On 23 July 2026, the Government of Vietnam issued Decree No. 296/2026/ND-CP (“Decree 296”), amending Decree No. 168/2025/ND-CP on enterprise registration. Effective immediately upon issuance, with no transitional grace period, Decree 296 fundamentally reshapes Vietnam’s enterprise registration regime by introducing a sophisticated beneficial ownership framework based on ultimate natural-person ownership and control, while simultaneously imposing stricter limits on prolonged business suspension.
The most significant development is Vietnam’s adoption of a comprehensive three-tier cascading beneficial ownership identification test combined with a mandatory look-through principle requiring enterprises to trace ownership through every layer of their corporate structure until the ultimate natural person exercising ownership or actual control is identified. The reform aligns Vietnam more closely with international anti-money laundering (“AML”), corporate transparency and beneficial ownership standards and will have significant implications for multinational groups, private equity structures, family businesses, trusts, nominee arrangements and other complex investment structures.
I. Beneficial Ownership – A Fundamental Shift Towards Ultimate Transparency
1. From Formal Shareholding to Ultimate Beneficial Ownership
Decree 296 replaces the previous two-factor approach with a mandatory three-tier cascading test that must be applied sequentially.
A beneficial owner is now defined as one or more natural persons who directly or indirectly own or ultimately exercise actual control over an enterprise with legal personality, excluding persons representing State capital.
This represents an important conceptual shift.
The new regime no longer focuses merely on identifying significant shareholders. Instead, it requires enterprises to determine who ultimately stands behind the ownership chain or exercises real decision-making power, reflecting the international concept of Ultimate Beneficial Ownership (“UBO”) adopted by FATF standards and increasingly implemented worldwide.
This “look beyond the corporate veil” approach significantly increases transparency and makes multilayered ownership structures substantially more visible to the authorities.
Tier 1 – Ownership Test (25%)
The first step requires identifying any individual who directly, indirectly, or through a combination of both methods owns 25% or more of charter capital or voting shares.
Decree 296 introduces several important innovations.
(a) Family Group Aggregation
One of the most noteworthy changes is the introduction of a family aggregation rule.
Where family members (as defined under Article 4.22 of the Enterprise Law) or persons connected through contractual arrangements collectively own at least 25%, every individual within that group becomes a beneficial owner.
This is a significant departure from the previous approach, which focused primarily on individual ownership percentages.
Consequently, family-owned enterprises will frequently have multiple declared beneficial owners even where no single individual individually reaches the 25% threshold.
(b) General Partners
Every general partner in a partnership automatically qualifies as a beneficial owner regardless of capital contribution.
(c) Broader Concept of Indirect Ownership
Indirect ownership now includes ownership through organizations or other legal arrangements, replacing the narrower previous concept limited to ownership through organizations.
This broader wording captures structures involving trusts, nominee arrangements and similar legal vehicles.
Tier 2 – Control Test
Where no individual satisfies the ownership threshold—or where evidence demonstrates that the Tier 1 individual is not the true beneficial owner—the enterprise must proceed to the second tier.
Control exists where an individual possesses one or more rights to:
- appoint or remove the majority or all members or chairperson of the Board of Directors or Members’ Council or the General Director;
- amend the company’s charter;
- determine organizational structure;
- decide financial, investment or operational policies; or
- approve enterprise reorganization or dissolution.
Importantly, Decree 296 expressly recognises that formal ownership may not always reflect actual control, thereby allowing authorities to identify the individual exercising genuine influence over the enterprise.
Tier 3 – Senior Management Fallback
Where neither ownership nor control identifies an individual, the enterprise must declare the senior managing individual having the greatest authority to act on behalf of the enterprise (excluding State capital representatives).
Accordingly, every enterprise will ultimately be required to identify and declare at least one beneficial owner.
2.Mandatory Look-Through Analysis
Perhaps the most significant innovation introduced by Decree 296 is the statutory look-through obligation.
Enterprises are now expressly required to examine every level of the ownership structure until the ultimate natural person exercising ownership or actual control is identified.
Where ownership passes through a legal arrangement recognised under Vietnam’s AML legislation, the beneficial owner of that arrangement must be determined under the AML rules.
This requirement significantly increases due diligence obligations for:
- multinational corporate groups;
- private equity funds;
- investment holding companies;
- family offices;
- trusts;
- nominee structures; and
- cross-border investment vehicles.
Simple shareholder registers will no longer be sufficient where ownership extends through multiple intermediate entities.
3.Mandatory Sequential Declaration Process
Decree 296 also codifies a mandatory declaration sequence.
Enterprises must declare beneficial owners in the following order:
Step 1: Individuals satisfying the Tier 1 ownership test.
Step 2: If Tier 1 is unavailable or evidence shows the declared person is not the true beneficial owner, individuals satisfying the Tier 2 control test.
Step 3: If neither Tier 1 nor Tier 2 applies, the most senior managing individual.
This sequential methodology leaves little discretion for enterprises and creates a clear compliance roadmap.
II.Temporary Business Suspension – Significant Tightening of Compliance
1.New Maximum Consecutive Suspension Period
Decree 296 also introduces an important limitation on business suspension.
Previously, each suspension notification could not exceed twelve months, but enterprises could repeatedly extend suspensions without any express overall limitation.
That practice now ends.
Although each notification remains limited to twelve months, the aggregate consecutive suspension period may not exceed twenty-four months.
This prevents enterprises from remaining inactive indefinitely while maintaining enterprise registration.
2.Mandatory Confirmation of Business Resumption
Another major procedural change is the introduction of a mandatory business resumption confirmation.
Within five working days after expiry of the notified suspension period, the legal representative must:
- confirm business resumption; and
- certify that all enterprise registration obligations have been fulfilled,
through the National Enterprise Registration Information System.
Failure to do so initiates an escalating enforcement process.
Within ten working days thereafter, the provincial business registration authority must issue a written request for a report under Article 216(1)(c) of the Enterprise Law while simultaneously notifying the tax authority.
If the enterprise fails to submit the required report within six months, the Enterprise Registration Certificate may be revoked.
Importantly, enterprises remain obliged to notify or register changes to enterprise registration information throughout the suspension period.
3. Transitional Rules
The new twenty-four-month cap applies retrospectively.
Accordingly:
- enterprises already under suspension must include previous suspension periods when calculating the twenty-four-month limit;
- enterprises already exceeding twenty-four consecutive months cannot obtain further suspension once the current notified period expires.
The new business resumption confirmation requirement applies only to suspension notices submitted after Decree 296 became effective.
III. Practical Implications for Investors and Businesses
The reforms represent one of Vietnam’s most significant corporate transparency initiatives in recent years.
The introduction of mandatory look-through analysis substantially increases compliance expectations, particularly for enterprises with sophisticated ownership arrangements.
Foreign-invested enterprises, multinational groups, investment funds, family-owned businesses and enterprises using intermediary holding companies should expect considerably more extensive beneficial ownership analysis than previously required.
The new family aggregation rules may result in multiple beneficial owners being reportable even where no individual shareholder independently owns 25%.
Equally significant is the explicit recognition that beneficial ownership is not determined solely by legal ownership but also by actual control, bringing Vietnam closer to internationally accepted AML and corporate transparency principles.
IV.Recommended Actions
Enterprises, particularly those with foreign investment, multi-layered ownership structures or family-controlled businesses, should promptly:
- Review existing beneficial ownership declarations against the new mandatory three-tier cascading test and update enterprise registration filings where necessary.
- Analyze family relationships and contractual arrangements among shareholders to determine whether aggregation results in multiple reportable beneficial owners.
- Conduct a comprehensive look-through review of all ownership layers—including holding companies, trusts, nominee arrangements and other legal structures—to identify the ultimate natural person exercising ownership or actual control.
- Review governance arrangements to determine whether any individual may qualify as a beneficial owner through control rights rather than ownership.
- Monitor suspension periods carefully to ensure the aggregate consecutive suspension period does not exceed twenty-four months and establish internal procedures for timely submission of the mandatory business resumption confirmation.
Conclusion
Decree 296 marks a decisive evolution in Vietnam’s corporate transparency framework. The introduction of a mandatory three-tier beneficial ownership regime, combined with statutory look-through obligations and recognition of ultimate actual control, signals a clear policy shift from identifying nominal shareholders to identifying the natural persons who genuinely own or control enterprises. This brings Vietnam significantly closer to international best practices on beneficial ownership transparency, anti-money laundering compliance and corporate governance.
For many enterprises, particularly foreign-invested companies and businesses operating through complex domestic or cross-border holding structures, compliance will no longer be a simple filing exercise. It will require a substantive legal analysis of ownership chains, governance arrangements, family relationships and control rights. Companies that proactively review their ownership structures and update their beneficial ownership declarations will be best positioned to meet the new regulatory expectations and minimize future compliance risks.
Please do not hesitate to contact Dr. Oliver Massmann (the architect of market access) under [email protected] if you have any questions or require further information regarding the above. Dr. Oliver Massmann is the General Director of Duane Morris Vietnam LLC.