When signing a high-value contract with a counterparty, many enterprises worry: does the law require them to verify the counterparty’s beneficial owners before signing? The question arises because beneficial owner obligations have been tightened since 2025 — but not everyone is subject to them.
Conclusion: No general obligation
No. Vietnamese law does not impose a general obligation on enterprises to verify the beneficial owners of their counterparties, even for high-value contracts. The duty to identify and verify beneficial owners belongs only to a specific group called “reporting entities” under the Law on Anti-Money Laundering.
Who are the “reporting entities” that must verify beneficial owners?
Under Article 4 of Law No. 14/2022/QH15 (the Law on Anti-Money Laundering), “reporting entities” include financial institutions (banks, securities companies, insurers…) and organizations and individuals conducting relevant non-financial businesses such as real estate trading, prize-winning games, precious metals and gemstones, accounting, notarization, and legal services…
These entities must identify customers (Articles 9 and 10) and verify customer identification information, including beneficial owners (Article 12). Decree 19/2023/ND-CP (Articles 6 and 7) sets the transaction value thresholds for customer identification and the criteria for determining beneficial owners. An ordinary enterprise — no matter how large its contracts — is not subject to these duties if it is not a reporting entity.
An enterprise’s beneficial owner duty under the 2025 Enterprise Law is “one-way”
Under Clause 5a, Article 8 of Law No. 76/2025/QH15, an enterprise’s beneficial owner obligation is “internal record + state reporting”: to declare its own beneficial owners, keep the list at the enterprise, and provide it to competent state authorities upon request. The law does not impose the reverse — enterprises are not required to “go and verify someone else’s beneficial owners”.
What does “large value” mean in the Anti-Money Laundering Law?
A common misunderstanding: “large value” in the Anti-Money Laundering Law is the threshold for reporting entities to report large-value transactions — not a threshold that triggers verification duties for enterprises in general. A large contract does not automatically turn an enterprise into a reporting entity, nor does it create a duty to verify the counterparty’s beneficial owners.
Enterprises may still voluntarily screen counterparties
Although not mandatory, enterprises are entirely free to voluntarily screen counterparties (commercial KYC) as a risk management measure: checking legal status, financial capacity, dispute history, and reputation before signing a high-value contract. This is an enterprise’s right, not a statutory duty — the distinction matters to avoid the misconception that “the law requires it”.
Voluntary screening is especially meaningful when the counterparty is a legal entity with a complex ownership structure, or when the enterprise operates in a supply chain subject to compliance pressure from a parent company or financing bank.
Points to note
- The specific threshold in Article 6 of Decree 19/2023/ND-CP: guidance sources are inconsistent (some cite VND 300 million, others VND 400 million) — enterprises should consult the original text and seek expert advice when applying it.
- The draft amendment to the 2022 Anti-Money Laundering Law may change the scope of “reporting entities” in the future — worth monitoring.
- Certain specialized sectors may have their own counterparty screening requirements (e.g., in bidding, securities, banking) — beyond the scope of this general question.
Frequently asked questions
Q: My bank asks for my company’s beneficial owner information when opening an account — is that lawful?
A: Yes. Banks are “reporting entities” with a duty to identify and verify customers’ beneficial owners under the Anti-Money Laundering Law.
Q: My contract is worth tens of billions of dong. Will I be fined for not screening the counterparty?
A: No, if your enterprise is not a “reporting entity”. A large contract value does not by itself create a beneficial owner verification duty.
Q: Can I include a clause requiring the counterparty to disclose its beneficial owners?
A: Yes. This is a voluntary agreement between the parties, fully lawful and good risk-management practice.
Legal basis
Law No. 14/2022/QH15: Article 4 (reporting entities); Articles 9, 10 (customer identification); Article 12 (verification); Articles 21, 22. Decree 19/2023/ND-CP: Article 6 (identification thresholds); Article 7 (beneficial owner criteria). Law No. 76/2025/QH15: Clause 5a, Article 8 (the enterprise’s duty regarding its own beneficial owners).
Need advice on anti-money-laundering obligations or building a suitable counterparty screening process? Contact us via the Contact page of FLAT Law Firm for support.
The information above is for reference only and does not constitute legal advice.
The legal content of this article was reviewed by the FLAW AI Legal Council; it is not the opinion of a licensed human lawyer and does not replace legal advice for any specific case.
