Dear Clients and Partners,
Transparency is no longer an optional "best practice" in Vietnam: it is a legal mandate. With the full implementation of the Amended Law on Enterprises 2025 and the detailed guidance of Decree 168, the corporate landscape has shifted. For businesses operating in 2026, identifying and disclosing your Ultimate Beneficial Owners (UBO) is now a critical component of corporate governance.
Failure to comply doesn't just result in administrative fines; it can paralyze your ability to amend business licenses, open bank accounts, or even remit profits abroad. As we navigate the complexities of this new regime, we have identified seven recurring mistakes that businesses: particularly foreign-invested enterprises (FIEs): frequently make.
Through the following article, BLaw Vietnam aims to demystify these requirements and provide a clear roadmap for your continued compliance.
1. The "First Layer" Fallacy: Treating Only Direct Shareholders as UBOs
The most common mistake we see is companies stopping their search at the first layer of ownership. If a Vietnamese subsidiary is owned by a Singaporean holding company, many managers believe they only need to list the Singaporean entity.
The Reality: A UBO must be a natural person. Under the 2025 Law, you are required to "look through" every corporate layer until you reach the individuals who ultimately own or control 25% or more of the charter capital or voting shares.
If your corporate structure involves multiple tiers across different jurisdictions, you must document the entire chain. To understand the basics of this process, you can refer to our UBO 101: A Beginner's Guide.
2. The "Ownership vs. Control" Oversight
Many businesses assume that if no single individual holds 25% of the shares, they have no UBO to disclose. This is a dangerous assumption.
The Reality: The 2025 Enterprise Law defines a UBO not just by ownership, but by control. An individual is a UBO if they have the power to:
- Appoint or remove the majority of the Board of Directors or Members’ Council.
- Exercise "golden share" rights or veto powers over key strategic decisions.
- Directly influence management through contractual arrangements or nominee agreements.
Ignoring these "shadow directors" or influential controllers is a major compliance red flag. We recently explored how the 2025 law changes the way you disclose control, which is essential reading for complex corporate structures.
3. Missing the "Next Registration Change" Deadline
Existing companies (those registered before July 1, 2025) often mistakenly believe they have no UBO obligations until a separate government decree specifically calls for them.
The Reality: While there is no "one-off" retroactive deadline for everyone, the law triggers the UBO disclosure requirement at the very first registration amendment you make after July 1, 2025. Whether you are changing your legal representative, updating your business lines, or adjusting your charter capital, you must submit a full UBO List as part of that dossier.
Waiting until the last minute to map your ownership structure can delay your entire registration process. If you are planning an update, see our guide on how to update your company registration.
4. Ignoring the 10-Day Clock for Changes
In 2026, speed is of the essence. Once your UBO is identified or a change in ownership/control occurs, the clock starts ticking.
The Reality: You have exactly 10 days from the date the change occurs (or the UBO is identified) to notify the Business Registration Authority (BRA). Many companies wait for their annual internal audit or quarterly compliance review, which inevitably leads to late filings and potential sanctions.
Establishing an internal "trigger" mechanism is vital. Any transfer of shares or change in voting rights should automatically alert your legal team to update the UBO register.
5. Data Inconsistency Between Banks and the BRA
Anti-Money Laundering (AML) regulations in Vietnam have become increasingly stringent. Banks now perform their own independent UBO verification.
The Reality: A common mistake is providing one set of UBO data to the BRA and a slightly different version to your bank (often due to different definitions used by international headquarters). If these records do not match, it can lead to "frozen" accounts or blocked international capital injections.
Maintaining a single, centralized UBO Register that is consistent across all filings: including tax settlement records: is the only way to ensure smooth operations.
6. The "Form Over Substance" Omission
When filling out UBO forms under Decree 168, businesses often leave "minor" fields blank, such as the UBO's ethnicity, full ID history, or the specific nature of their control.
The Reality: Vietnamese authorities are increasingly pedantic. An incomplete dossier is a rejected dossier. You must provide:
- Full legal name, date of birth, and gender.
- Nationality and ethnicity (as per legal ID).
- Detailed ID/Passport information.
- A clear description of how the individual exercises control (if they own less than 25%).
Accuracy at the drafting stage saves weeks of back-and-forth with government departments.
7. Underestimating the Legal Representative’s Liability
Finally, many Legal Representatives sign UBO disclosure forms without fully understanding the underlying structure, assuming it is a routine administrative task.
The Reality: The Legal Representative is personally responsible for the accuracy of the UBO information filed. In 2026, providing false or misleading UBO data can lead to personal administrative fines and significantly damage the individual's reputation with Vietnamese regulators.
We recommend that all Legal Representatives require a written "UBO Verification Memo" from their legal or compliance team before signing any filings.
How to Stay Compliant: A 2026 Checklist
To ensure your business remains on the right side of the law, follow these streamlined steps:
- Map the Tree: Create a visual ownership chart down to the last natural person.
- Verify Control: Review your Charter and Shareholder Agreements for veto rights or board appointment powers.
- Align Records: Ensure the UBO data in your IRC/ERC filings matches what your bank and tax authorities have on file.
- Secure Documentation: Collect notarized passport copies or IDs for every identified UBO.
- Monitor the Clock: Set a 10-day internal deadline for any changes in ownership or control.
How BLaw Vietnam Can Support You
Navigating UBO disclosures in a multi-layered, cross-border environment is challenging. At BLaw Vietnam, our knowledgeable attorneys specialize in corporate governance and regulatory compliance. We provide:
- UBO Audits: A thorough review of your corporate structure to identify all reportable individuals.
- Dossier Preparation: Drafting accurate, compliant UBO lists in accordance with Decree 168.
- Legal Representative Support: Providing the necessary due diligence to protect your leadership from personal liability.
In addition to our governance services, we offer comprehensive support in Tax Settlements, M&A, and Intellectual Property, ensuring your business is protected from every angle.
Don't wait for your next registration change to find out your UBO data is incomplete.
Contact the experts at BLaw Vietnam today for a consultation and let us help you optimize your compliance framework for 2026 and beyond.
