Vietnam has strengthened its corporate transparency framework by requiring enterprises to identify, declare, update, and retain information on their ultimate beneficial owners (“UBOs”). The regime, introduced from July 2025, has been further clarified under Decree No. 296/2026/ND-CP and reinforced by the penalty provisions of Decree No. 288/2026/ND-CP, effective from 23 July 2026.
Key Compliance Requirements
A UBO generally refers to an individual who ultimately owns or exercises effective control over a Vietnamese enterprise. The identification process follows a sequential approach, considering ownership, effective control, and, where neither criterion identifies an individual, the person holding the highest management authority. In general, individuals who directly, indirectly, or jointly hold at least 25% of charter capital or total voting shares may be identified as UBOs.
The requirements apply to both newly established and existing enterprises. Companies incorporated from 1 July 2025 must submit UBO information during their initial registration process, while enterprises established before this date must supplement such information when they next amend their enterprise registration details. Enterprises are also required to maintain and update their UBO records when relevant changes occur.
Increased Penalties for Non-Compliance
Non-compliance is no longer merely an administrative oversight and may result in significant fines. Depending on the nature of the violation, penalties may range from VND 30 million to VND 100 million, including for providing false or inaccurate UBO information, failing to declare or update UBO details, or failing to maintain the required UBO register or list. Authorities may also require enterprises to correct, supplement, or update their UBO information.
Practical Takeaway
Enterprises should review their ownership and control structures to ensure that their UBO information accurately reflects the individuals who ultimately own or exercise effective control over the business. Companies with layered ownership structures, offshore holding entities, or contractual control arrangements may require a more detailed review to ensure compliance and avoid potential penalties.
