Dear Clients and Partners,
In the evolving regulatory landscape of Vietnam, transparency is no longer a luxury: it is a mandatory standard. With the full implementation of the 2025 Law on Enterprise and the recent transition to standardized reporting under Circular 68, the Vietnamese government has significantly tightened its grip on Beneficial Ownership (BO) disclosures. For many enterprises, particularly those with Foreign Direct Investment (FDI) or complex corporate structures, maintaining these records has become a source of administrative friction and, unfortunately, costly errors.
The "Beneficial Owner" is essentially the natural person who ultimately owns or controls a business. While the concept seems straightforward, the technical execution of record-keeping is where many compliance officers stumble. Failure to accurately maintain these records at your head office or failing to update the National Business Registration Portal can result in heavy administrative fines and complications during annual audits.
To help you navigate these shifts, BLaw Vietnam has identified the seven most common mistakes businesses make regarding BO record-keeping and, more importantly, how you can fix them to ensure your operations remain fully compliant.
1. Confusing Legal Representatives with Beneficial Owners
The most frequent error we encounter is the assumption that the Legal Representative (General Director or Chairman) is automatically the Beneficial Owner. While the Legal Representative holds the power to sign documents and represent the company, the Beneficial Owner is defined by ownership and ultimate control.
The Mistake: Recording only the Legal Representative in the internal BO register, even when the company is owned by a parent corporation or a group of individual investors.
The Fix: You must look through the corporate veil. Under the Law on Enterprise, a Beneficial Owner is typically an individual who holds 25% or more of the shares or has the power to appoint the majority of the Board of Directors. Your record-keeping must identify the natural person at the top of the chain, not just the local manager.
2. Using Outdated Templates During the Circular 68 Transition
As of 2025, the Ministry of Planning and Investment (MPI) and the Ministry of Finance have standardized the forms required for declaring beneficial ownership. The transition to Circular 68 forms has caught many businesses off guard.
The Mistake: Using internal spreadsheets or old declaration forms that do not mirror the specific data fields required by Circular 68. This often leads to "incomplete data" flags during inspections.
The Fix: Immediately audit your registration documents. Ensure that your BO declarations follow the prescribed format of Circular 68. These forms require specific details such as the date of birth, nationality, permanent residence, and the specific nature of the control exercised by the owner. You can find updated guidance on these requirements at our legal blog.
3. Neglecting to Keep Physical Records at the Head Office
One of the most dangerous misconceptions is that since BO data is submitted electronically to the National Business Registration Portal, physical records are no longer necessary.
The Mistake: Keeping BO records only in a digital format or at the residence of a shareholder, rather than at the company’s registered head office in Vietnam.
The Fix: The 2025 Law on Enterprise explicitly requires that BO information and supporting documents (such as ID copies and share certificates) be maintained at the company’s head office. During a random inspection or a tax audit, authorities will demand to see these physical files. Ensure your "Compliance Folder" at the head office is updated and readily accessible to authorized officers.
4. Inadequate Verification of Identity Documents
A BO register is only as valid as the documents that support it. We often see files that contain expired or uncertified documents.
The Mistake: Storing blurry scans of passports, expired National ID cards, or non-legalized documents for foreign beneficial owners.
The Fix:
- For Vietnamese Owners: Use valid, unexpired CCCD (Citizen Identity Cards) and ensure they match the data on the VNeID system.
- For Foreign Owners: Use passports with at least 6 months of validity. For documents issued abroad, ensure they are properly consularly legalized and translated into Vietnamese by a certified agency.
5. Failing to Update Changes Within the Statutory Deadline
Beneficial ownership is not a "set it and forget it" task. Changes in shareholding, the death of a shareholder, or a change in the parent company’s board can all trigger a requirement to update your records.
The Mistake: Waiting until the end of the fiscal year or the next Annual General Meeting (AGM) to update the BO register after a change has occurred.
The Fix: Under current regulations, most changes to corporate information must be updated within 10 days. Establish an internal protocol where any change in ownership exceeding 1% or any change in the control structure is immediately reported to your legal department to trigger an update to the BO record.
6. Overlooking Indirect Control and "Acting in Concert"
Many businesses fail to account for individuals who exercise control through means other than direct shareholding.
The Mistake: Only recording individuals who appear on the Cap Table (the list of shareholders). This ignores individuals who control the company through trust arrangements, power of attorney, or family relationships (acting in concert).
The Fix: Conduct a "Control Audit." Identify if any individual has the right to veto major decisions or has a dominant influence over the company’s strategic direction, even if they hold 0% of the shares directly. These individuals must be listed as Beneficial Owners to avoid the risk of "misleading disclosure" fines.
7. Lack of a "Mandate" for the Person Managing the Records
Often, the task of BO record-keeping is handed to an HR manager or a junior accountant without formal authorization or training.
The Mistake: The person responsible for the records does not have a formal mandate or understanding of the legal liability involved in misreporting.
The Fix: Formally appoint a "Compliance Officer" or engage a professional firm like BLaw Vietnam to manage these records. Ensure that the person in charge has a clear mandate signed by the Board and understands the transition to Circular 68 forms. This creates an internal audit trail that demonstrates "due diligence" in the event of a government inquiry.
The Risk of Non-Compliance: Fines and Beyond
Failing to adhere to these requirements is no longer a minor slap on the wrist. Under Decree 122/2021/ND-CP (and its subsequent updates aligned with the 2025 Law), businesses can face:
| Violation | Potential Fine (VND) |
|---|---|
| Failure to report BO information | 30,000,000 – 50,000,000 |
| Providing inaccurate or false BO data | 50,000,000 – 100,000,000 |
| Failing to keep records at the Head Office | 20,000,000 – 30,000,000 |
Beyond the financial impact, non-compliance can lead to a "Red Flag" on the National Business Registration Portal, making it difficult to open bank accounts, apply for work permits for expats, or participate in government tenders.
Strategic Action Plan for Your Business
To ensure your business is optimized for the 2026 compliance cycle, we recommend the following three-step action plan:
- Immediate Audit: Review your current internal register against the new Circular 68 templates. Cross-reference your data with the latest entries on the National Business Registration Portal.
- Centralize Records: Move all physical BO documentation to a secure, organized file at your registered head office. Ensure all ID copies are current and certified.
- Establish a Monitoring Cycle: Don’t wait for an inspection. Set a quarterly review to confirm that no changes in the "ultimate control" of your parent companies have occurred.
Through the above article, it is clear that Beneficial Owner record-keeping is a technical process that requires precision and a deep understanding of Vietnamese corporate law. By addressing these seven common mistakes, you can streamline your operations, enhance your corporate transparency, and protect your business from unnecessary legal risks.
At BLaw Vietnam, we are dedicated to providing innovative and efficient legal solutions to help you thrive in the Vietnamese market. Our team is highly qualified to assist with BO audits, Circular 68 transitions, and comprehensive corporate secretarial services.
If you have questions about your current record-keeping status or need assistance with the new filing requirements, we invite you to contact us today. Let us help you optimize your compliance strategy so you can focus on growing your business.
BLaw Vietnam – Your Reliable Partner in Legal Excellence.
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