Mandatory Beneficial Owner Disclosure: What Your Business Needs to Do From July 1, 2025

Beneficial Owner Information: A New Step Toward Transparent Corporate Governance

Starting July 1, 2025, a crucial new regulation from Law No. 76/2025/QH15 amending the Law on Enterprises will officially take effect. All businesses in Vietnam will be required to disclose information about their beneficial owners. This is a strategic move to enhance transparency and help prevent money laundering, tax evasion, and other forms of corporate manipulation.

So, what do businesses need to understand and prepare for this new regulation?

1. Who Is a Beneficial Owner?

Under the new definition, a beneficial owner is an individual who has de facto ownership or control over a business. Here are some simple indicators:

• An individual who directly or indirectly owns 25% or more of the charter capital.

• An individual with the power to control the appointment or removal of most senior management (Board of Directors, General Director) or other critical decisions regarding the company’s organization and charter.

2. July 1, 2025: What Are the Mandatory Obligations?

A new chapter in the amended law requires all businesses, both new and existing, to fulfill the following obligations:

• Information Disclosure: Disclose beneficial owner information in the initial business registration application or in an updated filing. Businesses must use the new official form.

• Information Updates: When there are any changes to the beneficial owner, the business has 10 working days to update the information via the national business registration portal or at the business registration office.

• Internal Record-Keeping: Businesses must keep internal records to prove the disclosed information. This information must be provided to state authorities upon request during inspections or investigations.

3. Consequences of Non-Compliance

Businesses that fail to disclose, provide false information, or intentionally conceal beneficial owner data will face serious risks:

• Application Rejection: New registration applications will be rejected if they do not comply.

• Administrative Penalties: Businesses will face administrative fines as prescribed by law.

• Business Risks: Lack of transparency can create difficulties with banks, fundraising efforts, or partnerships with international companies.

4. The Importance of the New Regulation

Disclosing beneficial owner information is not just a legal obligation but also a move that brings long-term benefits:

• Enhanced Reputation: A transparent ownership structure makes a business more credible and reliable in the eyes of international investors and partners.

• Fighting Financial Crime: This regulation is an effective tool to prevent the use of “shell companies” for money laundering and illegal profit transfers.

• Fostering Sustainable Development: Complying with international standards helps Vietnamese businesses integrate more deeply into the global economy.

To prepare effectively, businesses should review their ownership structures and create internal documentation to explain all related relationships. Being proactive about compliance now will help your business stand on a more solid legal footing.