Issue of July, 2025 – Beneficial owner under Law on amendments to Law on enterprises

Dear Valued Clients,

On June 17, 2025, the National Assembly officially passed Law No. 76/2025/QH15 amending and supplementing several articles of the Law on Enterprises 2020 (hereinafter referred to as the “2025 Amended Law on Enterprises”). At the same time, Decree No. 168/2025/ND-CP, detailing enterprise registration procedures (the “Decree 168”), was also promulgated. Both instruments took effect on July 1, 2025. One of the most notable updates introduced under this amendment is the recognition and clarification of the concept of the “beneficial owner”—a provision that significantly impacts corporate governance, transparency, and regulatory compliance, especially in the context of enhanced anti-money laundering efforts and prevention of conflicts of interest.

In this Legal Update, we will focus on clarifying key provisions relating to the concept of beneficial ownership, along with the methods and practical considerations for identifying beneficial owners.

1. Definition of Beneficial Owner

The definition of “beneficial owner” (BO) is not entirely new in the Vietnamese legal system. Previously, the Law on Anti-Money Laundering No. 14/2022/QH15 dated November 15, 2022, referred to the BO as “an individual who ultimately owns one or more assets, has control over a customer in carrying out transactions involving such assets on their behalf; or an individual who has control over a legal entity or legal arrangement.” However, the major limitation of that earlier provision was the absence of a mandatory requirement for enterprises to publicly disclose or declare information on beneficial owners. This legal gap led to a common practice where individuals exercising actual control over a company did not appear on any official legal documentation—often concealed through intermediary ownership structures or complex corporate arrangements. As a result, it became difficult for regulatory authorities to detect and address manipulative conduct or serious violations relating to corporate governance and economic management.

To address this issue, the 2025 Amended Law on Enterprises introduces a mandatory obligation for companies to identify and declare their beneficial owners. It also clarifies the legal definition of a beneficial owner, specifically: “The beneficial owner of an enterprise with legal person status (hereinafter referred to as the ‘beneficial owner of the enterprise’) is an individual who ultimately holds ownership of the charter capital or exercises control over that enterprise, except in the case of the official representative of the State as the owner in enterprises with 100% State-owned capital, or the representative of State capital in joint stock companies or limited liability companies with two or more members, as regulated by the law on management and investment of State capital in enterprises.”

2. Criteria for specifying beneficial owner

According to Article 17 of Decree 168 on enterprise registration, an individual shall be deemed a Beneficial Owner (BO) if they satisfy any of the following conditions:

(i) The individual directly or indirectly owns 25% or more of the charter capital or 25% or more of the total voting shares of the enterprise;

(ii) The individual has the power to control decisions on at least one of the following matters:

• Appointment, dismissal, or removal of the majority or all members of the Board of Directors, Chairperson of the Board of Directors, Chairperson of the Members’ Council, legal representative, Director or General Director of the enterprise;

• Amendment or supplementation of the enterprise’s charter;

• Changes to the organizational and managerial structure of the company;

• Reorganization or dissolution of the company.

3. Timing for Declaration, Notification, and Retention of Beneficial Ownership (BO) Information and Information for Identifying BOs

As of 01 July 2025, when the amended Law on Enterprises 2025 officially takes effect, the obligations of enterprises to ensure transparency regarding beneficial ownership (BO) information are more clearly and strictly regulated than ever before. Accordingly, the declaration, notification, and retention of information related to BOs are not only mandatory legal requirements but also essential governance tools to enhance transparency and prevent legal risks, especially in the area of anti-money laundering.

3.1. Enterprises established before 01/7/2025

Enterprises that were established before 01 July 2025 are responsible for declaring, supplementing, and notifying BO information and information for identifying BOs of the enterprise as follows:

(i) The enterprise shall supplement BO information and information for identifying BOs at the same time as the most recent procedure for enterprise registration changes or notification of changes after 01 July 2025 .
Example: If the enterprise changes its legal representative on 10 July 2025, it must concurrently declare the BO information of the enterprise.

(ii) In case the enterprise wishes to supplement the BO information earlier, it may carry out a separate procedure for supplementing BO information or information for identifying BOs even when there is no change in other enterprise registration content..

(iii) In case the enterprise notifies changes in BO information/information for identifying BOs during its operation, specifically:

• The enterprise must notify the changes in BO information and information for identifying BOs concurrently with the procedure for registration of changes or notification of changes in enterprise registration content.

• If the enterprise only changes BO information and not any other registered content, it may choose to either: Carry out a separate procedure for notification and supplementation of BO information; or Implement the notification concurrently with the next closest enterprise registration change.

3.2. Enterprises established after 01/7/2025

For enterprises registered from 01 July 2025 onwards, the declaration and management of BO information is compulsory at the time of enterprise registration.

If the enterprise notifies changes in BO information or information for identifying BOs during its operation, the procedure is as follows:

• The enterprise must notify the change concurrently with the procedure for registration of changes or notification of changes in enterprise registration content.

• If the enterprise only changes the BO information and does not change any other registered content, it may choose to: Carry out a separate procedure for notifying and supplementing BO information; or Conduct the notification concurrently with the next closest enterprise registration change.

As always, we hope you find this article useful and we look forward to the opportunity of working with you in the near future.

Sincerely,

ENT LAW LLC

The full version of this Legal Update can be found here.

——————————————————

[1] Article 1.1(d) Law on amendments to Law on Enterprises.

[2] An individual indirectly owning 25% or more of the charter capital or 25% or more of the total voting shares of an enterprise is an individual owning 25% or more of the charter capital or 25% or more of the total voting shares of an enterprise through another organization.

[3] Article 3.1 Law on amendments to Law on Enterprises.