DECREES 296/2026/NĐ-CP AND 288/2026/NĐ-CP: NEW RULES AND STRONGER PENALTIES FOR BENEFICIAL OWNER DECLARATION

Within less than a week in July 2026, the Government issued two important documents concerning an enterprise's obligation to declare its beneficial owner: Decree 288/2026/ND-CP dated July 18, 2026 (effective July 21, 2026), amending Decree 122/2021/NĐ-CP on administrative penalties in the field of planning and investment, and Decree 296/2026/NĐ-CP dated July 21, 2026 (effective July 23, 2026), amending Decree 168/2025/NĐ-CP on business registration. This is the next step in Vietnam's roadmap for domesticating the recommendations of the Financial Action Task Force (FATF) on beneficial ownership transparency - a topic that enterprises, particularly those with multi-layered ownership structures or foreign elements, need to pay close attention to.

1. The criteria for identifying a beneficial owner have been revised

1.1. Three indicators for identifying a beneficial owner

Under Decree 296/2026/NĐ-CP, an enterprise's beneficial owner is defined as an individual who actually owns or has the right to control the enterprise through one of three indicators: direct or indirect ownership of 25% or more of the charter capital or total voting shares; the right to control the enterprise (for example, the power to determine whether the company's resolutions or decisions are passed); or de facto control over the enterprise's management and operation even without directly holding capital in their own name. This multi-criteria approach requires enterprises to trace ownership all the way to the ultimate controlling individual, rather than stopping at the shareholders or members named on the Enterprise Registration Certificate.

1.2. No re-filing required if nothing has actually changed

According to Ministry of Finance guidance, enterprises that have already declared their beneficial owner and have had no actual change are not required to re-file solely because the identification criteria have been revised. However, as soon as an actual change in beneficial ownership occurs, the enterprise must still notify the business registration authority within 10 days as required under current regulations — and this is precisely the obligation for which Decree 288/2026/NĐ-CP has just introduced specific penalties.

2. New sanctions: fines of up to VND 100 million for non-disclosure

2.1. The fine level under Decree 288/2026/NĐ-CP

Decree 288/2026/NĐ-CP adds Article 46, Clause 4, Point c to Decree 122/2021/NĐ-CP, setting a fine of VND 50-100 million for organizations that fail to declare, or declare dishonestly or incompletely, information about the enterprise's beneficial owner; individuals committing the same violation are fined at half the organizational rate, i.e. VND 25-50 million. In addition to the fine, a violating enterprise is also subject to a remedial measure requiring it to supplement the beneficial owner information. This is a substantial penalty compared with many other violations in the field of business registration, clearly signaling how high a priority the authorities are placing on beneficial ownership transparency.

2.2. Other new points under Decree 296/2026/NĐ-CP

Beyond the beneficial owner declaration obligation, Decree 296/2026/NĐ-CP also introduces several other new points that enterprises - particularly foreign-invested ones - should note: it prohibits an owner from standing in another person's name to contribute capital (a nominee arrangement); it clarifies the requirement for electronic authentication via the VNeID application when granting powers of attorney for certain registration procedures; a foreign investor's business registration dossier no longer needs to include a copy of the Investment Registration Certificate, and instead requires a written commitment to satisfy market access conditions; and the total continuous period of business suspension is now capped at 24 months, with confirmation of resumed operation required within 5 working days after the suspension period ends.

3. Implications for enterprises with complex ownership structures

3.1. The challenge of tracing a beneficial owner

For FDI enterprises with ownership structures spanning multiple intermediary entities across several countries, accurately identifying who qualifies as the beneficial owner under the three criteria of ownership, control and management above is not always straightforward, especially where the ownership structure involves investment funds, publicly listed parent companies, or undisclosed shareholder arrangements.

3.2. Risk to M&A and fundraising due diligence

Errors in identifying or declaring the beneficial owner not only create the risk of administrative penalties under Decree 288/2026/NĐ-CP, but can also affect due diligence by banks, investors or partners in future M&A or fundraising transactions. Enterprises must trace ownership all the way to the ultimate controlling individual to correctly declare their beneficial owner.

4. What should enterprises do?

To comply with the new regulations and avoid the risk of penalties under Decree 288/2026/NĐ-CP, enterprises should:

4.1. Review the entire ownership structure against the three criteria — ownership of 25% or more of charter capital, control rights, and management rights — to accurately identify the enterprise's actual beneficial owner, even where that person does not directly appear on the Enterprise Registration Certificate;

4.2. Check whether previously declared beneficial owner information still reflects reality; if an actual change has occurred, promptly notify the business registration authority within 10 days to avoid penalties;

4.3. Establish an internal process to update beneficial owner information whenever there is a change in shareholders, capital-contributing members, or control arrangements, rather than reviewing this only when carrying out a business registration procedure;

4.4. For foreign-invested enterprises, update registration dossiers in line with the new guidance (a written commitment to satisfy market access conditions in place of a copy of the Investment Registration Certificate) and review any nominee arrangements to avoid breaching the new prohibition;

4.5. Consult legal advisors to assess complex ownership structures, particularly for multinational groups or enterprises with investment funds among their owners, to ensure the beneficial owner declaration is accurate and can be substantiated if requested by the authorities.

The above summarizes the notable changes to the beneficial owner declaration obligation under Decree 296/2026/NĐ-CP and the new penalty regime under Decree 288/2026/NĐ-CP. This compliance obligation applies to every type of enterprise and should be understood clearly, not only to avoid a substantial administrative fine but also to keep the enterprise's legal records transparent for important transactions down the line. For advice on business registration, beneficial owner declaration, or other legal matters related to corporate ownership structures, Lexsol is always ready to accompany you and provide suitable legal solutions.

Read more: What is a beneficial owner ? Legal risks of nominee shareholding in Vietnam