Dear Clients and Partners,
As we move further into 2026, the regulatory landscape in Vietnam has shifted significantly toward global transparency standards. Since the implementation of Decree No. 168/2025/ND-CP last July, the requirements for identifying and reporting Ultimate Beneficial Owners (UBOs) have become a cornerstone of corporate compliance. Driven by Vietnam’s commitment to exiting the FATF "Grey List," the Department of Planning and Investment (DPI) and the State Bank of Vietnam have intensified their scrutiny of corporate control structures.
For many enterprises, particularly those with foreign direct investment (FDI) and complex multi-layered holdings, the "UBO Control Test" has proven to be a significant hurdle. At BLaw Vietnam, we have observed that even the most well-intentioned compliance teams are falling into predictable traps.
In this article, we outline the seven most common mistakes businesses are making with the 2025 UBO regulations and, more importantly, provide actionable solutions to ensure your business remains beyond reproach.
1. The "25% Blind Spot": Equating Ownership with Control
The most frequent error we encounter is the assumption that if no single individual owns 25% or more of the charter capital, the company has no UBO to report. While the 25% ownership threshold is a primary trigger, it is only one half of the "Control Test."
Under the amended Law on Enterprises, an individual is considered a UBO if they exercise "ultimate control" through other means, regardless of their shareholding percentage. This includes the power to appoint the majority of the Board of Directors, veto rights over charter amendments, or the ability to direct the strategic financial and operating policies of the company.
The Fix: Conduct a comprehensive review of your Company Charter, Shareholders’ Agreements, and any "side" investment agreements. Identify individuals who hold "reserved matters" rights. If an individual can block a merger or the appointment of a General Director, they likely meet the UBO criteria.
2. Failing to "Look Through" the Entire Corporate Chain
Many foreign-invested enterprises (FIEs) in Vietnam are subsidiaries of offshore holding companies, which are in turn owned by private equity funds or multinational groups. A common mistake is reporting the immediate parent entity as the "Owner" and stopping there.
The 2025 regulations are explicit: the UBO must be a natural person. You cannot list a BVI company or a Singaporean Holding Ltd. as your UBO. You are required to "look through" every layer of the corporate structure until you reach the individuals at the top.
The Fix: Map out your entire global ownership structure in a visual chart. Request signed "UBO Self-Declarations" from your parent companies. If you are struggling with the basics of this process, refer to our UBO 101 Guide to start the identification process correctly.
3. Missing the 10-Day Reporting Window
In the past, many administrative updates in Vietnam could wait until the end of the fiscal year or until the next major license amendment. Those days are over. Decree 168 mandates that any change in UBO information: including changes in the UBO’s passport number, residential address, or a shift in voting power: must be reported to the Business Registration Division within 10 working days.
Failure to meet this deadline can lead to administrative fines and, more critically, "red flags" in the national business database that can stall your future licensing applications or M&A transactions.
The Fix: Integrate UBO monitoring into your internal corporate governance workflow. Ensure that your global HQ understands that any change at the top must be communicated to the Vietnam legal team immediately.
4. Ignoring the "No UBO Identified" Formal Declaration
What happens if your company is truly widely held (e.g., a public company where no individual reaches the 25% mark and no one has veto control)? Many businesses simply leave the UBO section blank or ignore the filing altogether.
This is a mistake. The law requires a positive declaration. If no UBO can be identified after a diligent search, you must formally declare that no UBO exists and provide the details of the senior managing official (usually the Legal Representative) as the substitute contact point.
The Fix: Document your "Reasonable Measures" search. Keep a record of the analysis that led to the "No UBO" conclusion. Submit the formal declaration to the DPI to demonstrate compliance proactively.
5. KYC and Registry Mismatch: The Bank Consistency Trap
Vietnamese banks are now under intense pressure to verify UBO information as part of their Anti-Money Laundering (AML) obligations. A frequent mistake is providing one set of UBO data to your bank for account opening and a different (or outdated) set to the Business Registration Division.
When the bank performs its periodic review, any discrepancy between their KYC records and the National Business Registration Portal will lead to the freezing of accounts or delays in international fund transfers.
The Fix: Maintain a "Single Version of the Truth." Your UBO master file should be the source for all filings: whether for the DPI, the tax authorities, or your banking partners. At BLaw Vietnam, we help clients synchronize these records to ensure seamless financial operations.
6. Misinterpreting the "Institutional Shareholder" Rule in JSCs
For Joint Stock Companies (JSCs), the 2025 rules added a layer of complexity. JSCs must declare institutional shareholders holding 25% or more of voting shares and then identify the natural persons who control those institutions. We often see JSCs failing to collect the necessary identification documents (passports, proof of address) for the individuals behind these institutional shareholders.
The Fix: If you operate as a JSC, your Shareholder Register must be more than just a list of names. It must be a dynamic database that includes the UBO details of every major institutional investor. This is a critical component of modern tax settlement and compliance strategies.
7. Overlooking Branch and Subsidiary Obligations
A common misconception is that UBO reporting only applies to the "headquarters" or the primary investment project. In reality, the obligation extends to branches registered under the Law on Enterprises. If you have a branch office in Da Nang or Hai Phong, they must also have their UBO information updated and consistent with the parent company in Ho Chi Minh City or Hanoi.
The Fix: Conduct a "Compliance Audit" of all your registered entities and branches in Vietnam. Ensure that every single business code (MSE) under your group's control has a filed and accurate UBO declaration.
How BLaw Vietnam Can Streamline Your Compliance
Navigating the UBO Control Test requires more than just filling out forms; it requires a deep understanding of corporate law, M&A structures, and the current "Clockwork" of Vietnamese administration.
Through our Clockwork 2026 Internal Operational System, BLaw Vietnam ensures that your legal advisory and licensing needs are met with zero-error precision. Our specialized teams provide:
- Structure Analysis: Tracing complex ownership chains to identify natural-person UBOs.
- Gap Analysis: Reviewing your current filings against bank KYC and actual control documents.
- Ongoing Monitoring: Managing the 10-day update window so you never miss a deadline.
The cost of non-compliance in 2026 is no longer just a small fine; it is the risk of operational paralysis and reputational damage. By addressing these seven mistakes today, you secure your business's future in an increasingly transparent market.
Are you confident in your UBO filings?
Contact the expert attorneys at BLaw Vietnam today for a confidential consultation. We are dedicated to providing the excellence and client-focused service your business deserves.
Contact us via blawvn.com/contact to schedule your compliance health check.