BENEFICIAL OWNERS: LATEST REGULATIONS IN 2026

In business operations, the individuals who ultimately benefit from or exercise control over an enterprise are not always clearly identified on its Enterprise Registration Certificate or through its business activities. Behind a multi-layered ownership structure involving shareholders and capital-contributing members may lie individuals who, in practice, own or control the enterprise. To enhance transparency in business operations and support efforts to combat money laundering, Vietnamese law has introduced regulations on the beneficial ownership of enterprises. In particular, the legal changes introduced in 2026 require enterprises to proactively stay informed of the latest regulations, properly understand the criteria for identifying beneficial owners, and fulfill their obligations to declare relevant information in accordance with applicable laws. Let us explore the key points below.

What Is a Beneficial Owner of an Enterprise?

Clause 35, Article 4 of the Law on Enterprises 2020, Law No. 59/2020/QH14, as amended through 2025, provides that a “beneficial owner of an enterprise with legal personality” (hereinafter referred to as the enterprise’s beneficial owner) is an individual who actually owns the charter capital or exercises control over the enterprise, except for a person representing the direct owner of an enterprise in which the State holds 100% of the charter capital and a representative of state capital in a joint-stock company or a limited liability company with two or more members, as prescribed by the law on the management and investment of state capital in enterprises. In addition, Article 17 of Decree No. 168/2025/ND-CP, as amended and supplemented by Decree No. 296/2026/ND-CP, further specifies that a beneficial owner of an enterprise with legal personality is one or more individuals who ultimately, directly or indirectly, own or exercise actual control over that enterprise, excluding individuals representing state capital in the enterprise. In general, an enterprise’s beneficial owner is a person who benefits from the enterprise and has the following characteristics:

First, beneficial-owner status applies only to enterprises with legal personality, including partnerships, limited liability companies, and joint-stock companies.

Second, a beneficial owner is an individual or a group of individuals. An organization may directly own capital contributions or shares in an enterprise, but the organization itself is not a beneficial owner under the definition above. The ownership structure must therefore be examined further to identify the ultimate individual who owns or controls the enterprise.

Third, a beneficial owner must ultimately own or exercise actual control over the enterprise, either directly or indirectly. This rule is intended to identify individuals who exercise effective power within an enterprise, thereby enhancing transparency in business activities and supporting efforts to prevent money laundering, tax evasion, and the legitimization of illicit assets.

Fourth, individuals representing state capital in an enterprise are excluded from beneficial-owner status. Specifically, this exclusion covers the person representing the direct owner of an enterprise in which the State holds 100% of the charter capital, and a representative of state capital in a joint-stock company or a limited liability company with two or more members, in accordance with the law on the management and investment of state capital in enterprises.

How to Identify a Beneficial Owner Under the Law

(1) The Criterion of Individual Ownership of Charter Capital or Shares

Decree No. 168/2025/ND-CP, as amended and supplemented by Decree No. 296/2026/ND-CP, clarifies the priority order for identifying beneficial owners. The enterprise first identifies individuals who own charter capital or capital contributions; it then considers individuals who exercise actual control. If neither of these approaches applies, the enterprise uses the criterion of the individual holding the highest level of authority within the enterprise. The first criterion is commonly used by enterprises when making declarations and is relatively straightforward to apply compared with the other criteria.

Under Article 3 of Decree No. 296/2026/ND-CP, an individual meets this criterion if they “directly or indirectly, or both directly and indirectly, own at least 25% of the charter capital or at least 25% of the total voting shares of the enterprise.” Compared with the previous rules, the new provision clarifies cases in which an individual holds both direct and indirect ownership, provided that the combined ownership percentage reaches at least 25%. The Decree also clarifies that indirect ownership means holding charter capital or voting shares through an organization or another legal arrangement. For example, Ms. A owns 60% of the capital in Company X, while Company X owns 50% of the voting shares in Company Y. Ms. A’s indirect ownership in Company Y is calculated as 60% × 50% = 30%. Therefore, Ms. A meets the 25% threshold for indirect ownership in Company Y and may be identified as a beneficial owner under this criterion.

In addition, Clause 1, Article 17 of Decree No. 168/2025/ND-CP, as amended and supplemented by Decree No. 296/2026/ND-CP, provides as follows:

“Where a group of individuals who are related by family, as defined in Clause 22, Article 4 of the Law on Enterprises, or who jointly own, under a contract, directly or indirectly, or both directly and indirectly, at least 25% of the charter capital or at least 25% of the total voting shares of an enterprise, the enterprise shall identify the individuals in that group as its beneficial owners.”

A group of individuals who are related by family or who jointly own an enterprise under a contract may therefore be identified as beneficial owners if their combined ownership meets the percentage threshold prescribed by law. This approach helps identify more comprehensively individuals who may coordinate or jointly influence ownership, voting rights, and control of the enterprise.

The provision also expressly states: “For a partnership, all general partners are beneficial owners of the enterprise, regardless of their capital-contribution ratio or voting rights in the enterprise.” This is consistent with the nature of a partnership as a person-based business entity: its general partners are closely associated and undertake to bear liability for the partnership’s obligations with all of their assets (Clause 1, Article 177 of the Law on Enterprises 2020, Law No. 59/2020/QH14).

(2) The Criterion of an Individual’s Actual Control

Compared with the previous rules, the current regulations clarify the priority for identifying beneficial owners. They provide that “where an individual does not satisfy the criterion specified in Clause 1 of this Article, or there are grounds to believe that an individual identified under that criterion is not the enterprise’s beneficial owner, the enterprise shall identify its beneficial owner by other means provided for by law or established in practice” (Clause 2, Article 17 of Decree No. 168/2025/ND-CP, as amended and supplemented by Decree No. 296/2026/ND-CP). Accordingly, an enterprise should determine beneficial ownership based on an individual’s control over the company’s internal operations only when beneficial-owner status cannot be established by calculating ownership of charter capital or voting shares, or when there are grounds to conclude that the individual identified through that calculation is not in fact a beneficial owner.

The rights regarded under the current regulations as conferring significant influence over a company also differ in certain respects from those under the previous rules. They include the right to appoint, dismiss, or remove a majority or all of the members or the chairperson of the Board of Directors; a majority or all of the members or the chairperson of the Members’ Council; the Director or General Director; to amend or supplement the enterprise’s charter; to change its organizational structure; to decide on its financial, investment, and operational policies; and to reorganize or dissolve the enterprise. Decree No. 296/2026/ND-CP has broadened the scope of these rights, including rights relating to the enterprise’s financial, investment, and operational policies, as well as the right to appoint, dismiss, or remove a majority or all members of a limited liability company, among other matters.

(3) The Criterion of the Individual Holding the Highest Level of Authority within the Enterprise

If no individual can be identified under the ownership-percentage or actual-control criteria, the enterprise must identify the manager with the highest level of authority to act on its behalf, except for individuals representing state capital who are excluded under the applicable rules. Under Clause 3, Article 17 of Decree No. 168/2025/ND-CP, as amended and supplemented by Decree No. 296/2026/ND-CP, this criterion applies when the beneficial owner cannot be identified under the preceding criteria. The rule provides enterprises with a basis for identifying and declaring information according to a prescribed order of priority, while also requiring them to review and determine the relevant information.

Enterprises’ Obligations to Declare Beneficial Ownership Information

The founders of an enterprise and the enterprise itself are responsible for submitting the list of beneficial owners to the Business Registration Authority (Clause 1, Article 18 of Decree No. 168/2025/ND-CP, as amended and supplemented by Decree No. 296/2026/ND-CP). They must identify the enterprise’s beneficial owners by reviewing each level of the ownership structure until they identify the individual who ultimately owns or exercises actual control over the enterprise. Where the ownership structure includes a legal arrangement governed by the law on anti-money laundering, the beneficial owner of that legal arrangement must be identified in accordance with the anti-money-laundering laws.

Declarations must also follow the priority order of the criteria for identifying beneficial owners. According to this article, the declaration form is Form No. 10 issued together with Circular No. 121/2026/TT-BTC. Form No. 11, which previously included information on organizational shareholders owning at least 25% of the total voting shares in the list used to identify beneficial owners, has been abolished. These changes are intended to simplify declaration procedures and make compliance more convenient for enterprises and their founders.

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