Key takeaways

The concept of BO is now incorporated into the Amended LOE and further clarified by Decree 168.

1. What is a BO?

The Amended LOE and Decree 168 establish the definition of BO through two primary tests — ownership and control¹:

• Ownership test: Any individual who:
• Directly owns at least 25% of charter capital or outstanding shares with voting power of a company
• Indirectly owns at least 25% of charter capital or outstanding shares with voting power of a company through (another) organization(s)
• Control/influence test: Any individual who has control or influence over any key decision, including appointment and dismissal of certain key managerial positions, amendment of the company charter, or reorganization and dissolution of the company

2. Who must disclose?

The BO disclosure requirements apply to companies with legal person status established in Vietnam, including: (a) one-member limited liability company; (b) multi-member limited liability company; (c) joint stock company; and (d) partnership company.
The following companies and enterprises are not subject to the BO disclosure requirements: (a) state-owned companies; (b) sole proprietor enterprises; (c) listed companies; and (d) companies that have their securities registered for trading.

3. What to disclose?

From a plain reading of the regulations, the BO disclosure requirements are rather prescriptive as they require a company to disclose personal information (including names, identification document, address and ownership/control percentage) of the BOs who are covered by the direct ownership test or the control/influence test. In particular²:

• If the disclosing company is a joint stock company, it must disclose information of the individual being a shareholder owning at least 25% of its total voting shares.
• If the disclosing company is a multi-member limited liability company or partnership company, it must disclose information of the individual being the member owning at least 25% of its charter capital.
• If the disclosing company is a one-member limited liability, it must disclose information of the individual being its owner.
• For all types of disclosing companies: it must disclose information of the individual who are covered by the control/influence test.

The above requirements appear to indicate that the focus of BO disclosure is premised on direct and control/influence BOs, rather than indirect BOs.

Additionally, a joint stock company must disclose the details of the corporate shareholder holding 25% or more of outstanding shares with voting power, including corporate name, enterprise code/establishment license number along with date and place of issuance, head office address, and voting shareholding. This information is referred to under the regulations as "information for the purposes of identifying the BOs."

4. When to disclose?

From 1 July 2025:

• Companies established after this date must disclose BO data at the time of incorporation.
• Companies established prior to this date must disclose BO data at their next corporate information registration/notification with the authorities, unless they volunteer to make such BO disclosure sooner.
• Any change to the declared BO data (including identity, control percentage, address and personal details) must be notified to the authorities within 10 days of the relevant change.³

5. What are the impacts of BO disclosures?

The BO disclosure requirements could present substantial compliance hurdles, especially for companies with complex or multi-layered ownership structures that may create difficulties identifying BOs with control or influence rights.

The control/influence test is broadly defined, potentially encompassing individuals at the headquarter level. A significant ambiguity lies in how to determine if an individual possesses control or influence over a company in Vietnam. For instance, it is unclear whether only direct decision-making autonomy is required or if a veto right will also be a trigger. Further, in practice, control and influence rights may stem from diverse sources, ranging from straightforward arrangements (such as shareholder or joint venture agreements) to more subtle arrangements (like those that grant control to individuals based on their reputation within the market or specific business areas). It is also uncertain whether such control/influence arrangements must be formalized in writing or if informally established arrangements are also included in the scope of BO disclosure.

The BO disclosure requirements would pose significant challenges to Vietnamese entities, who often lack or have very limited visibility into the ownership structure involved at the headquarter level. A key ambiguity remains regarding the extent of due diligence required from Vietnamese companies as to whether they need to conduct a comprehensive review of the corporate governance of each parent company (including their articles of association, internal governance rules and practice, contractual arrangements, etc.) to identify the individual who may be regarded as having "control/influence" right over it. It is therefore advisable for companies in Vietnam to establish an internal group-wide policy to ensure prompt communication to the Vietnamese entity regarding any potential BO.

We anticipate that licensing authorities may exercise discretion and interpret these provisions based on their own perspectives. As a result, the application of BO disclosure requirements could vary across localities until more specific guidance is officially issued.

While BO data is confidential and shared among government bodies,⁴ notifications on changes to BO information could provide tax and competition authorities with greater access to information on offshore transactions and corporate restructuring. This, in turn, could lead to possible further scrutiny of these transactions from such aspects.

While the extent to which licensing authorities will monitor the quality of BO disclosures remains uncertain, the current application forms merely require information declaration without supporting documentation. Moreover, the specific legal consequences and administrative penalties for noncompliance with BO disclosure requirements under the Amended LOE and its guiding legislation are still unclear pending the issuance of a new regulation on administration sanctions.

1 Article 4.35 of Enterprise Law; Article 17 of Decree 168

2 Article 18 of Decree 168

3 Article 52 of Decree 168; Article 31 of Enterprise Law

4 Articles 74.4 and 74.5, Decree 168