Having someone else hold company ownership in their name — the real contributor behind the scenes, the nominee on paper — is not uncommon in practice. A frequent question: when declaring beneficial owners, may the nominee be declared?
The answer is clear: NO — the nominee must not be declared as the beneficial owner; the real person behind must be declared. The definition in Clause 35, Article 4 of the Law on Enterprises (added by Law 76/2025/QH15) turns on the words “in reality“: a nominee does not meet the definition; only the person who actually contributes capital or exercises control — reaching 25% ownership or holding control rights — is the beneficial owner to declare.
From 23/7/2026: nominee capital contribution is prohibited
Clause 1, Article 1 of Decree 296/2026/ND-CP (amending Clause 1, Article 4 of Decree 168/2025/ND-CP, effective 23/7/2026) expressly provides that owners, shareholders, and members “shall not hold capital contributions in the enterprise in the name of another person”. This is an explicit prohibition — nominee contribution arrangements violate the law from that date, whatever the reason behind them.
Sanctions for declaring the nominee to conceal the real person
- VND 30–70 million: declaring the nominee to conceal the real owner is an untruthful declaration (Article 43 of Decree 122/2021, amended by Decree 288/2026/ND-CP, effective 21/7/2026);
- Revocation of the Enterprise Registration Certificate: where declared content is determined to be forged (Article 212 of the Law on Enterprises).
Practical risks for both sides
For the name lender: on paper they are the lawful shareholder/member and bear shareholder/member liability toward the law and third parties — including capital-contribution obligations and liability for debts within their contributed capital. A private nominee agreement cannot be invoked against bona fide third parties.
For the real owner behind: if the nominee “turns” — unilaterally transferring shares or pocketing dividends — the real owner struggles to protect their rights, having to prove the real ownership relationship in court while all legal documents bear another name. Nominee arrangements may also be examined as sham transactions (Article 124 of the Civil Code 2015) — flagged here as a risk to note.
Recommendation: terminate the nominee arrangement
The safest path is to terminate the nominee agreement, formally transfer the shares/capital contribution to the real owner, update the enterprise registration, and declare the correct beneficial owner. The cost of a formal transfer is far lower than the risk of fines, licence revocation, or losing ownership entirely in a dispute.
Points that remain unclear
- No dedicated sanction clause yet for “holding capital contributions in another name” — in practice it may be handled through the “untruthful declaration” sanction.
- Nominee arrangements existing before 23/7/2026: no specific transitional provision governs them.
- Civil validity of nominee agreements depends on evidence and the courts assessment in each case.
Frequently asked questions
Q: May I declare the nominee as the beneficial owner?
A: No. Declare the person who actually contributes or controls (reaching 25% or holding control rights). Declaring the nominee to conceal the real person is an untruthful declaration, fined VND 30–70 million.
Q: Is lending my name to another contributor punishable?
A: From 23/7/2026, holding capital contributions in another name is prohibited (Decree 296/2026/ND-CP). The name lender also bears nominal shareholder/member liability toward the law and third parties.
Q: I am in a nominee arrangement — what should I do?
A: Terminate the nominee agreement, formally transfer to the real owner, update enterprise registration, and declare the correct beneficial owner.
Legal references
- Law 76/2025/QH15: Clause 35 Article 4; Article 17 (prohibited acts); Article 212;
- Decree 168/2025/ND-CP: Clause 1 Article 4; Articles 17, 18;
- Decree 296/2026/ND-CP (effective 23/7/2026): Clause 1 Article 1;
- Decree 288/2026/ND-CP (amending Decree 122/2021, effective 21/7/2026): Article 43;
- Civil Code 91/2015/QH13: Article 124 (sham transactions — flagged as a risk).
Contact
FLAT Law Firm advises on unwinding nominee arrangements: assessing legal risk, completing formal transfers, updating enterprise registration, and declaring the correct beneficial owner. Contact: contact us.
This article is for general information only and does not replace legal advice for your specific case.
Transparency note: The legal content of this article has been reviewed by the FLAW AI Legal Council. It is not the opinion of a human lawyer who has reviewed your case; content requires owner approval before publication.