or individuals having an agreement to jointly hold 25% or more of the enterprise's charter capital or voting shares, the enterprise must consider identifying the relevant individuals as beneficial owners.

For partnerships, all general partners are identified as beneficial owners, regardless of their capital contribution ratios or voting rights.

Criterion 2: Individuals exercising actual control over the enterprise

Where no individual meets Criterion 1, or there are grounds to believe that an individual identified under Criterion 1 is not the actual beneficial owner, the enterprise must identify individuals who exercise control through other means, whether legally or in practice.

Control may be exercised through one or more of the following rights:

• The right to appoint, dismiss or remove the majority or all members or the Chairperson of the Board of Directors or Members' Council;
• The right to appoint, dismiss or remove the Director or General Director;
• The right to amend or supplement the company's Charter;
• The right to determine changes to the organizational structure;
• The right to make decisions regarding the enterprise's financial policies, investments and business operations;
• The right to decide on the reorganization or dissolution of the enterprise.

For FDIs with multi-layer ownership structures, enterprises should review the ownership and control arrangements at the parent company, intermediate holding companies and other relevant entities to identify the individual who ultimately exercises control over the Vietnamese subsidiary.

Criterion 3: The individual holding the highest managerial authority in the enterprise

Where no individual meets Criterion 1 or Criterion 2, the enterprise shall identify one individual who holds the highest managerial authority and acts on behalf of the enterprise.

Important note: This criterion does not automatically mean that the legal representative or an authorized representative of the owner must be identified as the beneficial owner. The enterprise must consider the individual's position, authority and actual powers within the management structure.

In addition, individuals representing state capital contributions in an enterprise are excluded from being identified under this criterion.

3. Illustrative Example for a Foreign-Invested Enterprise

Assume that Company A in Vietnam has the following ownership structure:

• Company B in Korea owns 100% of Company A's charter capital.
• Company C in Korea owns 100% of Company B's charter capital.
• Mr. X is an individual who owns 60% of Company C's charter capital.

In this case, Mr. X indirectly owns 60% of Company A through Company C and Company B.

Therefore, Mr. X meets the criterion of indirectly owning 25% or more of the enterprise and is identified as the beneficial owner of Company A.

Where no individual meets the ownership threshold, the enterprise must continue reviewing the actual control arrangements under Criterion 2. If no individual exercising control can be identified, the enterprise shall apply Criterion 3 to identify the individual holding the highest managerial authority.

4. Obligations to Declare and Notify Beneficial Ownership Information

Pursuant to Article 18 of Decree No. 168/2025/ND-CP, as amended and supplemented by Article 4 of Decree No. 296/2026/ND-CP, enterprises are responsible for:

• Identifying beneficial owners in accordance with the criteria stipulated in Article 17.
• Reviewing each level of the ownership structure until the individuals who ultimately own or exercise control over the enterprise can be identified.
• Declaring and notifying beneficial ownership information to the Business Registration Authority in accordance with applicable regulations.
• Declaring, maintaining and updating beneficial ownership information as required by law.

Enterprises should note that the identification of beneficial owners must not be based solely on the list of direct shareholders or capital-contributing members in Vietnam. The ownership structure and control arrangements at intermediate levels must also be reviewed, where applicable.

5. Enterprises Subject to Beneficial Ownership Declaration and Applicable Filing Deadlines

Pursuant to Clause 1, Article 3 of Law No. 76/2025/QH15, transitional provisions regarding the supplementation of beneficial ownership information apply as follows:

5.1. Enterprises established before 1 July 2025

For enterprises established before 1 July 2025, the supplementation of beneficial ownership information (if any) and information used to identify beneficial owners (if any) shall be carried out concurrently when the enterprise submits its latest application for changes to enterprise registration information or notification of changes to enterprise registration information, unless the enterprise requests to supplement such information earlier.

Accordingly, enterprises established before 1 July 2025 should review their status and pay attention to the following cases:

• Case 1: From 1 July 2025 to the present, the enterprise has completed procedures for changes to enterprise registration information or notifications of such changes but has not yet declared its beneficial ownership information. The enterprise should review its records and proactively complete the outstanding notification procedures.
• Case 2: The enterprise has not carried out any procedures for changes to enterprise registration information or notifications of such changes since 1 July 2025 and has not yet declared its beneficial ownership information. The enterprise may supplement such information concurrently with its next application or notification for changes to enterprise registration information. Alternatively, the enterprise may proactively request to supplement the information earlier, without waiting for the next change to its enterprise registration information.

5.2. Enterprises established on or after 1 July 2025

For enterprises established on or after 1 July 2025, beneficial ownership information must be declared at the time of enterprise establishment registration, in accordance with applicable regulations.

Therefore, newly established enterprises that have not yet declared or notified their beneficial ownership information should review their enterprise registration records and complete the supplementary declaration procedures in accordance with current regulations.

5.3. Enterprises that have already declared beneficial ownership information

For enterprises that have already declared their beneficial ownership information and have not experienced any changes to the previously declared information, they are not required to resubmit the declaration solely because the beneficial ownership identification criteria have been amended and supplemented under Decree No. 296/2026/ND-CP.

Where there are changes to the declared beneficial ownership information or ownership percentages, the enterprise must notify the relevant changes in accordance with Clause 1, Article 52 of Decree No. 168/2025/ND-CP.

Enterprises that have already submitted their beneficial ownership declarations and have not experienced any changes to the declared information are not required to resubmit the declaration solely because the identification criteria have been amended.

6. Recommendations for Enterprises

To ensure compliance with applicable legal requirements, enterprises are recommended to take the following actions:

1. Review the entire ownership structure, including both direct and indirect ownership.
2. Determine the ownership percentages of individuals through each level of parent companies and intermediate holding companies.
3. Review the company's Charter, shareholders' agreements and authorization documents to identify individuals exercising actual control.
4. Identify beneficial owners in accordance with the prescribed criteria and order of priority.
5. Review the enterprise registration history to determine whether the enterprise has already declared its beneficial ownership information.
6. Prepare the relevant information and documents and complete the declaration and notification procedures with the Business Registration Authority in accordance with current regulations.