Other BriefingsVietnam Enterprise Law: Key Amendments in 2025
Vietnam’s National Assembly has passed amendments to the Enterprise Law, which took effect on July 1, 2025. The Amended Law on Enterprises 2025 introduces various regulatory reforms aimed at transparency, strengthening corporate governance, and ensuring Vietnam’s legal framework aligns with global anti-money laundering standards.
Beneficial ownership disclosure is now mandatory
The amended law prescribes the requirements for beneficial ownership. Accordingly, enterprises must disclose the individuals who ultimately control or benefit from the company, excluding state representatives in wholly state-owned firms. Under the revised rules, all companies must note that:
- Companies need to submit beneficial owner information at the time of business registration. This includes name, nationality, ownership stake, and identification details;
- Companies must report changes to beneficial ownership within 10 days (except for listed companies and companies registered for securities trading);
- Firms must store this information for at least five years after dissolution or bankruptcy; and
- Government agencies have unrestricted access to this data for enforcement and anti-money laundering oversight.
For existing companies, disclosures on beneficial ownership are required the next time they modify their business registration.
This change brings Vietnam closer to international standards set by the Financial Action Task Force (FATF). The FATF placed Vietnam on its “grey list” in 2023 due to insufficient controls around financial transparency.
However, the law has yet to specify a clear threshold for ascertaining who qualifies as a beneficial owner. Previous decrees suggest that ownership or control of 25 percent or more of capital or shares may meet the definition.
The law also introduces a broader concept of control, which could include decision-making rights over important appointments or the company’s charter changes. This ambiguity may create compliance challenges for businesses, especially in cases involving layered ownership or nominee arrangements.
Read more: Vietnam’s Tax and Transfer Pricing Compliance: New Regulations in VAT Law
Impact on nominee arrangements and investment structures
The cumulative effect of these reforms is a clampdown on so-called "disguised" ownership structures. Nominee arrangements, which are common in markets with foreign ownership restrictions, may no longer be viable under the new disclosure regime. Enterprises now have to be prepared to trace and verify ownership chains, even in complex or indirect setups.
The government can demand beneficial ownership data from firms and share it across departments for anti-money laundering or enforcement purposes. So, investors using offshore vehicles or informal agreements are now at greater risk of scrutiny and government actions.
Rules against capital misrepresentation have been strengthened
Another focus area of the amended law is the prohibition of false declarations regarding charter capital. The law now defines false declarations to include situations where a company registers capital it does not contribute in full and fails to update its records accordingly, as well as situations where it falsely values contributed capital assets.
Legal representatives may be held liable for inaccurate filings, making it critical for companies to maintain truthful and up-to-date records. The intention is to curb the practice of inflating capital figures without actual financial backing.
It is better for companies if they can ensure that all declared charter capital is fully contributed. Even minor discrepancies, such as amounts lost due to bank transfer fees, may be subject to administrative penalties under the new rules.
Debt-to-equity cap for private bond issuers
The amended law also introduces a debt-to-equity ceiling of 5:1 for non-public joint stock companies that issue corporate bonds. This ratio will be calculated based on audited financial statements from the year prior to the year of issuance. The government wants to control excessive leverage and default risk in Vietnam’s corporate bond market.
There are some exceptions to this rule. It is applicable to state-owned enterprises, real estate developers, banks, insurers, and securities firms, as well as offerings disclosed to the stock exchange prior to July 1, 2025. These issuances will remain under the previous legal framework.
Revised market valuation standards
The amended law has some guidelines on determining the market value of capital contributions and share transfers. They are:
- For listed shares, the market price is now defined as the average trading price over the 30 days preceding the valuation date; and
- For unlisted shares, it may be based on the most recent transaction price, mutual agreement, or appraisal by a licensed valuer.
These changes have replaced the past reliance on single-day trading prices, which were prone to manipulation and volatility.
For a better administrative process, provincial authorities are tasked with post-registration oversight rather than prior approval. Under the new framework, local People’s Committees will be responsible for registration checks and information-sharing across agencies.
E-ID requirement for online transactions
As of July 1, 2025, all enterprises are required to register for an electronic identification (e-ID) account to conduct administrative processes online. This account needs to be set up using the VNeID application, and either the legal representative or an authorized employee must hold a Level 2 e-ID account.
Foreign legal representatives may encounter practical challenges when registering for a VNeID due to current system limitations. Currently, Vietnam has only introduced a Level 2 e-ID registration procedure for foreigners holding permanent or temporary residence cards. Guidance for other cases is expected to be announced soon. Until the issue is resolved, foreign-invested companies are expected to continue using existing channels for tasks such as tax filing.
For instructions on applying for Vietnam’s Level 2 e-ID accounts, please see: E-ID Registration Guide for Foreign Residents in Vietnam
What it means for compliance and cost
Meeting these new requirements will likely increase compliance costs, particularly for foreign businesses with complex ownership structures. Companies may need to establish new procedures for monitoring, storing, and updating ownership data, as well as assign resources to handle regulatory filings and audits.
Despite these challenges, the reforms are expected to improve investor confidence in Vietnam by promoting a more transparent and accountable business environment.
What businesses can do now includes:
- Conducting a compliance review: Firms can reassess ownership structures and capital declarations;
- Preparing for beneficial ownership reporting: Companies need to understand who qualifies and how to collect verifiable data;
- Monitoring for implementing decrees: Several details, such as thresholds and penalties, will be clarified through upcoming government guidelines. They will be updated in this article; and
- Seeking legal counsel: Firms are encouraged to consult with legal experts, particularly for mergers and acquisitions (M&A) or restructuring deals, as new rules could require re-documentation.
In short
The Amended Law on Enterprises has brought a fundamental shift in Vietnam’s corporate landscape. While the changes may pose short-term challenges, they ultimately serve Vietnam’s long-term goal of creating a transparent, efficient, and internationally attractive business environment.
See also: Vietnam Personal Data Protection Law: Latest Developments and Insights
This article first appeared on Vietnam Briefing, our sister platform.
