In the context of globalization and increasing demands for transparency in business operations, identifying the beneficial owner is no longer a matter of formality but has become a key legal factor in corporate governance, anti-money laundering, and conflict of interest prevention. In Vietnam, the concept of “beneficial owner” has been gradually and specifically stipulated in legal documents such as the Enterprises Law, the Anti-Money Laundering Law, and guiding decrees. According to the latest regulations in 2025, the declaration of the list of beneficial owners is now a mandatory requirement for enterprises.
However, many enterprises – and even experts – still have vague understandings of who the “beneficial owner” actually is, how to identify them in practice, and what legal obligations enterprises must comply with regarding the disclosure of this information.
The following article will clarify the concept of the beneficial owner from an updated legal perspective and analyze new points in the current regulations of Vietnamese enterprise law.
1. Definition of beneficial owner: Understanding from a legal perspective
The concept of beneficial owner has been stipulated in the Anti-Money Laundering Law 2022, whereby a beneficial owner is defined as “the natural person(s) who ultimately owns one or several asset(s), or controls a customer on whose behalf a transaction relating to asset(s). It also includes those persons who exercise control over a legal person or arrangement.” However, this legal document does not set out a mandatory requirement for enterprises to declare such information. This has led to situations where, in cases of violations in economic management involving economic manipulation by an individual or interest group standing behind enterprises, the individuals with decision-making powers are not those legal representatives recorded on the business license.
Therefore, the amended and supplemented Enterprises Law 2025 has set out provisions requiring enterprises to declare the list of individuals who are beneficial owners, and at the same time, has also provided a clearer definition of this concept, specifically: “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.”
Following the specification of the term “beneficial owner” in enterprise-related legal documents, the Government is expected to issue more detailed guiding regulations in the near future regarding the declaration process as well as sanctions for enterprises that fail to comply. This aims to create a transparent economic environment.
2. Criteria for identifying the beneficial owner under the new regulations
The identification of the beneficial owner of an enterprise having juridical person status (hereinafter referred to as the “beneficial owner”) is currently carried out based on both quantitative and qualitative criteria specifically stipulated by law. These criteria not only reflect the level of capital ownership but also emphasize the ability to actually control and influence the operations of the enterprise – a key factor in determining the true interest in the enterprise, beyond the formal legal structure.
An individual is considered a beneficial owner if one of the following conditions is satisfied:
- Holding a decisive ownership interest: That individual directly or indirectly owns 25% or more of the charter capital or 25% or more of the total voting shares of the enterprise. This is a common threshold under international law to determine whether an individual is capable of significantly influencing the company’s operations.
- Having the power to control strategic decisions of the enterprise: Even without holding a large ownership percentage, if an individual has the power to intervene in or decide on key governance matters of the enterprise, that person is still considered a beneficial owner. Specifically, this includes the power to: appoint, dismiss or remove most or all of the following positions: Members of the Board of Directors, Chairman of the Board; Chairman of the Members’ Council (for multi-member limited liability companies); Legal representative, Director or General Director; decide on amendments and supplements to the company’s charter; change the organizational management structure; reorganize or dissolve the enterprise. These are actions that demonstrate actual control, even without direct capital ownership.
- According to regulations, an individual is considered to have indirect ownership if they hold 25% or more of the charter capital or total voting shares through an intermediary organization. This means the individual is not directly named in the ownership structure of the enterprise but still controls a significant proportion through ownership of a related entity – such as a parent company, investment fund, or intermediary legal entity. This approach accurately reflects the practical nature of modern investment activities, where multi-layered, cross-border ownership chains may be used to obscure the identity of the ultimate controlling person – hence, identifying indirect ownership is an important factor in anti-money laundering and ensuring corporate transparency.
3. Responsibilities of enterprises in declaring beneficial owners
Article 21 of the Anti-Money Laundering Law stipulates the responsibility for transparency of legal entity information, in which information about beneficial owners is included. Specifically:
“Article 21. Transparency of Information Regarding Legal Persons
- The company registry, or the authority granting incorporating permits or licenses to legal persons, shall be required to update and keep or maintain basic information about a legal person, including name and category of the legal person in question, incorporation decision, permit or license relating to its business, its legal status, head office’s address, control or organization structure; list of directors or managers, company statutes; its beneficial owner(s) (if any). Such information shall be kept for at least five years after the date on which the legal person is dissolved or otherwise ceases to exist in accordance with law.
- The legal person shall be obligated to obtain, update, record and keep its basic information, including its name and category of business, incorporation decision, permit or license relating to business, legal status, head office’s address, control or organization structure; list of directors or managers, company statutes; its beneficial owner(s).
- When performing the regulatory functions and duties regarding AML, or conducting investigation, prosecution, trial or legal procedure, the State Bank of Vietnam and competent state authorities shall exercise their right to request entities, institutions and legal persons to provide information specified in clause 1 and 2 of this Article.”
However, the Anti-Money Laundering Law only applies to certain entities that conduct transactions in specific sectors, rather than applying to all enterprises. In this context, the “beneficial owner” is a mandatory element of transparency and serves as a crucial core. Therefore, under the amended and supplemented Enterprises Law 2025, the declaration of the list of beneficial owners becomes a compulsory requirement applicable to all enterprises without exception.
Accordingly, the person establishing the enterprise and the enterprise itself shall identify the beneficial owner of the enterprise and declare and notify the provincial business registration authority.
The person establishing the enterprise and the enterprise shall declare and notify the provincial business registration authority of information regarding shareholding organizations that own 25% or more of the total voting shares. Information of the shareholder organization includes: Name of the organization, enterprise code/establishment decision number, date of issuance, place of issuance, head office address, and the percentage of ownership of total voting shares.
The enterprise shall retain the List of Beneficial Owners as declared and notified to the provincial business registration authority, in paper or electronic form in accordance with regulations.
In summary, identifying the beneficial owner is not merely a legal technicality, but an essential part of the process of enhancing transparency, accountability, and mitigating legal risks in business operations. In the context of Vietnamese law increasingly aligning with international standards on corporate governance and anti-money laundering, enterprises can no longer overlook the importance of identifying and disclosing beneficial ownership information.
Understanding and properly fulfilling legal obligations related to beneficial ownership not only helps enterprises avoid legal sanctions but also lays a solid foundation for credibility and long-term sustainability in the eyes of partners, investors, and regulatory authorities. This is the time for enterprises to shift from a reactive mindset to a proactive compliance strategy, with the support of specialized legal experts to ensure both business efficiency and legal safety in the long term.
Time of writing: 04/07/2025
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
Why choose CDLAF’s service?
- We provide effective and comprehensive legal solutions that help you save money and maintain compliance in your business;
- We continue to monitor your legal matters even after the service is completed and update you when there are any changes in the Vietnamese legal system;
- Our system of forms and processes related to labor and personnel is continuously built and updated and will be provided as soon as the customer requests it;
- As a Vietnamese law firm, we have a thorough understanding of Vietnam’s legal regulations, and grasp the psychology of employees, employers, and working methods at competent authorities;
- CDLAF’s team of lawyers has many years of experience in the field of labor and enterprises, as well as human resources and financial advisory.
- Strict information security procedures throughout the service performance and even after the service is completed.
You can refer for more information:
