Vietnam's 2025 Amendment to the Law on Enterprises: Beneficial Owner Disclosure Obligations and Their Impact on Nominee Investment

01 - Background and Significance of the 2025 Amendment to the Law on Enterprises, With Its Focus on ‘Beneficial Owners’
The amended Law on Enterprises, passed on June 17, 2025, places new emphasis on the concept of the ‘beneficial owner.’ The reform was driven in part by the Van Thinh Phat case (involving improper market control exercised through a web of corporate entities), and is also intended to bring Vietnam's framework into line with international standards such as those of the FATF.

02 - The Concept of Beneficial Owner and the Criteria for Identifying One
Decree No. 168/2025/ND-CP defines a beneficial owner as: (i) a person who directly holds 25% or more of the equity or voting shares; (ii) a person who indirectly holds 25% or more through an intermediate company (calculated by multiplying the ownership percentages along the chain); or (iii) a person who, regardless of their equity stake, holds substantive control over matters such as the appointment or removal of directors.

03 - Obligations Imposed on Companies With Respect to Beneficial Owners
These are: (i) the obligation to register, declare, and update beneficial owner information (name, date of birth, nationality, ownership percentage, etc.) with the business registration authority; (ii) the obligation to collect and retain such information (for a minimum of five years even after liquidation); and (iii) the obligation to provide the information to state authorities (tax authorities, police, and financial regulators).

04 - Transitional Measures and Penalty Provisions
Under a transitional arrangement, companies already registered may supplement their beneficial owner information the next time they file a registration amendment. The amendment also signals an intention to introduce administrative penalties.

05 - Impact on Nominee Investment: Risks Arising From the Beneficial Owner Regime for Name-Lending Arrangements
In sectors such as restaurants and accommodation, foreign investors sometimes use ‘nominee investment’ — holding a business in the name of a Vietnamese individual. Under the new regime, the true controlling person must now be registered as the beneficial owner, and any mismatch between the registered name and the underlying reality may be treated as a false declaration (a violation of Article 16.4 of the Law on Enterprises), exposing the arrangement to the risk of registration refusal and administrative penalties.