Vietnam – Enhanced UBO Identification Rules Increase Beneficial Ownership Transparency

Vietnam has introduced updated rules for identifying Ultimate Beneficial Owners (UBOs), requiring companies to trace ownership through every level of a corporate structure until the natural person or persons who ultimately own or control the entity are identified. The changes, introduced under Decree 296/2026/ND-CP, took effect on 23 July 2026 and represent a significant enhancement of Vietnam’s beneficial ownership framework.

The reforms are intended to improve transparency by closing gaps that previously allowed complex ownership structures to obscure the individuals exercising ultimate ownership or control. Companies subject to the rules should review existing ownership disclosures and ensure they align with the updated identification methodology.

Regulatory Background

Decree 296/2026/ND-CP amends Decree 168/2025/ND-CP and introduces a more detailed approach to beneficial ownership identification.

Under the previous framework, companies could often stop their review at the first identifiable corporate shareholder or controlling entity. The revised rules now require businesses to continue tracing ownership through intermediary entities and ownership layers until the ultimate natural person or persons exercising ownership or control have been identified.

The changes align Vietnam’s enterprise registration framework more closely with international anti-money laundering and transparency standards and reinforce the authorities’ focus on identifying the individuals behind complex ownership structures.

Applicability and Scope

The requirements apply to:

• Companies incorporated under Vietnam’s Law on Enterprises
• Branches incorporated under Vietnam’s Law on Enterprises

Representative Offices remain outside the scope of the UBO identification requirements.

Any changes to UBO information must generally be reported within 10 days of the change occurring.

Updated UBO Identification Framework

The revised rules establish a three-stage hierarchy for identifying a UBO.

1. Ownership Test

The first step is to identify individuals who directly or indirectly own 25% or more of a company’s charter capital or voting rights.

Importantly, the rules now require companies to look beyond direct ownership and trace ownership through intermediary entities and legal arrangements until the ultimate individual owner is identified.

This change is designed to ensure that beneficial ownership cannot be obscured through multi-layered corporate structures.

2. Control Test

Where no individual satisfies the ownership threshold, or where there are grounds to believe the identified owner is not the true beneficial owner, attention shifts to who exercises ultimate control over the company.

Control may include the ability to:

• Appoint or remove directors or senior decision-makers
• Amend the company’s charter
• Determine strategic, operational or investment policies
• Reorganise or dissolve the company
• Exercise effective control through governance or contractual arrangements

The focus of this test is identifying the individual who ultimately directs or influences the company’s affairs, regardless of formal ownership percentages.

3. Manager of Last Resort

If no individual can be identified under either the ownership or control tests, the company must report the individual with the highest authority to act on behalf of the business.

Depending on the organisation’s governance structure, this may include:

• The Chairman
• The President
• The General Director or Managing Director
• Another senior executive holding the highest managerial authority under the company’s charter

This approach ensures every reporting entity can identify a reportable UBO for registration purposes.

Registration Requirements

Where a UBO has been identified, the company must report and maintain the relevant beneficial ownership information through the enterprise registration process.

If no individual satisfies either the ownership or control criteria, the company must register the senior manager with the highest authority as the reportable UBO under the manager-of-last-resort provisions.

Companies should ensure ownership records remain accurate and are reviewed regularly, particularly when ownership structures or governance arrangements change.

Public Access to UBO Information

Vietnam’s UBO information is submitted to the business registration authorities and stored within the National Business Registration Database.

Under the applicable legislation, UBO information is generally excluded from information made available through standard enterprise registration disclosures, and access is intended to be restricted to competent authorities for anti-money laundering purposes.

However, businesses should be aware that in practice certain UBO information may currently be accessible through the National Business Registration Portal to account holders, creating a greater degree of transparency than may have originally been anticipated.

Risks of Non-Compliance

Failure to comply with the registration requirements may result in regulatory and operational consequences.

Potential sanctions include:

• Monetary penalties of up to VND 30,000,000
• Delays or restrictions in processing business registration amendments
• Delays in establishing new enterprises
• Administrative complications where UBO information has not been submitted or maintained correctly

In addition, applications to establish a company or amend registration information may not be processed until the required UBO information has been registered.

As a result, businesses should ensure beneficial ownership reviews are conducted proactively and that any changes are reported within the prescribed timeframe.

How Mercator® by Citco (Mercator) Can Help

Mercator can assist with:

• Reviewing ownership and control structures
• Identifying reportable beneficial owners under the revised framework
• Analysing complex multi-layer ownership chains
• Preparing UBO registration information and supporting documentation
• Assisting with initial registrations and ongoing maintenance requirements
• Supporting amendments following ownership or governance changes
• Preparing internal beneficial ownership registers where required

For assistance, please contact [email protected]