What is a beneficial owner in Vietnam? The 25% test, filing duties and fines

What is a beneficial owner in Vietnam? The definition after Decree 296/2026

A beneficial owner is the individual at the end of the chain of ownership or control of a company. Article 17 of Decree 168/2025/ND-CP on enterprise registration was replaced in full by Decree 296/2026/ND-CP, in force from 23 July 2026. Under it, the beneficial owner of a company with legal entity status is one or more individuals who directly or indirectly own, or ultimately control in fact, the company, excluding individuals who represent state capital.

The concept comes from anti-money-laundering law. Law 14/2022/QH15 defines a beneficial owner as an individual who in fact owns assets and can direct the customer's transactions in them, or who has control over a legal entity or a legal arrangement (Clause 7, Article 3). A legal entity must collect, update and keep information on its own beneficial owners (Clause 2, Article 21), and the State Bank and other competent authorities may require it (Clause 3, Article 21). Decree 168 sets out how a company declares it to the business registration office.

Three points are easy to miss:

• It is always an individual. A corporate or fund shareholder is not a beneficial owner; the search continues up to the individual.
• It is not the same as the registered shareholder or member. Decree 296 also adds a rule that owners, shareholders and members must not stand in for someone else when contributing capital (Clause 1, Article 4 of Decree 168 as amended). A nominee does not change the duty to declare the real beneficial owner.
• It applies only to companies with legal entity status (Article 17), such as limited liability companies, joint stock companies and partnerships.

See the summary of Decree 168/2025/ND-CP.

Who is a beneficial owner in Vietnam in a multi-tier structure? The three-step test

Article 17 works in sequence, not as two parallel tests as in the original text. Each step applies only if the previous one finds no one (Clause 2, Article 18).

The company must review each tier of its ownership structure until it finds the individual with ultimate ownership or control (Clause 1, Article 18).

Worked example (hypothetical, to show the tier-by-tier review). Company A in Vietnam is owned 60% by Company B (Singapore) and 40% by Mr X. Company B is owned 50% by Mr Y and 50% by Company C; Company C is wholly owned by Ms Z.

• Mr X owns 40% directly, above 25%: a beneficial owner.
• Mr Y owns about 30% indirectly through B (60% x 50%): a beneficial owner.
• Ms Z owns about 30% indirectly through C and B (60% x 50% x 100%): a beneficial owner.

If instead Company B were owned equally by four individuals, each would hold only about 15% (60% x 25%) and no one meets step 1. The company would move to step 2 and ask who in fact decides on appointments, the charter and the policy of A. Note that the Decree gives no formula for multiplying percentages to measure indirect ownership; the calculation above is the usual reading. For complex structures, agree the method with the business registration office before filing.

Where the structure contains a legal arrangement, meaning a trust or similar arrangement set up under foreign law (Clause 12, Article 3 of Law 14/2022/QH15), the beneficial owner of that arrangement is found under the anti-money-laundering law (Clause 1, Article 18 of Decree 168 as amended).

Declaring, keeping and updating beneficial owner information

Companies set up before 1 July 2025. Decree 288/2026 fines a company VND 70-100 million if it does not add beneficial owner information (where there is any) when it carries out its most recent registration or notice of change to the enterprise registration (Clause 6, Article 44 of Decree 122/2021). In practice, the next change filing is the moment to add it.

No separate duty for corporate shareholders. Decree 296 repeals Clause 2 of Article 52 and replaces Article 18, so the separate duty to notify corporate shareholders holding 25% or more (old Clause 3, Article 18) no longer exists. The look-through to individuals replaces it.

Confidentiality. Beneficial owner information is not supplied on ordinary requests; competent state agencies may ask for it for anti-money-laundering work (Clauses 4 and 5, Article 74). In practice, banks and other reporting entities under the anti-money-laundering law must identify the beneficial owner of corporate customers (Clause 2, Article 10 of Law 14/2022), so a company is often asked for the same information when opening an account or borrowing.

Fines for not declaring a beneficial owner

Decree 288/2026/ND-CP (in force from 21 July 2026) amends Decree 122/2021/ND-CP on administrative penalties in planning and investment. The amounts below are for organisations; an individual committing the same act pays half (Clause 2, Article 4 of Decree 122/2021).

For failing to declare, notify, add, keep or supply information, the company is also ordered to carry out the missing duty.

What is a beneficial owner in Vietnam for FDI companies and buyers in M&A?

For FDI companies and foreign investors, three situations usually trigger an update:

1. Setting up a foreign-owned company. The incorporation file must declare the beneficial owner from the start; leaving it out can draw a fine under point c, Clause 4, Article 46. If the foreign investor is a legal entity, the company must look through that investor's structure to the final individual. See what is an FDI company in Vietnam.
2. Buying or selling shares or capital contributions. A change of owner at any tier can change a person's beneficial ownership or indirect percentage. That starts the 10-day notice period, so add the update to the post-closing timetable. For larger deals also read what is economic concentration in Vietnam and what is due diligence in Vietnam, where review of the ownership structure and the beneficial owner list is one workstream.
3. Restructuring the group offshore. A transfer of shares between foreign holding companies can change who sits at the end of the chain without the Vietnamese company signing anything. The company should require its parent to give advance notice of changes so that it can notify within 10 days.

Where the structure changes at the same time as the content of the investment registration certificate, see what is an IRC in Vietnam and the service on amending the investment registration certificate and enterprise registration.

Beneficial owner declaration checklist

1. Draw the ownership chart from the company up to the final individuals, with the capital and voting percentages at each tier.
2. Apply step 1: find individuals owning 25% or more directly, indirectly or both; aggregate groups related as family or by contract.
3. If none: apply step 2 (control) and then step 3 (manager with the greatest authority) and record the basis.
4. Check for legal arrangements (foreign trusts) in the structure and identify their beneficial owner under the anti-money-laundering law.
5. Declare on incorporation; for a company set up before 1 July 2025, prepare to add the information at the next change filing.
6. Keep the list of beneficial owners with the documents proving each tier.
7. Set a process: every change of shareholder, member or ownership percentage at any tier is checked for its effect on the list and notified within 10 days.
8. If any nominee holds capital for another person, end or regularise the arrangement under Clause 1, Article 4 of Decree 168 as amended.

Common mistakes

• Declaring a corporate shareholder instead of the individual at the end of the chain.
• Testing 25% at each tier in isolation, ignoring cumulative indirect ownership and family or contract groups.
• Forgetting to notify when the change happens at a foreign parent.
• Treating the nominee as the beneficial owner when someone else decides in practice.
• Not keeping the list and supporting documents, which is fined separately under point e, Clause 2, Article 52 of Decree 122/2021 even if the declaration was made.