Navigating Ultimate Beneficial Ownership in Vietnam: A Comprehensive Guide to the New Law on Enterprise and Decree 168/2025

I. Introduction: The Imperative for UBO Transparency in Vietnam

Vietnam has embarked on a significant legal reform journey to enhance corporate transparency and align with international standards in the fight against financial crime. A cornerstone of this reform is the formalization of Ultimate Beneficial Ownership (UBO) regulations, primarily through the Amended Law on Enterprise 2025 and its guiding Decree 168/2025/ND-CP. These legislative updates, largely effective from July 1, 2025, represent a pivotal shift in Vietnam’s corporate governance landscape.

This Amended Law, for the first time, mandates the disclosure of UBO information in company registrations. This foundational law is comprehensively complemented by Decree 168/2025/ND-CP, issued on June 30, 2025. This Decree provides detailed guidelines for implementing the 2020 Law on Enterprises, specifically clarifying the responsibilities of enterprises in identifying, declaring, and disclosing UBO information. Further practical guidance is provided by Circular 68/2025/TT-BTC, which introduces standardized forms for enterprise registration, including the now mandatory UBO declaration forms.

II. Defining the Ultimate Beneficial Owner (UBO)

Understanding the precise definition of a UBO is fundamental for compliance. While the concept has international roots, Vietnam has tailored it to its specific legal framework.

International Perspective: The Financial Action Task Force (FATF) Definition of UBO

The Financial Action Task Force (FATF), recognized globally as the standard-setter for combating money laundering and terrorist financing, provides a foundational definition of a UBO. According to FATF, a UBO is defined as the natural person(s) who ultimately owns or controls a customer and/or the natural person on whose behalf a transaction is being conducted. This definition is crucial because it emphasizes that the UBO must always be one or more natural persons, even when ownership or control is exercised indirectly through a complex chain of ownership or by other non-direct means, a concept referred to as "ultimate effective control". The FATF's guidance encourages countries to adopt a flexible approach based on their specific risk assessments, but it typically suggests an ownership threshold, commonly around 25%, as a benchmark for identifying controlling shareholders.

Vietnam's Legal Framework

The concept of UBO was formally introduced into Vietnamese law with the Law on Anti-Money Laundering in 2022. Under Clause 7, Article 3 of this law, a UBO was broadly defined as "an individual who has actual ownership of one or more assets, has the authority to influence transactions for their benefit, or controls a legal entity or arrangement". 

The Amended Law on Enterprise 2025 further solidifies the UBO concept. Article 4.35 introduces the "Beneficial Owner" as an individual who directly or indirectly owns charter capital or exercises control over an enterprise. This broad definition aims to identify the individuals who truly own or control an enterprise, irrespective of whether their names formally appear in official registration documents. The Amended Law also stipulates that a UBO is an individual who actually owns the charter capital or exercises control over the company, with certain exceptions for state-owned companies.

Detailed Definition and Criteria in Decree 168/2025 (Article 17)

Decree 168/2025/ND-CP provides the most granular and actionable criteria for identifying a UBO of an enterprise with legal entity status. Under Article 17, an individual is considered an ultimate beneficial owner if they satisfy one of the following specific conditions:

• Ownership-Based: Directly or indirectly owns at least 25% of the charter capital or 25% or more of the total voting shares of the enterprise. Indirect ownership is explicitly clarified as owning 25% or more through another organization.

• Control-Based: Has the right to control decision-making on at least one of the following matters: appointment or removal of the majority (or all) of the members of the Board of Directors, Chairman of the Board of Directors, Chairman of the Members' Council; the legal representative; the general director or director; amending the company's charter; altering the organizational structure; or decisions regarding reorganization or dissolution.

III. Administrative Procedures for UBO Disclosure and Updates

Compliance with Vietnam's new UBO regulations necessitates adherence to specific administrative procedures for both initial declarations and ongoing updates.

Initial Declaration Obligations

For companies established after the Amended Law on Enterprise 2025 took effect on July 1, 2025, there is a mandatory obligation to include UBO information in their initial company registration dossier. This specifically requires the submission of a UBO List, which is now a compulsory document during company formation. To facilitate this, the Ministry of Finance has issued Circular 68/2025/TT-BTC, introducing new standardized forms for enterprise registration, including Standard Forms 10 and 11, which are specifically for declaring ultimate beneficial owners. 

Ongoing Obligations

Beyond initial registration, enterprises are subject to continuous obligations regarding UBO information. Companies must promptly establish a process to collect, update, and maintain accurate UBO information to ensure compliance with legal requirements and avoid penalties. Any change to the UBO information, such as a change in personal details, ownership percentage, or control rights, must be notified to the provincial Business Registration Office within 10 days from the date of change. This ongoing obligation to collect, update, and retain UBO information is explicitly mandated under Article 8.5a of the Amended Law on Enterprise. 

Record-Keeping and Retention

Enterprises are required to maintain the List of Ultimate Beneficial Owners that has been declared to the Business Registration Office. This list can be kept in either paper or electronic format. Furthermore, a significant requirement pertains to data retention: UBO information must be retained for at least five years following the dissolution or bankruptcy of the enterprise, as stipulated by Article 216.1(g) of the Amended Law on Enterprise. This ensures a clear record of ownership remains accessible for legal scrutiny even after a company ceases operations.

Provisions for Existing Enterprises

Companies established before July 1, 2025, are not required to retroactively submit UBO data immediately. However, the supplementation of UBO information and identifying details becomes mandatory concurrently with the enterprise's next procedure for registering or notifying changes to its business registration contents. This means that any post-July 1, 2025, update - such as a change in legal representative, charter capital, or shareholder - will trigger the obligation to declare UBO information. Businesses established before this date should proactively review their ownership structures and prepare for disclosure, as even minor changes can activate this requirement.

For a comprehensive overview of UBO disclosure and update obligations, refer to the table below:

Table 1: UBO Disclosure and Update Obligations Summary

Obligation Type	Details/Requirements	Information Required (for UBOs)	Information Required (for Organizational Shareholders ≥25% voting shares)
Initial Registration	Mandatory inclusion in initial company registration dossier; UBO List (Standard Forms 10 & 11 Circular 68) compulsory.	Full name, date of birth, nationality, ethnicity, gender, contact address, ownership percentage/control rights, legal identification documents (ID card/passport).	Organization's name, enterprise code/establishment decision number, date/place of issue, head office address, percentage of total voting shares owned.
Ongoing Maintenance	Collect, update, and retain accurate UBO information promptly.	Same as above.	Same as above.
Change Notification	Notify the Business Registration Office within 10 days from the date of change.	Same as above.	Same as above.
Record Keeping	Maintain UBO list (paper or electronic format). Retain UBO data for at least 5 years following dissolution or bankruptcy.	Same as above.	Same as above.
Existing Enterprises (pre-July 1, 2025)	Not required to submit retroactively; disclose upon next business registration change (e.g., change in legal representative, charter capital, shareholder).	Same as above.	Same as above.

IV. Impacts on Businesses and Investors

The new UBO regulations in Vietnam carry significant implications, presenting both challenges and strategic opportunities for businesses and investors.

Challenges and Considerations

The new UBO regulations introduce several challenges for businesses:

• Increased Compliance Burden: Businesses face an increased administrative burden, requiring them to establish processes for collecting, updating, and maintaining UBO information, a task many have never had to perform before.

• Complexity for Multi-Layered Structures: The regulations pose particular challenges for foreign investors and businesses with complex, multi-layered ownership structures, often involving intermediary legal entities or holding companies. Identifying the ultimate natural person through such chains requires meticulous due diligence.

• Disclosure of Internal Arrangements: The disclosure of UBO information exposes internal ownership arrangements and commercial agreements, which businesses might prefer to keep confidential. This can impact internal governance and external relations, particularly in sensitive sectors like finance, real estate, or technology.

• Increased Legal Exposure: The new mechanism could significantly increase legal exposure for individuals identified as beneficial owners, particularly within multi-entity groups or holding structures with independently operated subsidiaries.

Personal Responsibility

A notable aspect of the new framework is the emphasis on personal responsibility for compliance. Legal representatives who sign and submit registration documents bear personal accountability. Misrepresentations or failure to disclose UBO information can lead to sanctions or delays in processing corporate filings. Non-compliance may result in civil and regulatory liabilities for these individuals. This shift towards greater individual accountability compels a more rigorous internal verification process before submitting UBO data, moving beyond corporate liability to individual professional risk. This will likely lead to legal representatives demanding more robust internal processes for UBO identification and verification, potentially increasing the demand for internal compliance audits and legal opinions on UBO structures.

V. Other Relevant Matters

Beyond the core definitions, determination, and administrative procedures, several other matters warrant attention for a complete understanding of Vietnam's UBO regulatory landscape.

Penalties for Non-Compliance

Non-compliance with UBO regulations carries significant consequences. Enterprises may face administrative fines ranging from VND 20,000,000 to VND 30,000,000 for providing dishonest or inaccurate information in their business registration application or for failing to notify changes to business registration information as required by law. It is anticipated that the Government may issue further decrees to amend Decree 122/2021/ND-CP to include additional administrative sanctions specifically applicable to UBO-related violations, reflecting the novelty and importance of these legal obligations.

Crucially, the implications of non-compliance extend beyond monetary penalties. Misrepresentations or failure to disclose UBO information can lead to delays in processing corporate filings. More severely, such non-compliance can serve as a legal basis to question the validity of ownership proportions, shareholder rights, and capital-based entitlements, such as voting or dividend claims. This means that the risk of non-compliance is not merely financial; it can fundamentally undermine a company's internal structure and legal standing. The Amended Law on Enterprise also strictly prohibits the falsification, inaccurate declaration, or dishonest registration of enterprise information, including fraudulent representations of charter capital, with non-compliance resulting in civil and regulatory liabilities. 

Access to UBO Information

The new regulations clarify who can access UBO information. Competent state authorities, including the Business Registration Authority, tax authorities, and AML enforcement units, will now have access to clear and traceable data on who ultimately owns and controls a business. Under Article 52 of Decree 168/2025, these authorities are entitled to access UBO information from the National Business Registration Information System without charge. This access is exclusively intended to support efforts in preventing and combating money laundering.

VI. Conclusion: Proactive Compliance for a Transparent Future

The introduction of Ultimate Beneficial Ownership regulations under Vietnam's Amended Law on Enterprise 2025 and Decree 168/2025/ND-CP marks a pivotal moment in the nation's efforts to enhance corporate transparency and align with global anti-money laundering standards. These reforms, driven significantly by Vietnam's commitment to exit the FATF "grey list," represent a profound shift in how corporate ownership and control are identified, disclosed, and monitored.

For businesses operating in Vietnam, mastering the definition of a UBO, correctly identifying the natural persons who ultimately own or control their entities, and strictly implementing the obligations to declare and update this information are no longer optional but mandatory requirements. The detailed criteria provided by Decree 168/2025, encompassing both direct/indirect ownership thresholds and various forms of control, aim to penetrate complex corporate structures and address historical issues of "shadow ownership." While this introduces an increased compliance burden, particularly for foreign investors with multi-layered structures, it also presents significant strategic advantages. Proactive compliance can facilitate smoother business processes, prevent delays, minimize regulatory red flags, and enhance credibility with partners and investors, ultimately fostering greater market trust.

Therefore, it is imperative for enterprises to proactively review their ownership structures, accurately identify their UBOs, and prepare robust systems for information disclosure and ongoing maintenance. For businesses with complex ownership structures, seeking advice from legal experts is a prudent step to ensure full and proper compliance, thereby avoiding potential legal risks and reputational damage. Vietnam's reforms clearly signal a raised bar for corporate transparency and accountability, promoting genuine ownership and ensuring capital reflects reality. Strict adherence to these UBO regulations is not just a legal duty; it is a strategic imperative for stable operations and building solid trust in Vietnam's increasingly integrated economic landscape.