Ho Chi Minh City, 12 August 2026
Key Takeaway
On 23 July 2026, the Government issued Decree No. 296/2026/ND-CP (“Decree 296”), amending and supplementing Decree No. 168/2025/ND-CP on enterprise registration. Decree 296 took effect immediately upon issuance.
Three key changes are particularly relevant to businesses, especially FDI enterprises: an expanded legal framework for identifying beneficial owners of enterprises (“BOs”); an express prohibition against owners, members and shareholders holding capital contributions in another person’s name; and additional obligations for enterprises during periods of business suspension.
These changes indicate a shift in regulatory focus from information formally recorded in corporate filings toward ensuring that enterprise registration information accurately reflects the actual ownership, control, and operational status of an enterprise.
What Has Changed?
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Broader Scope and Methodology for Identifying BOs
(a) Broader ownership-based identification criteria
Decree 296 retains the ownership threshold of 25% of charter capital or total voting shares but expands the method of calculation and the circumstances that must be considered. Accordingly, an individual may be identified as a BO if they directly, indirectly, or through a combination of direct and indirect ownership hold 25% or more of charter capital or total voting shares.
Notably, Decree 296 also supplements the following identification criteria s:
- Indirect ownership is held through organizations or other legal arrangements;Individuals who are related family members or are parties to a contract and together hold 25% or more may all be identified as BOs; and
- All general partners of a partnership are regarded as BOs, regardless of their capital contribution ratio or voting rights.
(b) A three-step process for identifying BOs
Decree 296 also establishes the following order for identifying BOs:
- Step 1: Identify individuals who satisfy the ownership threshold of 25% or more as mentioned in the Item 1(a) above.
- Step 2: Where no individual satisfies the ownership threshold after conducting Step 1, or there are grounds to conclude that an individual satisfying that threshold is not the BO, the enterprise must identify the individual who exercises actual control over the enterprise.
The scope of control has also been broadened. In addition to rights relating to the appointment, removal or dismissal of a majority or all the management personnel, amendment of the charter, changes to the organizational structure, reorganization or dissolution, it now includes the right to determine the enterprise’s financial, investment and operational policies.
- Step 3: If no individual can be identified under the first two steps, the enterprise must identify as its BO the enterprise manager with the greatest authority to act on behalf of the enterprise, except for individual representing the State’s ownership interest in an enterprise.
Decree 296 further requires an enterprise to review each level of its ownership structure until the individual who ultimately owns or controls the enterprise in practice is identified. Where the ownership structure includes a legal arrangement governed by anti-money laundering legislation, the BO of that legal arrangement must be identified in accordance with the anti-money laundering legislation.
Practical implications: BO identification can no longer be based solely on each individual’s standalone ownership percentage or on the list of direct members or shareholders. Enterprises may need to aggregate direct and indirect ownership, examine family relationships, contracts and other relevant arrangements, and conduct a “look-through” review across multiple ownership layers to identify the individual who ultimately owns or controls the enterprise. The assessment should also consider control rights contained in the charter, shareholders’ agreements, investment agreements and other corporate governance documents.
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Prohibition Against Making Capital Contributions as a Nominee for Another Person
Decree 296 expressly requires company owners, members and shareholders to comply with the statutory requirements applicable to contributed assets and prohibits them from making capital contributions as nominees for another person.
This requirement is closely connected with BO transparency. The person recorded in the enterprise’s registration documents and corporate records as making the capital contribution should accurately reflect the person who actually legally owns or uses the contributed assets and provides the capital, rather than a nominal holder acting on behalf of another person.
Practical implications: Nominee arrangements, informal holding structures or capital contribution arrangements that are not fully and properly documented may give rise to significant legal and compliance risks. Enterprises should ensure consistency among their enterprise registration records, registers of members or shareholders, banking records and payment evidence, documents evidencing legal ownership or legal use rights of contributed assets and the agreements entered into among the relevant parties.
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Business Suspension Does Not Relieve an Enterprise of Its Registration Obligations
Under Decree 296, each notified period of business suspension may not exceed 12 months, and the total period of consecutive business suspension may not exceed 24 months.
During a period of business suspension, an enterprise must still register or notify any changes to its enterprise registration information. Within five working days from the expiry of the notified suspension period, the legal representative must confirm that the enterprise has resumed business and confirm that all enterprise registration obligations have been fully completed.
If the enterprise fails to provide this confirmation, the business registration authority may require the enterprise to submit a report and may coordinate with the tax authority. If the enterprise continues to fail to submit the required report within the statutory period, its Enterprise Registration Certificate may be revoked.
Practical implications: Business suspension should no longer be treated as a period during which all corporate compliance obligations are effectively “frozen”. Enterprises must continue monitoring changes to their registration information and proactively confirm the resumption of business within the prescribed timeline.
Recommended Actions for Businesses
Businesses, particularly FDI, should:
- Review their BOs through each level of the ownership structure, taking into account direct and indirect ownership and actual control rights;
- Verify consistency between (i) the registered capital contributor, and (ii) the person who actually provides the capital, person who is a lawful owner of, or a person having the lawful right to use, the contributed assets;
- Retain documents supporting the identification of BOs, including ownership charts, charters, registers of members or shareholders and shareholders’ agreements;
- Update internal procedures to reassess BOs whenever there is a change in capital ownership, voting rights, appointment rights or the management structure; and
- For enterprises under business suspension, monitor the suspension period, registration changes arising during the suspension and the deadline for confirming the resumption of business.
Our Observations
Decree 296 reflects a broader regulatory approach that focuses on the substance of corporate ownership and operations rather than relying solely on formal corporate records. The expanded BO identification criteria, the prohibition against holding capital contributions in another person’s name and the additional obligations imposed on suspended enterprises are
all intended to ensure that enterprise registration information accurately reflects the persons who own and control an enterprise and its actual operational status.
For FDI with multi-layered ownership structures or complex governance arrangements, BO reviews should be conducted periodically and supported by sufficient documentation. This is particularly important given the significantly increased penalties for failing to declare, inaccurately declaring or failing to update BO information as highlighted in our note published last week [Read here].
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If you would like to discuss how these regulatory changes apply to your business or require tailored compliance advice, please get in touch with our team.
info@indochinecounsel.com
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