AMENDED LAW ON ENTERPRISES 2025 – TRANSPARENCY OF BENEFICIAL OWNERSHIP: A KEY TO COMBATING FRAUD AND BUILDING TRUST

Over the years, the use of nominees, the declaration of inflated charter capital, and the concealment of complex ownership structures have posed significant challenges for regulatory authorities as well as investors and business partners. These practices create loopholes for tax evasion, money laundering, and market manipulation, while simultaneously undermining the confidence of domestic and foreign investors.

To address these issues, the Amended Law on Enterprises 2025 introduces a critical pillar: transparency of beneficial ownership (Beneficial Ownership – BO).

Transparency of Beneficial Ownership – The Core of Reform

Under the new regulations, enterprises are no longer required to disclose only their legal owners, but must also identify, disclose, and regularly update information on the ultimate beneficial owner—the individual or organization that ultimately exercises actual control or decisive influence over the enterprise. Such control may be exercised through equity ownership, voting rights, authorization arrangements, nominees, or complex multi-layered ownership structures.

Key Highlights

• Disclosure of beneficial owners: All enterprises are required to declare and maintain updated information on their beneficial owners.
• Obligation to notify changes: Any change in ownership structure or control must be promptly reported to the business registration authority.
• Tightened control over charter capital: Enhanced measures to prevent false capital declarations, including verification of capital contribution and funding sources.
• Regulation of nominee arrangements: The law recognizes the risks associated with sham authorization and nominee structures and establishes mechanisms to detect and address such practices.

These amendments represent a decisive step toward aligning Vietnam’s corporate governance framework with international standards on transparency, anti-money laundering, and financial crime prevention.

Significance and Impact

• Enhancing business transparency, enabling investors and partners to accurately assess a company’s financial capacity and actual control structure.
• Preventing fraud and tax evasion, thereby safeguarding the stability of the capital market and the business environment.
• Strengthening Vietnam’s international credibility, particularly in the context of deeper integration into global trade and investment frameworks.

Compliance Challenges for Enterprises

For the business community, these new requirements necessitate an urgent review of ownership structures, internal governance mechanisms, and compliance frameworks. Transparency of beneficial ownership should be viewed not merely as a legal obligation, but as a strategic tool for risk management and long-term trust building.

Legal Support for Enterprises

Celigal Law LLC, with a team of experienced lawyers specializing in corporate, investment, and corporate governance matters, is well positioned to assist enterprises in:

• Reviewing and restructuring ownership models;
• Advising on and establishing beneficial ownership compliance mechanisms;
• Supporting enterprises in fulfilling their obligations under the Amended Law on Enterprises 2025.

Transparency drives growth – Compliance ensures sustainability.
Let Celigal be your trusted legal partner, supporting your business on its journey toward sustainable development and global integration.