Undisclosed Beneficial Owner Discovered: How to Handle It

Contents

• 1. Why this became "hot" in 2025
• 2. Who is the beneficial owner?
• 3. Red flags of missing/wrong disclosure
• 4. Five-step remediation
• 5. Sanctions and risks of inaction
• 6. Frequently asked questions
• 7. Language versions
• 8. References

1. Why this became "hot" in 2025

From 01/7/2025, Law No. 76/2025/QH15 (amending the Law on Enterprises) brought beneficial owners into Vietnam's corporate legal framework, with duties to declare in enterprise registration filings and report changes (detailed in Decree 168/2025/ND-CP, amended by Decree 296/2026/ND-CP effective 23/7/2026).

Reality: many enterprises — especially FDI companies with multi-tier offshore holding structures — have never declared a beneficial owner, or filled in "the director's name to get it done". When banks tighten KYC, when business registration offices review files, or when internal disputes erupt, the problem surfaces: the company is deemed non-transparent, filings are returned, transactions stall.

This guide covers how to detect and remediate undisclosed (or wrongly disclosed) beneficial owners.

2. Who is the beneficial owner?

The beneficial owner is an individual with de facto ownership of charter capital or control over the enterprise, determined by:

1. Ownership test: directly or indirectly owning 25%+ of charter capital or 25%+ of voting shares.
2. De facto control test: controlling decisions of the Members' Council, General Meeting of Shareholders or equivalent body (appointing/removing most managers, veto rights…).
3. Fallback test: if no individual is identified under the above, the enterprise's most senior manager is deemed the beneficial owner.

Indirect-ownership example: Mr. A owns 60% of B; B owns 50% of Vietnamese company C. A's indirect stake in C = 60% × 50% = 30% — exceeding 25%, so A is C's beneficial owner (absent a more controlling individual).

Key point: the beneficial owner is always an individual, never an organization. Declaring the parent company is wrong.

3. Red flags of missing/wrong disclosure

• ☐ Enterprise registration file has no beneficial-owner section (companies established before 01/7/2025 never supplemented).
• ☐ The BO field names a legal entity (the parent) instead of an individual.
• ☐ It names the director/legal representative who neither owns 25%+ nor exercises de facto control.
• ☐ Ownership changed (capital transfer, capital increase, M&A) but BO information was not updated.
• ☐ The bank demands BO information for account KYC and the company cannot provide it.

4. Five-step remediation

Step 1: Map the actual ownership structure

Redraw the full ownership chart from the Vietnamese entity up through holding tiers to the ultimate individuals. Collect: charters, member/shareholder registers, transfer contracts, shareholders' agreements — de facto control may sit in agreements, not capital ratios.

Step 2: Identify the BO under statutory criteria

Apply the three tests in order (25% ownership → de facto control → fallback). Prepare BO-determination minutes signed by the legal representative — the basis for explanations to authorities and banks.

Step 3: File the supplement/update

File a change notification (supplementing BO information) with the Business Registration Office of the company's seat. For BO changes, the notification deadline is 10 working days from the change.

Step 4: Update in parallel

• Account banks (KYC).
• Tax authorities (related tax-registration information).
• Counterparties in transactions requiring BO transparency (especially fundraising, M&A).

Step 5: Build an internal process

Add "BO review" to the periodic checklist: every capital transfer, capital increase/decrease or management-structure change triggers a BO reassessment within 10 working days by legal/accounting.

5. Sanctions and risks of inaction

• Administrative sanctions: breaching declaration/change-notification duties may be sanctioned under the planning-and-investment sanctions decree.
• Transactional risk: banks may refuse to open/maintain accounts or disburse; counterparties (especially those under AML regimes) may refuse to deal with a non-transparent company.
• Dispute risk: in internal control disputes, an unidentified BO leaves the company poorly positioned to prove "who the real owner is".

6. Frequently asked questions

Who is the beneficial owner of an enterprise? An individual directly/indirectly owning 25%+ of charter capital (or 25%+ of voting shares); or controlling the enterprise's decision-making; failing that, the most senior manager is deemed the BO.

How is the 25% threshold computed for indirect ownership? Multiply ratios along the chain. Example: A holds 60% of B, B holds 50% of C — A's indirect stake is 30%, exceeding 25%.

What are the sanctions for non-disclosure? Administrative sanctions in the planning-and-investment domain are possible, plus transactional friction with banks and counterparties demanding BO transparency.

How to remediate a missing filing? Map actual ownership → identify the BO → file a change notification with the Business Registration Office → update banks and tax authorities in parallel.

Need a BO review and filing clean-up? Contact FLAT Law Firm.

7. Language versions

8. References

• Law No. 76/2025/QH15 amending the Law on Enterprises (effective 01/07/2025).
• Decree No. 168/2025/ND-CP on enterprise registration; Decree No. 296/2026/ND-CP amending it (effective 23/07/2026).
• Content cross-checked via thuvienphapluat.vn at the time of writing (28/9/2026).