Vietnam Mandates Beneficial Ownership Disclosure for Enterprises

Vietnam has introduced a mandatory framework requiring enterprises to proactively identify and declare their beneficial owners (UBOs), marking a significant step in strengthening corporate transparency and anti-money laundering (AML) compliance. Effective July 23, 2026, Decree No. 296/2026/ND-CP amends the enterprise registration regime by replacing the previous “if any” approach, under which businesses declared a beneficial owner only when one was readily identifiable, with a mandatory, sequential process for identifying and reporting beneficial ownership. The new rules require enterprises to look beyond their immediate shareholders and trace ownership and control through every level of the corporate structure until the individual who ultimately owns or exercises effective control over the enterprise is identified. A beneficial owner is defined as one or more individuals who ultimately own or exercise effective control over an enterprise with legal person status, excluding individuals representing state capital. In practice, the identification process involves first determining if any individual directly or indirectly owns at least 25 percent of the enterprise’s charter capital or voting rights. If no individual satisfies this ownership threshold, or if there is evidence that the identified shareholder is not the true beneficial owner, the enterprise must identify the individual exercising effective control. Indicators of effective control include the ability to appoint or dismiss enterprise directors, convene or attend board or shareholder meetings, and influence key business decisions. Only if no individual can be identified through ownership or effective control should the enterprise designate the individual with the highest managerial authority authorized to act on its behalf as the beneficial owner. This does not apply to individuals representing state capital. The new rules transform beneficial ownership from a disclosure exercise into an ongoing compliance obligation. Enterprises, particularly those with multi-tier corporate structures, foreign shareholders, nominee arrangements, trusts, or family ownership, may need to undertake detailed ownership mapping to determine who ultimately owns or controls the business. Companies should also establish internal procedures to monitor ownership changes and maintain supporting documentation for future registration updates. As Vietnam continues aligning its corporate governance framework with international AML standards, identifying and maintaining accurate beneficial ownership information is expected to become an increasingly important component of corporate compliance and regulatory risk management.