New UBO Regulations (Part 2): Detailed Criteria and Declaration Under Decree 168

I. Who is the Ultimate Beneficial Owner of an Enterprise?

According to Article 17 of Decree No. 168/2025/ND-CP ("Decree 168"), the criteria for identifying the UBO of an enterprise are as follows:

The Ultimate Beneficial Owner of a legal entity is an individual who meets one of the following criteria:

a) An individual who directly or indirectly owns 25% or more of the charter capital or 25% or more of the total voting shares of the enterprise.

b) An individual who holds controlling power over the passing of at least one of the following matters: * The appointment, removal, or dismissal of a majority or all members of the Board of Directors, the Chairman of the Board of Directors, or the Chairman of the Members' Council. * The appointment, removal, or dismissal of the legal representative, Director, or General Director of the enterprise. * The amendment or supplement of the enterprise's charter. * The change of the company's management structure. * The reorganization or dissolution of the company.

Indirect ownership, as stipulated in point (a), refers to an individual who owns 25% or more of the charter capital or total voting shares of the enterprise through another organization.

II. Declaring Information on the Ultimate Beneficial Owner

1. The enterprise founder or the enterprise itself must declare and notify the provincial-level Business Registration Office of the following individuals as UBOs: a) An individual shareholder who owns 25% or more of the total voting shares. b) An individual member who owns 25% or more of the charter capital of a partnership or a limited liability company with two or more members. c) The individual owner of a single-member limited liability company.

2. The enterprise founder or the enterprise must self-determine any UBOs who meet the "controlling power" criteria under Point (b), Clause 1, Article 17 of Decree 168 and declare this information to the provincial-level Business Registration Office (if any).

3. The enterprise founder or the enterprise must declare to the provincial-level Business Registration Office information about any organizational shareholder that owns 25% or more of the total voting shares. The information for an organizational shareholder must include: The organization's name, enterprise code/establishment decision number, date of issue, place of issue, head office address, and the percentage of total voting shares owned.

The enterprise is required to maintain the List of Ultimate Beneficial Owners that has been declared to the Business Registration Office in either paper or electronic format.

III. Conclusion

In summary, the regulations for identifying and reporting Ultimate Beneficial Owner (UBO) information under the amended Law on Enterprises and Decree 168 represent a significant legal advancement, underscoring Vietnam's commitment to business transparency. This is not only a requirement to clarify the actual ownership structure within companies but also a powerful tool in the fight against money laundering and terrorist financing, meeting the international standards to which Vietnam has committed.

Therefore, enterprises must be fully aware of this new obligation. It is crucial to proactively review organizational structures, accurately identify UBOs, and prepare for information disclosure. For businesses with complex ownership structures, seeking advice from legal experts is a prudent step to ensure full and proper compliance, thereby avoiding potential legal risks.

Strict adherence to UBO regulations is not just a legal duty; it also enhances reputation, transparency, and builds solid trust with partners, credit institutions, and investors in today's deeply integrated economic landscape.

The UBO declaration form, as per regulations, is a mandatory component of all business registration dossiers.

The information contained in this article is general and intended only to provide information on legal regulations. DB Legal will not be responsible for any use or application of this information for any business purpose. For in-depth advice on specific cases, please contact us.

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