The term “beneficial owner” is no longer unfamiliar to enterprises, as it has been explicitly defined under the Law on Anti-Money Laundering 2022. However, prior to the adoption of this law, there were no mandatory requirements for enterprises to declare beneficial ownership, nor were there any official guidelines regarding the forms, methods of identification, or procedures for such declaration. These regulatory gaps have, to some extent, placed Vietnam’s financial system in a grey area due to a lack of transparency in financial matters, raising concerns among certain investors regarding the safety and integrity of the investment environment. In response to these concerns, from July 1, 2025, the amended Enterprises Law introduces a mandatory requirement for all enterprises to declare their beneficial owners, including foreign-invested enterprises conducting business in Vietnam. The following article will provide comprehensive information that investors and foreign enterprises need to know about beneficial ownership.
For FDI enterprises – which often have multi-layered ownership structures involving multiple intermediary legal entities and foreign investors – the accurate identification of the beneficial owner is no longer optional but a mandatory obligation. Failure to comply fully and in a timely manner may expose the enterprise to legal risks, administrative sanctions, and serious impacts on its reputation in the eyes of investors, regulatory authorities, and financial partners. In this context, the following article by CDLAF will provide further clarification on beneficial ownership and the actions that enterprises must take.
1. Declaring beneficial owners based on the capital structure of foreign-invested enterprises
Combating transfer pricing and base erosion has consistently been a pressing issue, not only for the Vietnamese Government but also as one of the criteria used by international organizations to assess the transparency of Vietnam’s financial market. As a result, new regulations have imposed mandatory obligations on foreign enterprises conducting business in Vietnam.
One prominent characteristic of foreign-invested enterprises is their multi-tiered capital ownership structure, particularly in multinational companies, companies established through investment funds, or those present in Vietnam through nominee agreements established in a third country — where nominee relationships or outsourced capital ownership are legally recognized. Under the previous regulations, the layering of such ownership structures was only reflected in enterprise records. Under the new provisions, however, enterprises must rely on this structure to accurately identify which individual investor is the beneficial owner, and this information must be submitted and retained at the company.
Therefore, for FDI enterprises, the declaration of beneficial owners must take into account the capital structure of the foreign investors. The assessment must be based on the legal documents of the investors as established in their country of origin. It should be noted that this applies to foreign institutional investors operating in Vietnam. In the case of individual investors, the individual is deemed the beneficial owner, unless that individual is engaged in a capital ownership agreement with another individual or organization.
2. What is the legal framework governing beneficial ownership in foreign-invested enterprises in Vietnam?
Regulations on beneficial ownership, as mentioned above, are provided under the Anti-Money Laundering Law 2022. However, these regulations currently focus on specific entities engaging in particular types of transactions and do not impose a declaration obligation on all enterprises. Accordingly, the Anti-Money Laundering Law sets out obligations to collect, verify, update, and retain information on beneficial owners during the course of operations by enterprises involved in financial and banking transactions. This also reflects Vietnam’s commitment to international financial standards.
From July 1, 2025, the amended Enterprises Law officially introduces a mandatory requirement for all enterprises to declare their beneficial owners, with the timing of the declaration depending on each specific case. The law provides that:“Beneficial owner of an enterprise having juridical person status (hereinafter referred to as “beneficial owner”) means an individual who has actual ownership of charter capital of or has controlling interest in that enterprise, except a direct representative of owner in a wholly state-owned enterprise or a representative for the State’s portion of capital at a joint-stock company or a multi-member limited liability company in accordance with regulations of law on management and use of state capital in enterprises.”
What are the criteria for determining the beneficial owner of an enterprise? To determine which individual is the beneficial owner, the FDI enterprise must rely on criteria related to capital ownership and the right to control decisions of that enterprise, specifically:
- An individual who directly or indirectly owns 25% of the charter capital or 25% of the total voting shares or more of the enterprise;
- An individual who has the right to control the decision-making over 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; the legal representative, Director or General Director of the enterprise; amendment or supplementation of the charter of the enterprise; change of the organizational management structure of the company; reorganization or dissolution of the company;
- An individual who indirectly owns as stipulated at point a of this Clause 1 is an individual who owns 25% of the charter capital or 25% of the total voting shares or more of the enterprise through another organization.
Thus, the person who establishes the enterprise, the enterprise itself shall declare and notify the Business Registration Authority of information on the beneficial owner of the enterprise as follows: An individual who is a shareholder owning 25% or more of the total voting shares; an individual who is a member owning 25% or more of the charter capital in a partnership or a multi-member limited liability company; an individual who is the owner of a single-member limited liability company. At the same time, the enterprise shall retain the list of beneficial owners of the enterprise as declared and notified to the provincial-level Business Registration Authority in accordance with regulations, in the form of either hard copy or electronic document.
3. Guidelines for identifying the beneficial owner in the capital structure of an FDI enterprise
As previously mentioned, due to the multi-layered structure and the involvement of foreign legal systems, the identification of the beneficial owner is not as straightforward as in Vietnamese enterprises. Accordingly, the enterprise must:
- Collect all legal documents related to all intermediary legal entities in the investment chain, such as: business licenses, charters, appointment decisions, shareholder agreements, or any other documents in accordance with foreign law;
- Trace back the original ownership chain from the investor’s base in Vietnam in order to identify the actual owner and thereby determine which individual is the beneficial owner;
- Determine the actual controlling rights, as in some cases individuals manage or own capital based on agreements established in countries whose legal systems recognize nominee arrangements.
The identification and disclosure of information regarding the beneficial owner is not only a legal obligation but also a matter of strategic governance for each FDI enterprise. Enterprises must be fully aware of their role in compliance: accurately and fully declaring information on the beneficial owner from the time of establishment and throughout the course of operations. Regularly updating such information in case of any changes in ownership structure, share transfers, changes to intermediary legal entities, or actual governance structure.
Time of writing: 28/07/2025
The article contains general information which is of reference value, in case you want to receive legal opinions on issues you need clarification on, please get in touch with our Lawyer at info@cdlaf.vn
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You can refer for more information:
- Who is the Beneficial Owner? – Legal Perspective from the Latest Regulations of Vietnamese Enterprise Law
- Latest social insurance obligations for foreign enterprises in Vietnam in 2025
- Deduction of input VAT under Decree 181/2025/NĐ-CP: What are the considerations for enterprises?
- 0% VAT Rate under Decree No. 181/2025: What Conditions Must Enterprises Satisfy?
