To enhance transparency in corporate ownership and control structures, current legislation has supplemented and clarified regulations on beneficial owners of enterprises. The latest changes focus on the criteria for identifying individuals who ultimately own or exercise actual control over an enterprise, while also introducing specific requirements for the declaration and updating of relevant information. These are matters to which enterprises should pay particular attention, especially those with multi-layered ownership structures or foreign elements.

1. Expanded and clarified criteria for identifying beneficial owners

Regulations on beneficial owners of enterprises were introduced under the Law on Enterprises as amended in 2025 and further detailed under Decree No. 168/2025/ND-CP.

Notably, from 23 July 2026, Article 3 of Decree No. 296/2026/ND-CP further amends Article 17 of Decree No. 168/2025/ND-CP, providing greater clarity on the identification of beneficial owners. Accordingly, a beneficial owner is one or more individuals who ultimately directly or indirectly own or exercise actual control over an enterprise having legal personality, excluding individuals representing state capital in enterprises.

An individual shall be identified as a beneficial owner if such individual directly, indirectly, or both directly and indirectly owns at least 25% of the charter capital or at least 25% of the total voting shares. The new Decree additionally provides that individuals having family relationships or an agreement to jointly own at least 25% shall also be identified as beneficial owners. For partnerships, all general partners shall be identified as beneficial owners regardless of their respective capital contribution ratios.

2. Introduction of a mechanism for identifying persons exercising actual control

Compared with the previous regulations, which primarily relied on ownership ratios and controlling rights, the new regulations require enterprises to review each level of their ownership structure in order to identify the individual who ultimately owns or exercises actual control over the enterprise.

Under Clause 2, Article 17 of Decree No. 168/2025/ND-CP, as amended by Article 3 of Decree No. 296/2026/ND-CP, where a beneficial owner cannot be identified based on the 25% ownership criterion, the enterprise must identify the individual exercising control through rights such as appointing or dismissing key management personnel; amending the Charter; changing the organizational structure; deciding on financial, investment, operational, or organizational policies; or deciding on the reorganization or dissolution of the enterprise.

If no such individual can still be identified, the enterprise shall identify the manager with the highest authority to act on behalf of the enterprise, excluding a person representing state capital.

3. Changes to the order for declaring beneficial ownership information

Under Article 18 of Decree No. 168/2025/ND-CP, as amended by Article 4 of Decree No. 296/2026/ND-CP, an enterprise must identify and declare information on its beneficial owner to the provincial-level business registration authority.

The declaration shall be made in the following order: (i) an individual satisfying the ownership criteria; (ii) where such individual cannot be identified, or there are grounds to establish that the person satisfying the foregoing ownership criteria is not the beneficial owner, the individual exercising actual control shall be identified; and (iii) where no individual satisfies either of the above criteria, the manager with the highest authority shall be identified.

This regulation represents a significant change from the previous mechanism, under which enterprises primarily declared individuals/shareholders meeting the 25% threshold and determined cases involving controlling rights.

4. Effective date

Decree No. 296/2026/ND-CP was promulgated on 23 July 2026 and took effect on the same date. Accordingly, the new regulations on the identification and declaration of beneficial owners have applied since 23 July 2026.

For enterprises established before 1 July 2025, Law on Enterprise amended in 2025 requires information on beneficial owners to be supplemented when the enterprise carries out the latest procedure for registration of changes or notification of changes to its enterprise registration information. Such information shall be declared using the relevant forms promulgated together with Circular No. 68/2025/TT-BTC.

5. Notes for enterprises and relevant entities

Enterprises should review their entire ownership structure, particularly where the structure involves multiple layers of ownership or foreign individuals, in order to identify the individual who ultimately owns or exercises actual control over the enterprise. Enterprises should not rely solely on the person directly named on the Enterprise Registration Certificate.

At the same time, enterprises must update and retain information on their beneficial owners and notify any changes within 10 days from the date on which the relevant information or the declared ownership ratio changes, in accordance with Article 52 of Decree No. 168/2025/ND-CP.

Proper identification of beneficial owners not only serves the purpose of enterprise registration but also contributes to transparency in ownership structures and compliance with requirements on the prevention and combating of money laundering.

>> CHARTER CAPITAL TRANSFER, CHANGE OF OWNERSHIP IN SINGLE-MEMBER LLC https://linconlaw.vn/charter-capital-transfer-change-of-ownership-in-single-member-llc/

>> CURRENT LEGAL REGULATIONS ON THE LEGAL REPRESENTATIVE OF AN ENTERPRISE https://linconlaw.vn/current-legal-regulations-on-the-legal-representative-of-an-enterprise/