What's Happening?
Vietnam has introduced new regulations under Decree 168/2025/ND-CP and Circular 68/2025/TT-BTC, effective from July 1, 2025, to guide the disclosure of beneficial ownership (BO) in enterprises. These regulations require enterprises to identify individuals who have actual ownership or control over the enterprise, excluding state representatives of wholly state-owned enterprises. The criteria for BO include holding at least 25% of the charter capital or having control over key management decisions. Enterprises must disclose BO information at incorporation or when updating registration details, and maintain records of BOs. The regulations aim to align with the Financial Action Task Force recommendations, although some differences remain.
Why It's Important?
The implementation of these regulations is significant for Vietnam's business environment as it enhances transparency and aligns with international standards to combat money laundering and financial crimes. Enterprises face new obligations to disclose and maintain records of beneficial owners, which could impact administrative processes and compliance costs. Investors and stakeholders must navigate these changes, potentially affecting mergers and acquisitions and investment strategies. The regulations also raise concerns about data privacy and the ability of enterprises to obtain necessary information from stakeholders.
What's Next?
As Vietnam's beneficial ownership regime is still developing, enterprises, investors, and beneficial owners should closely monitor legal developments to ensure compliance. The government is expected to issue specific penalties for non-compliance, which could affect enterprise operations. Enterprises may need to implement internal policies to gather BO information, while stakeholders must consider the implications of these regulations on their business dealings. The ongoing evolution of these regulations will likely influence Vietnam's attractiveness to foreign investors and its alignment with global financial standards.
Beyond the Headlines
The new regulations may lead to broader discussions on data privacy and the balance between transparency and confidentiality in business operations. Enterprises may face challenges in identifying BOs due to complex ownership structures and informal control arrangements. The regulations could also influence corporate governance practices and the role of senior management in strategic decision-making. As Vietnam continues to refine its approach to beneficial ownership, the long-term impact on its legal and business landscape remains to be seen.
