On 23 July 2026, the Government of Vietnam issued Decree No. 296/2026/ND-CP, effective from the same date (“Decree 296“), which amends Decree No. 168/2025/ND-CP on enterprise registration by introducing detailed provisions on UBO identification and declaration. Most significantly, Decree 296 replaces the former “if any” framework, under which enterprises declared a UBO only where one was readily apparent, with a mandatory process requiring enterprises to proactively identify and declare their UBO(s).
Set out below are the key highlights of the three-step sequential process for identifying the UBO(s) of an enterprise.
Identification Obligation
Decree 296 requires an enterprise to identify its UBO by conducting a layer-by-layer review of its ownership structure at each level until the individual exercising ultimate ownership or de facto control is identified. Where a legal arrangement subject to anti-money laundering law exists within the ownership structure, the beneficial owner of that arrangement is determined in accordance with applicable anti-money laundering legislation.
Under Decree 296, the UBO of an enterprise is one or more individuals who directly or indirectly own, or ultimately exercise de facto control over, that enterprise, excluding individuals representing state capital.
Three-Step Sequential Identification Process
Under Decree 296, UBO identification and declaration must follow the sequential order below:
Step 1 – Ownership threshold: Any individual who, directly, indirectly, or through a combination of both, holds 25% or more of the charter capital or of the total voting shares is a UBO. An indirect holding is one held through other organizations or legal arrangements.
In cases where a group of individuals is related by family, or by contract, and they jointly hold, directly or indirectly, or both directly and indirectly, 25% or more of the enterprise’s charter capital or 25% or more of the enterprise’s total voting shares, the enterprise shall identify the individuals in this group as the enterprise’s UBOs.
For a partnership, all partners are the enterprise’s UBOs, regardless of their proportion of charter capital contribution or voting rights in the enterprise.
Step 2 – De facto control: If no individual meets the Step 1 threshold, or if there is evidence that the individual identified under Step 1 is not the true UBO, the enterprise must identify the UBO on the basis of actual control. Control may be exercised through one or more of the following rights:
- appointing, dismissing, or removing a majority or all members, or the chairperson, of the Board of Directors or Members’ Council, or the Director or General Director;
- amending the enterprise’s charter;
- changing the organizational structure;
- deciding the enterprise’s financial, investment, and operational policies; and
- reorganizing or dissolving the enterprise.
Step 3 – Enterprise manager: If no individual satisfies the criteria in Steps 1 or 2, the enterprise must identify the enterprise manager with the greatest authority to act on its behalf as the UBO (excluding individuals representing state capital). For reference, the Law on Enterprises 2020 (as amended) provides that an “enterprise manager” notably includes the members and chairperson of the Board of Directors or Members’ Council, the President of the enterprise, the Director or General Director, and other individuals holding management positions as specified in a company’s charter.
UBO Declaration and Notification Timeline for Enterprises
- Enterprises established on or after 1 July 2025: the founders must declare and notify the enterprise’s UBO(s) information at the time of enterprise registration (Article 18.1 of Decree No.168/2025/ND-CP, as amended by Decree 296).
- Enterprises established before 1 July 2025:
- If the enterprise has not previously declared its UBO(s), or has declared that it has none: the enterprise must supplement its UBO(s) information when carrying out its most recent procedures for registration or notification of changes to its enterprise registration details (Article 44.6 of Decree No. 122/2021/ND-CP as amended by Decree No. 288/2026/ND-CP).
- If the enterprise has previously declared its UBO(s) but a subsequent change of UBO(s) occurs:the enterprise must notify the business registration authority of the change within 10 days from the date the change occurs (Article 52.1 of Decree No.168/2025/ND-CP)
For further information or specific guidance on how these regulatory changes may affect your investment activities in Vietnam, please do not hesitate to contact DFDL. This article was co-authored by Thuy Ngan Nguyen.
The information provided here is for information purposes only and is not intended to constitute legal advice. Legal advice should be obtained from qualified legal counsel for all specific situations.
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