On 17 June 2025, the National Assembly of Vietnam passed the Law No. 76/2025/QH15 on supplementing and amending a number of articles of the Law on Enterprises No. 59/2020/QH14 as amended (“the Amended LOE”). The Amended LOE took effect on 01 July 2025. Below are some notable key points of the Amended LOE.
1. Beneficial Owner
The Amended LOE introduces the term “beneficial owner” of an enterprise (“BOE”), defining it as “an individual having a right to actually own the charter capital or having a right to control such enterprise, except the case of a person representing the direct owner at an enterprise with 100% of charter capital being owned by the State and a person representing the state capital contribution in a joint stock company or a multi-member limited liability company in accordance with the laws on management and investment of state capital in enterprises“.
Decree No. 168/2025/ND-CP further elaborates on the definition and provides that a BOE refers to an individual who satisfies one of the following criteria:
- Any individual directly or indirectly owning 25% or more of the charter capital or the total voting shares of an enterprise. Indirect ownership refers to the ownership through another organization;
- Any individual having the right to control the approval of at least one of the following matters of an enterprise: (i) appointment, removal or dismissal of the majority or all of members of board of directors, chairman of board of directors, chairman of members’ council, legal representative, director or general director of the enterprise; (ii) amendment to the enterprise’s charter, (iii) changes to structure of the enterprise’s organization and management, and (iv) reorganization or dissolution of the enterprise.
Importantly and relevant to the definition of BOE, the regulations require a person registering an enterprise or the enterprise itself to make certain disclosures of information regarding such enterprise’s BOE(s) and any organization owing 25% or more of the total voting shares (in the case of a joint stock company) to the provincial business registration authority (“BRA“) at the time of registering the enterprise and within 10 days from any change to such information.
Enterprises established prior to 1 July 2025 are not required to immediately disclose information of its BOE(s) and relevant shareholder(s), but can do so when any change to their enterprise registration contents (such as business lines, legal representative, shareholder, etc.) are registered.
The intent behind the disclosure requirements is still to be confirmed through further regulatory guidance, but is likely related to the Vietnam’s push to align with global anti-money laundering and counter-terrorism financing standards and to improve the monitoring ability of authorities for governance and investment climate improvements.
2. Changes to certain prohibited acts
The Amended LOE adds “false declaration” of registered enterprise contents to the list of prohibited acts.
In addition, the “inflated declaration” of charter capital (i.e., one of the current prohibited acts) is now clearly defined to refer to either (i) failing to fully contribute the registered amount of charter capital without registering its decrease, or (ii) intentionally misvaluing assets contributed as capital in kind.
3. Stricter conditions for private placement of bonds
The Amended LOE adds a new condition for bond private placements by a non-public joint stock company by providing that such company’s payable liabilities, including the value of the bonds proposed for private placement, must not exceed five times its owner’s equity amount recorded in the company’s latest audited annual financial statement.
This new condition does not apply to (i) state-owned enterprises, enterprises conducting bond private placements for funding real estate projects, credit institutions, insurance enterprises, re-insurance enterprises, insurance brokerage enterprises, securities companies, and securities investment fund management companies, and (ii) the tranches of bond private placements of which a disclosure has been made to a stock exchange prior to 1 July 2025.
4. Clearer definition of market value of shares and capital contributions
The Amended LOE provides a clearer and more specific definition of “market price of share or capital contribution”, particularly in relation to shares being listed or registered for trading on the securities trading system. The Amended LOE defines it as:
- in respect of shares listed or registered for trading on the securities trading system, the average trading price within 30 days immediately preceding the valuation date or the price mutually agreed upon by buyer and seller or the price determined by a valuation organization; or
- in respect of other cases, the market trading price at an immediately preceding time or the price mutually agreed upon by buyer and seller or the price determined by a valuation company.
Should you have any questions relating to the Amended LOE or require assistance with legal matters, please feel free to contact DFDL.
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.
