On June 17, 2025, the National Assembly passed the Law amending and supplementing a number of articles of the Enterprise Law. and effective from July 1, 2025. Accordingly, the amended and supplemented Law has introduced new regulations on the concept of the Beneficiary Owner of an enterprise, assigning the Government to provide specific guidance on criteria for identification and sanctions for violations when failing to provide information.
1. What is the benefit for the owner?
Pursuant to Article 4 Enterprise Law 2020 (amended and supplemented by point d, clause 1, Article 1) Law No. 76/2025/QH15), the definition of the beneficial owner of a business is defined as follows:
“35. The beneficial owner of a legally incorporated enterprise (hereinafter referred to as the beneficial owner of the enterprise) is an individual who actually owns the charter capital or has controlling power over that enterprise, except for the direct representative of the owner in an enterprise wholly owned by the State and the representative of the state capital in a joint-stock company or limited liability company with two or more members as prescribed by the law on the management and investment of state capital in enterprises.”
Thus, the beneficial owner of a business can be understood as the actual owner of the business's charter capital or the person behind the scenes who has the power to control the business's operations and important decisions, even if they are not required to be named on the business registration documents. Furthermore, this regulation does not apply to cases involving representatives of the State's capital in businesses where the State holds 100% of the charter capital, or representatives of the State's capital in joint-stock companies and limited liability companies with two or more members.
2. Criteria for determining the beneficial owners of businesses from July 1, 2025
Based on the provisions of Article 17 Decree 168 / 2025 / ND-CP Regarding business registration, the criteria for determining the beneficial owner of a business are established when an individual meets one of the following criteria:
- An individual who directly or indirectly owns (e.g., investing through another company) 25% or more of the charter capital or 25% or more of the total voting shares of a business.
Note: Indirect ownership occurs when an individual does not directly own a company but holds 25% or more of the target business through another company or organization.
- An individual has the right to influence the approval of at least one of the following matters: Appointing, dismissing, or removing the majority or all members of the board of directors, chairman of the board of directors, chairman of the board of members; legal representative, director, or general director of the enterprise; amending or supplementing the charter of the enterprise; changing the organizational structure of the company's management; reorganizing or dissolving the company.
- An individual who is an indirect owner, as defined in point a, clause 1 of this Article, is an individual who owns 25% or more of the charter capital or 25% or more of the total voting shares of an enterprise through another organization.
Therefore, individuals who meet one of the above criteria will be considered beneficial owners of the business and will be listed in the information sheet on beneficial owners and information for identifying beneficial owners of the business.
3. The purpose of declaring the beneficial owners of a business.
On June 16, 2023, the Vietnamese government signed a commitment with the Financial Action Task Force (FATF) on combating money laundering, terrorist financing, and financing the proliferation of weapons of mass destruction, including 17 specific action items. However, Vietnam is currently on the FATF's "grey list." Without changes to the legal framework, including provisions regarding beneficial owners, the FATF may consider adding Vietnam to its "blacklist." This would negatively impact Vietnam's investment and business environment and economy.
The purpose of establishing regulations on collecting information on beneficial owners is to identify the individual who ultimately controls and dominates the investment and business activities of the enterprise.
The completion of these regulations will contribute to improving Vietnam's ranking in anti-money laundering and making the investment and business environment more transparent and healthy, attracting investors and helping to prevent and deter money laundering crimes.
These measures will directly impact the efficient functioning of the financial system and indirectly affect many aspects of the nation's economy, politics, and society. Therefore, establishing a mechanism for collecting, updating, and storing information on the beneficial owners of businesses is absolutely essential.