Welcome back to The Lawyers Talk, the podcast channel of BLawyers Vietnam. My name is Chau Dang, and I am very pleased to be with you for Podcast today.
If your company is carrying out business registration procedures, or changing its business registration, you may have received a common request from the Business Registration Authority: “Please provide information on the beneficial owner of the company”. At first, this may look like a simple declaration. But for companies with multi-layer ownership structures, especially Vietnamese companies owned directly or indirectly by foreign organizations, identifying the real beneficial owner can be more complicated.
More importantly, from July 2026, failure to declare this information or providing inaccurate information may result in significant administrative penalties. In certain cases, a person identified as a beneficial owner may also be subject to exit suspension due to the company’s tax liabilities.
So, what should companies and investors watch out for when preparing or updating their business registration dossiers? In this episode, BLawyers Vietnam will focus on 03 practical questions about beneficial ownership declaration in Vietnam:
- First, can a company be penalized for failing to declare information about its beneficial owner?
- Second, for a company with a multi-layer ownership structure, especially where the direct owner is a foreign company, who will be identified as the beneficial owner?
- Third, in what cases may an individual identified as a beneficial owner be subject to exit suspension?
1. Can a company be penalized for failing to declare its beneficial owner?
Under Articles 3 and 4 of Decree No. 288/2026/ND-CP, a company that fails to declare information about its beneficial owner, or information used to identify its beneficial owner, when carrying out business registration procedures may be subject to a fine of VND50 million to VND100 million. The company must also take corrective action by providing the missing information.
For companies established before the beneficial ownership declaration requirement became applicable, the risk also arises when they make their latest business registration change. For example, if they change the legal representative or head office address but fail to provide the required beneficial ownership information, the company may be fined from VND70 million to VND100 million.
The company may also be penalized if it fails to respond to a request from a competent authority. This includes failing to provide beneficial ownership information, providing incomplete information, missing the deadline, or providing untruthful or inaccurate information.
The key point here is information about the beneficial owner is no longer just a procedural requirement. Companies are required to identify, declare, and update this information accurately.
2. For a company with a multi-layer ownership structure, who is the beneficial owner?
This is probably one of the questions that many companies, especially foreign-invested companies, are most concerned about.
Under Article 3 of Decree No. 296/2026/ND-CP, the beneficial owner of a legal-entity company is the individual, or individuals, who directly or indirectly own or ultimately control the company in practice. This can be understood in 03 levels.
Level 1: Based on ownership
First, ownership. An individual will be identified as a beneficial owner if he or she directly, indirectly, or both directly and indirectly, owns at least 25% of the charter capital or at least 25% of the total voting shares. Indirect ownership may be held through one or more organizations or other legal arrangements.
In particular, where a group of individuals who are family members or who jointly own shares or capital under an agreement reaches the 25% threshold, those individuals may be identified as beneficial owners. For a partnership, all general partners are identified as beneficial owners, regardless of their ownership percentage or voting rights.
Level 2: Based on actual control
If no individual meets the 25% ownership threshold, or there are grounds to believe that the individual meeting the ownership requirement is not the actual beneficial owner, the company must continue to identify the individual who has ultimate control over the company in practice.
Actual control may be shown in different ways. For example, the right to appoint or remove most members of the management bodies; the right to amend the company’s charter; the right to change the organizational structure; or the right to decide financial, investment, business, reorganization, or dissolution matters.
Level 3: The manager with the highest authority
Only when no individual can be identified under the first 02 levels will the company identify the manager with the highest authority to act on behalf of the company, except for an individual representing state capital.
Therefore, for a Vietnamese company whose direct owner is a foreign company, the company should not automatically declare its General Director as the beneficial owner simply because no individual directly owns 25% or more of the Vietnamese company.
The company should trace the ownership structure and control rights from the Vietnamese company up through the ownership chain. The goal is to identify the individual who ultimately owns or controls the company. This is particularly important for multinational groups, foreign-invested companies, and businesses with multi-layer ownership structures.
3. In what cases may a beneficial owner be subject to exit suspension?
This point needs to be clearly distinguished. Being identified as a beneficial owner does not automatically mean that the individual is responsible for all obligations or all violations of the company.
However, under Article 28 of Decree No. 252/2026/ND-CP, a beneficial owner may be subject to exit suspension in a tax enforcement case. This may apply if the company has tax debts of VND500 million or more, and those debts are overdue by 120 days or more.
There is another situation. Exit suspension may also apply if the tax authority determines that the company is not operating at its registered address. If the company does not restore or terminate its tax identification number within 120 days from the notice, the beneficial owner may fall within the exit suspension rules.
In short, being a beneficial owner does not automatically mean exit suspension whenever the company has a violation. The measure applies only when the legal conditions under tax administration rules are met. This is why companies and relevant individuals should be careful with nominee arrangements, or with ownership structures that do not reflect the real owner or the person with ultimate control.
So, these are the 03 key questions BLawyers Vietnam wanted to share today on beneficial ownership in Vietnam. First, can a company be penalized for failing to declare its beneficial owner? Second, how should the beneficial owner be identified in a multi-layer ownership structure? And third, in what cases may an individual beneficial owner be subject to exit suspension?
We hope today’s discussion gives companies and investors a clearer understanding of beneficial ownership declaration requirements in Vietnam. This is especially relevant for those carrying out company establishment, business registration, or business registration change procedures. More importantly, we hope it helps you identify compliance risks early.
If you have any questions or need support in reviewing your company’s ownership structure, control rights, or beneficial ownership declaration requirements, please leave your questions below or contact BLawyers Vietnam for further assistance.
Thank you and see you next time.
The above is not official advice from BLawyers Vietnam. If you have any questions or suggestions about the above, please contact us at info@blawyersvn.com. We would love to hear from you.
Date: 26 August 2026
