Identifying beneficial owners under Decree No. 296/2026/ND-CP

In the trend toward greater transparency in corporate governance and identifying the individuals ultimately behind investment activities, regulations on beneficial owners (“BOs”) play an important role in enterprise registration law. On July 23rd, 2026, the Government issued Decree No. 296/2026/ND-CP amending and supplementing Decree No. 168/2025/ND-CP on enterprise registration (“Decree 296”), further refining the mechanism for identifying BOs by looking not only at ownership percentages but also at actual control. 

These provisions are particularly relevant to foreign direct investment (“FDI”) enterprises with multi-tier ownership structures, as identifying BOs requires looking through the ownership chain and governance rights. 

1. The 25% threshold is an important identification criterion: 

Under Article 3 of Decree 296, a BO is an individual who ultimately, directly or indirectly, owns or exercises actual control over an enterprise with legal entity status, except an individual representing State capital. 

An individual who directly, indirectly, or through a combination of both holds 25% or more of the charter capital or 25% or more of the total voting shares is identified as a BO. Indirect ownership may be held through an organization or another legal arrangement.  

Where individuals have family relationships as defined under the Law on Enterprises or have an agreement to collectively hold 25% or more, all such individuals are BOs. For a partnership, all general partners are BOs. 

2. Actual control must also be considered: 

The 25% ownership threshold is not the sole criterion. If no individual meets this threshold, or there are grounds to conclude that the person meeting the threshold is not the ultimate beneficial owner, the enterprise must continue identifying the individual with controlling rights. 

Control may be evidenced by the authority to appoint or dismiss management personnel; amend or supplement the charter; alter the organizational structure; decide financial, investment or operational policies; or decide the reorganization or dissolution of the enterprise.  

Accordingly, an enterprise should review its charter, shareholders’ agreements, investment agreements and allocation of governance rights, rather than relying solely on equity ownership percentages. 

3. Identifying BOs throughout the ownership chain: 

Article 4 of Decree 296 sets out a three-tier sequence for identifying BOs. First, the enterprise identifies individuals satisfying the ownership criterion. If this criterion does not reflect the person exercising actual control, the enterprise identifies the individual with controlling rights. Only when no individual can be identified under either of the first two criteria does the enterprise identify the manager with the highest authority to act on its behalf, except a representative of State capital. 

The enterprise must review each level of its ownership structure until the individual with ultimate ownership or control is identified. If a legal arrangement falls within the scope of anti-money laundering laws, the BO of that arrangement is identified in accordance with the corresponding regulations. 

Accordingly, declaring BO information requires tracing ownership to the ultimate individual, rather than stopping at direct shareholders or members. 

4. Key considerations for FDI enterprises: 

For FDI enterprises, retaining documents relating only to direct shareholders or members may be insufficient. Enterprises should maintain an ownership chart tracing to the ultimate individual, together with supporting documents for each ownership layer. 

In addition to equity ownership percentages, enterprises should review their charters, shareholders’ agreements, rights to appoint managers and rights to decide material matters, particularly upon capital transfers or restructurings. The Vietnamese company and its parent company should also agree on a point of contact responsible for updates so that the records accurately reflect the ownership structure and actual control. 

5. Conclusion: 

Decree 296 confirms that a BO is not necessarily the individual whose name appears directly in the enterprise’s records; the focus is on identifying the ultimate individual who owns the interests or is actually capable of controlling the enterprise.  

For FDI enterprises, BO identification should be reviewed regularly. A clear ownership chart, complete supporting documents and an appropriate internal update mechanism will help enterprises make consistent declarations and satisfy transparency requirements in enterprise registration. 

Submission date: September 20, 2026

Related posts

  1. Update on Regulations on Beneficial Ownership from 23 July 2026 
  2. Responsibility for declaration of beneficial owners of enterprises 
  3. Regulations on “beneficial owners” under the draft amendment to the law on enterprises

Disclaimers:

This article is for general information purposes only and is not intended to provide any legal advice for any particular case. The legal provisions referenced in the content are in effect at the time of publication but may have expired at the time you read the content. We therefore advise that you always consult a professional consultant before applying any content.

For issues related to the content or intellectual property rights of the article, please email cs@apolatlegal.vn.

Apolat Legal is a law firm in Vietnam with experience and capacity to provide consulting services related to Business and Investment and contact our team of lawyers in Vietnam via email info@apolatlegal.com.



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