What is a Beneficial Owner of an Enterprise? Who Is a Beneficial Owner?

A beneficial owner (also known as a real owner) is an individual who holds actual ownership or control over an enterprise, even if their name isn’t directly listed on legal documents.

This concept is clearly defined in Law No. 76/2025/QH15. Its purpose is to identify the individual with ultimate controlling power over a company to enhance transparency and combat money laundering and terrorism financing.

Who Is Considered a Beneficial Owner?

According to Decree 168/2025/NĐ-CP, an individual is deemed a beneficial owner if they meet one of the following criteria:

1. Capital Ownership: An individual directly or indirectly owns 25% or more of the charter capital or 25% or more of the total voting shares of the enterprise.
   • Indirect ownership means an individual owns shares/capital through another organization (e.g., a parent company).
2. Controlling Rights: An individual has the right to control the approval of important enterprise matters, including:
   • Appointing, dismissing, or removing a majority or all members of the board of directors, chairman of the board, chairman of the member council, legal representative, director, or general director of the enterprise.
   • Amending the enterprise’s charter, changing its organizational structure, or deciding on its reorganization or dissolution.

Note: This regulation does not apply to state capital representatives in state-owned enterprises (100% state capital) or in joint-stock companies and multi-member limited liability companies.

What Enterprises Need to Do Regarding This Regulation

Starting from July 1, 2025, enterprises must take the following steps to comply with the new regulations:

1. Review and Identify: Review their ownership structure to accurately identify who the beneficial owner is based on the criteria above.
2. Create a List: Compile a detailed list of beneficial owners and keep it in either physical or electronic form.
3. Declare and Report: Submit information about the beneficial owners to the provincial-level business registration authority.
4. Update Information: If there are any changes to the beneficial owner’s information or ownership percentage, the enterprise must notify the business registration authority within 10 days of the change.

Required Documents to Update Beneficial Owner Information

When updating beneficial owner information, an enterprise needs to prepare the following documents:

• Notice of changes to business registration content (following Form No. 12, Appendix I of Circular 68/2025/TT-BTC).
• List of beneficial owners of the enterprise (following Form No. 10, Appendix I of Circular 68/2025/TT-BTC).

Complying with these regulations is not only a legal responsibility but also helps businesses enhance their transparency and reputation in the market.