New Law on Enterprise

To enhance transparency and meet international anti-money laundering commitments, Vietnam has, for the first time, officially introduced the concept of a Beneficial Owner (BO).

• Definition: A BO is “an individual who has de facto ownership of the charter capital or the right to control the enterprise”.
• Criteria for identifying a BO: Under Article 17 of Decree 168, an individual is considered a BO if they meet either of the following:

(i) Owning directly or indirectly 25% or more of the charter capital or voting shares.

Indirect ownership applies if the person holds 25% or more of the charter capital or voting shares through another company.

Note: The current regulations have not yet clearly stated how this applies in complicated ownership chains (e.g., through multiple layers of companies). This is a potential ambiguity that may require more detailed guidance in the future.

(ii) Having control over the following matters:

- Appointing, dismissing, or removing the majority or all members of the Board of Directors, the chairperson of the Board of Directors, or the chairperson of the Members’ Council; the legal representative, the director or general director of the enterprise;

- Changing the company's charter or management structure;

- Reorganizing or dissolving the company.

• Obligation to declare and retain BO information:

- Enterprises are responsible for declaring information about their BOs when applying for new establishment or registering changes to their enterprise registration content, using the new forms issued under Circular 68.

- Information and the list of BOs must be retained at the enterprise's head office.

• Previously, businesses could submit online registration documents using a public digital signature or a business registration account. These options have now been eliminated.
• From now on, electronic identification accounts will be the only accepted method for submitting enterprise registration documents online. Under the new mechanism, the identities of both the authorizer and the authorized person submitting the application must be electronically authenticated via the national electronic identification system (VNeID) when submitting the enterprise registration application.
• Transition period (until 31 December 2023): Until the end of 2025, businesses can still use their old registration accounts and Level 2 electronic ID accounts. Starting from 1 January 2026, only VNeID accounts (for either the business or the authorized individual) will be accepted for online enterprise registration.
• What Businesses Need to Do:

- Make sure the legal representative of the company registers for a Level 2 electronic ID (VNeID).

- The business itself should also have a valid electronic ID account.

• Detailed guidance on electronic authentication and enterprise registration via electronic identification accounts will be updated and implemented according to announcements on the National Business Registration Portal.

The Amended LOE 2025 has tightened the conditions for the reduction of charter capital for joint-stock companies under Article 112. Previously, a company could return part of the capital to shareholders after two years of continuous operation. Now, any time the company temporarily suspends business will not count toward this two-year requirement.

Example: If a company pauses its operations for 6 months, it must wait 2.5 years from establishment to reduce capital.

Additionally, the law supplements a new case for charter capital reduction: when the company repurchases redeemable preference shares at the request of the shareholders holding such shares.

Previously, the law lacked a clear definition of what the “market price” of shares or capital contributions meant. The Amended LOE 2025 now provides specific methods for calculating this value.

Accordingly, this value will be determined as follows:

• For listed/traded shares, the market price is determined based on one of the following:

(i) The average transaction price on the securities trading system within the 30 consecutive days prior;

(ii) The price agreed upon by the parties; or

(iii) The price determined by a valuation organization.

• For unlisted/untraded capital contributions or shares, the market price is determined based on one of the following:

(i) The transaction price on the market at the immediately preceding time;

(ii) The price agreed upon between the seller and the buyer; or

(iii) The price determined by a valuation organization