IMPLEMENTATION OF ULTIMATE BENEFICIAL OWNER (UBO) REGULATIONS IN VIETNAM FROM JULY 1, 2025

I. INTRODUCTION

Starting July 1, 2025, Vietnam will officially implement new requirements related to Ultimate Beneficial Owners (UBOs) under the Law on Amending and Supplementing Certain Articles of the Law on Enterprises No. 76/2025/QH15. This change represents a significant step forward in Vietnam's efforts to promote corporate transparency and align with international anti-money laundering (AML) standards. It also reflects the country’s response to its inclusion on the Financial Action Task Force (FATF)’s "grey list."

II. REGULATORY OVERVIEW

Under the new law, enterprises registering after July 1, 2025, must declare a list of their ultimate beneficial owners (UBOs), if any, to the business registration authority. Enterprises already established before this date must submit UBO information when carrying out business registration amendments.

The list must contain key personal information of each UBO, including: full name, date of birth, nationality, ethnicity, gender, contact address, ownership ratio or control rights, and details of legal identification documents.

Furthermore, enterprises are obligated to:

• Collect, update, and retain information about their UBOs;

• Provide such information to competent authorities upon request;

• Notify the registration authority of any changes to UBO information during operation.

These obligations do not apply to listed companies or those registered for securities trading.

III. WHO IS A ULTIMATE BENEFICIAL OWNER (UBO)?

As defined in Clause 35, Article 4 of the Law on Enterprises 2025, a UBO is an individual who actually owns or has control over an enterprise with legal entity status. This excludes state-authorized representatives in fully state-owned enterprises and representatives of state capital in multi-member companies.

Accordingly, the regulation applies exclusively to organizations with legal entity status (excluding sole proprietorships and business households), and focuses on identifying natural persons with actual control or economic interest in the enterprise.

IV. PURPOSE AND INTERNATIONAL ALIGNMENT

The introduction of the UBO concept serves several critical objectives:

• Comply with FATF Recommendation 24 on corporate transparency and AML enforcement;

• Enhance detection and prevention of tax evasion, corruption, terrorism financing, and financial fraud;

• Address "shadow ownership" structures, where individuals conceal control through layers of entities.

This legal development marks a turning point in aligning Vietnam’s corporate governance with global standards, offering more robust tools for regulators.

V. PRACTICAL IMPLICATIONS FOR ENTERPRISES

Enterprises are required to maintain up-to-date UBO records and submit this information with initial registration or any subsequent amendment of enterprise registration content. Government agencies, particularly those involved in AML oversight, may request this data free of charge. A forthcoming governmental decree is expected to clarify:

• Specific identification criteria;

• Thresholds of ownership or control;

• Responsibilities of declarants;

• Mechanisms for information storage, update, and sharing.

For existing companies, UBO declarations will be required at the next business registration amendment, unless submitted earlier voluntarily.

VI. CHALLENGES FOR FOREIGN INVESTORS

While the new regulatory framework significantly enhances corporate transparency, it also presents notable compliance challenges—particularly for foreign-invested enterprises with complex, multi-tiered ownership structures. Foreign investors often structure their investments through multiple intermediary entities or holding companies to achieve objectives such as tax efficiency, legal risk management, or strategic flexibility.

In this context, the new UBO disclosure requirements raise several critical questions: Will enterprises be required to identify and disclose the ultimate beneficial owner through every layer of indirect ownership? How will such disclosure be handled when entities are incorporated across multiple jurisdictions with differing legal standards?

These concerns are particularly acute in sectors subject to foreign ownership restrictions, where regulatory authorities may now be better equipped to detect violations or concealed arrangements by “piercing the corporate veil.” The anticipated implementing decree is expected to provide greater clarity on the scope of reporting obligations, including potential exemptions and thresholds—such as minimum direct or indirect ownership percentages—that determine whether an individual qualifies as a UBO for disclosure purposes.

VII. RECOMMENDATIONS

To prepare for these changes, businesses and foreign investors should proactively review their existing ownership structures to identify the actual ultimate beneficial owners (UBOs). It is essential to ensure transparency and be ready to provide complete and accurate UBO information as required by the authorities. Companies should closely monitor forthcoming legal guidance and establish internal procedures to ensure compliance with the new regulations. In cases involving complex cross-border ownership arrangements, seeking professional legal counsel is highly recommended to minimize legal risks and ensure full adherence to Vietnam’s evolving corporate transparency framework. 

VIII. CONCLUSION

The UBO regulations introduced under the Law on Enterprises 2025 represent Vietnam's strong commitment to enhancing business integrity and international compliance. Although implementation challenges remain, particularly for foreign investors, this legal framework offers a strategic opportunity for Vietnam to improve its regulatory environment and strengthen its position as a trustworthy investment destination.