Dear Clients and Partners,
In the current global financial landscape of 2026, transparency is no longer a luxury, it is a prerequisite for doing business. Since Vietnam was placed on the Financial Action Task Force (FATF) "Grey List" (Jurisdictions under Increased Monitoring), the scrutiny surrounding Ultimate Beneficial Ownership (UBO) has intensified. For enterprises with foreign investment and local organizations alike, the failure to accurately disclose who truly pulls the strings can lead to more than just administrative fines; it can result in frozen bank accounts, rejected international transfers, and severe reputational damage.
At BLaw Vietnam, we have observed that many businesses operate under a false sense of security, relying on outdated compliance models that no longer satisfy the 2025 Enterprise Law or the 2026 AML (Anti-Money Laundering) directives. To help you navigate this complex regulatory environment, we have identified the seven most critical mistakes companies make with UBO disclosures and how you can optimize your internal processes to remain compliant.
1. Confusing Legal Ownership with Beneficial Ownership
The most common error we encounter is the belief that a list of direct shareholders is equivalent to a UBO disclosure. While a shareholder holds legal title to equity, a Beneficial Owner is always a natural person who ultimately owns or controls the entity.
In Vietnam, the threshold is typically set at 25% or more of equity or voting rights. However, if your immediate shareholder is another corporation or an offshore holding company, you cannot stop there. You must "look through" every corporate layer until you reach an individual. Stopping at the first layer of ownership is a significant red flag for regulators and banks performing Enhanced Due Diligence (EDD).
For a deeper dive into the basics, please refer to our UBO 101: A Beginner's Guide to Identifying Beneficial Owners.
2. Failing to Map the Entire "Chain of Ownership"
Complexity is often used as a tool for obfuscation, which is exactly why the FATF and Vietnamese authorities demand a clear map of the ownership chain. Many businesses fail to document the intermediate entities in a multi-jurisdictional structure.
If your Vietnamese subsidiary is owned by a Singaporean holding company, which is in turn owned by a Cayman Islands trust, you must provide the documentation for every link in that chain. Missing even one link can trigger a non-compliance report. To streamline this process, we recommend maintaining a "Live Ownership Map" that is updated in real-time following any restructuring or capital injection.
3. Ignoring "Control via Other Means"
The law explicitly states that a UBO is not just someone with 25% equity, but also anyone who exercises effective control over the customer. We often see clients overlook individuals who:
- Hold veto rights over major corporate decisions.
- Have the power to appoint or remove the majority of the Board of Directors.
- Exert dominant influence through shareholder agreements or family ties.
If no single person meets the 25% ownership threshold, the responsibility falls on the Senior Managing Official (such as the CEO or Chairman). Failing to identify and disclose these "hidden" controllers is a mistake that frequently surfaces during Transfer Pricing Audits and corporate governance reviews.
4. Relying on Static or Outdated Information
A UBO disclosure is not a "one and done" task. Under the 2025 Enterprise Law, companies are required to update their information within strict timelines following any material change.
Many businesses fail to update their UBO records when:
- A minority shareholder sells their stake, pushing another owner above the 25% threshold.
- A new Power of Attorney is granted that shifts effective control.
- The personal details (passport number, address) of a UBO change.
In the eyes of the State Bank of Vietnam and international financial institutions, outdated information is as good as incorrect information.
5. Errors in the National Business Registration Portal
As part of our Licensing and Administrative services, we frequently assist clients in correcting errors made during the online filing process. Small discrepancies between the physical corporate documents and the data entered into the National Portal can cause significant delays.
Mistakes such as misspelled names, incorrect passport issuance dates, or failing to upload the latest Charter can result in your profile being flagged. At BLaw Vietnam, our "Clockwork" internal system utilizes a zero-error filing checklist to ensure that every digit and character matches the original documentation exactly.
6. Lack of Internal "Logic Memos"
When a bank or a regulator asks why you identified a specific person as the UBO, can you provide a documented audit trail? Many organizations identify the correct person but fail to keep the supporting evidence: such as the board resolutions, shareholder registers, or the analysis memo explaining why a certain individual was excluded.
Maintaining a "UBO Logic Memo" is essential for staying off the FATF Grey List. It proves to auditors that you have performed your due diligence in good faith and according to a risk-based approach.
7. Disregarding the Global Regulatory Context (FATF Grey List)
The final mistake is treating UBO disclosure as a purely local administrative burden. Because Vietnam is currently under increased monitoring by the FATF, every transaction leaving the country is viewed through a lens of high risk.
International banks are now applying Enhanced Due Diligence (EDD) to all Vietnamese entities. If your UBO disclosure is incomplete or suspicious, your global partners may find it too "costly" or "risky" to continue the relationship. Understanding that your local compliance directly affects your global scalability is vital for any modern enterprise.
How BLaw Vietnam Can Help You Optimize Your Compliance
The regulatory landscape of 2026 demands a proactive rather than a reactive approach. Through the above article, it is clear that UBO disclosure is a multifaceted obligation that intersects with corporate law, tax planning, and international finance.
At BLaw Vietnam, our knowledgeable attorneys provide a comprehensive suite of services to ensure your business remains beyond reproach:
- Corporate Health Checks: We conduct a thorough review of your current ownership structure and disclosure filings.
- SOP Development: We help you implement internal Standard Operating Procedures (SOPs) to track and update UBO information automatically.
- Advisory Logic: We draft the necessary internal memos and justifications to satisfy even the most rigorous bank audits.
- Administrative Filings: Our Licensing team ensures that your data on the National Portal is 100% accurate and up-to-date.
Navigating the FATF Grey List requirements doesn't have to be a bottleneck for your business growth. By addressing these seven mistakes, you can build a foundation of transparency that enhances your credibility with investors, regulators, and international partners.
Are you confident in your current UBO disclosures? Do not wait for a rejected transaction or a regulatory audit to find out. We invite you to reach out to our team today for a confidential consultation. Let us help you streamline your compliance and protect your business’s future in Vietnam.
Best regards,
Long (Realtor) & The BLaw Vietnam Team
Excellence in Legal Services & Corporate Governance