Vietnam Grapples with Surge in Identity Theft for Business Registration

Cases of individuals being unknowingly registered as legal representatives of businesses or sole proprietorships, leading to unexpected tax burdens and legal liabilities, are on the rise across Vietnam. Vu Van Thanh in Hanoi was shocked to discover he was the legal representative of a company with over VND 4.1 million (approximately $165) in overdue taxes, despite having no involvement in its establishment or operation. He also found his name registered with another company on the National Enterprise Registration Portal. Pham Long Vu faced a similar situation when his application for sole proprietorship registration was rejected due to "duplicate information." Upon checking with the tax department, he learned that his Citizen Identification Card (CCCD) had been used since 2023 to register a tax code and establish an eyewear business in Ho Chi Minh City. Vu, who has no connection to the city or expertise in optometry, has reported the incident to the police for suspected personal information misuse. Experts attribute these incidents to simplified business registration procedures and a lack of robust owner verification, creating loopholes for identity theft. While past regulations allowed business establishment with just copies of identification documents, recent online application channels have not entirely eliminated the risk of CCCD information being exploited. Le Van Tuan, Director of Keytas Accounting and Tax Consulting Co., Ltd., noted that the previous procedure, which only required a copy of an ID card and a registration application submitted to the Department of Planning and Investment (now Department of Finance), and later online channels, did not mandate verification of the actual business owner. This allowed individuals with a copy of someone's CCCD or ID to exploit it for business registration. Lawyers advise individuals who discover they have been impersonated to promptly gather evidence and report the matter to the business registration office, the police, and the tax authorities. Nguyen Thanh Ha, Chairman of SBLaw Law Firm, recommends that affected individuals immediately submit a written request to the Business Registration Office where the company was established to report the incident. They should also report to the police and tax authorities to request an investigation into the illegal use of personal information and guidance on removing the impersonated information. However, Mr. Ha acknowledges that resolving impersonation cases often takes time. Business registration offices primarily review the validity of submitted documents and do not have the function to investigate or authenticate signatures and identities of registrants. Therefore, adjustments or revocations of business registration information must await the verification results from investigative agencies. "This process is necessary to ensure objectivity but prolongs the time to resolve cases," Ha stated. To combat these fraudulent activities, the Vietnamese government is strengthening preventative measures, including mandatory VNeID authentication for online registrations and prohibiting the establishment or capital contribution to businesses under someone else's name. Decree 296/2026 stipulates that online business registrants must authenticate through VNeID accounts and cross-reference with the National Population Database. Furthermore, new regulations prohibit acting as a nominee for others in establishing or contributing capital to businesses and require founders to attest to the accuracy of their submitted documents. Lawyer Nguyen Thanh Ha suggests that regulatory bodies enhance electronic verification through high-level identification accounts and biometrics, and complete the legal framework for personal data protection. He also recommends that operators develop an automatic alert mechanism, sending immediate notifications to VNeID accounts, emails, or registered phone numbers upon business establishment or changes in legal representatives. Additionally, business registration offices, police, and tax agencies could establish a rapid processing mechanism to reduce verification time for individuals experiencing impersonation. From a management perspective, tax authorities remind the public to regularly check information on the National Enterprise Registration Portal. Citizens are prohibited from lending, renting, or allowing others to use their CCCD or personal information for establishing businesses or sole proprietorships. The General Department of Taxation stated that the eTax Mobile app will soon add a function to look up businesses and sole proprietorships registered under individual names, enabling citizens to proactively check and detect signs of impersonation for timely resolution.