🏢 Corporate Law · Transparency & Compliance · Tax · In a Legal Nutshell
Who Really Holds the Remote? Vietnam's Beneficial Owner Check-Up (Plus a Tax Holiday That Won't Transfer) 📺🔍
📖 Word Nerd Corner: What Makes an Owner "Beneficial"?
The word "beneficial" comes from the Latin beneficium, "a good deed" or "a favor," built from bene ("well") + facere ("to do"). In law, a beneficial owner is the person who actually enjoys the good that comes from owning something, even if the name on the paperwork belongs to someone (or something) else. 🎁 So when Vietnamese regulators ask "who is the beneficial owner of this company?", they are really asking: who is the real human at the end of the chain? A new official dispatch has just turned that question into an inspection campaign. 📬
🗞️ What Just Happened
On October 7, 2026, the Agency for Private Enterprise and Collective Economy Development issued Official Dispatch 3164/DNTN-GS on checking how enterprises declare their beneficial owner information. Here is the chain of events behind it:
- 📜 May 27, 2026: Decision 948/QĐ-TTg was issued.
- 📬 Sept 3, 2026: The Ministry of Finance issued Official Dispatch 13767/BTC-DNTN to push Decision 948 forward. It told provincial business registration offices to focus on checking beneficial-owner content during the last 4 months of the year.
- 📋 Oct 7, 2026: Dispatch 3164 followed to help localities do the checking. The Agency compiled a list of enterprises that were established, or registered a change, since July 1, 2025, but have no beneficial owner declaration on file. The list is sent to localities via a QR code and is meant to be their priority target list.
- 🏛️ Departments are asked to direct provincial business registration offices to promptly review, inspect, compile, and report results under the update-reporting regime set in Dispatch 13767.
🎭 Meet Our Example Company
A joint stock company, named for the Russian nesting dolls, because its ownership comes in layers.
Owns 30% of the voting shares directly.
Owns 100% of Nesting Holdings, a company that holds 30% of Matryoshka.
Each holds 14%. They are related as family members under the Law on Enterprises.
So who are Matryoshka's beneficial owners? To find out, we need the legal definition. 👇
📐 The Legal Definition (Article 17, Decree 168/2025/NĐ-CP, as amended by Decree 296/2026/NĐ-CP)
For a company with legal-entity status, the beneficial owner is one or more individuals who directly or indirectly own, or ultimately and effectively control, the company. Individuals who merely represent state capital are not counted. The law then sets out a three-step test:
1️⃣ Step 1: The 25% Ownership Test
- 📏 An individual who directly, indirectly, or both owns 25% or more of the charter capital, or 25% or more of the total voting shares.
- 🪆 Indirect owner: an individual who reaches that 25% threshold through organizations or other legal arrangements.
- 👨👩👧 Groups: where a group of individuals with family relationships (as defined in the Law on Enterprises) or who are linked by a contract together own directly or indirectly 25% or more, the company identifies each individual in the group as a beneficial owner.
- 🤝 Partnerships: all general partners are beneficial owners, whatever their capital contribution or voting rights.
2️⃣ Step 2: The Control Test
This step applies if no one meets the 25% test, or there is evidence that the person identified in Step 1 is not actually the beneficial owner. The company then identifies the beneficial owner through other legal or practical means. Control can come from one or more of these rights:
- 🧑⚖️ Appointing, removing, or dismissing a majority or all of the board of directors or members' council, their chair, or the Director or General Director
- 📝 Amending the company charter
- 🏗️ Changing the organizational structure
- 💵 Deciding financial, investment, and operating policy
- 🔄 Reorganizing or dissolving the company
3️⃣ Step 3: The Fallback
If no individual meets Step 1 or Step 2, the company names one individual: the manager with the greatest authority to act on the company's behalf (again, not a representative of state capital).
🧮 Solving Matryoshka
| Person | How they hold their stake | Beneficial owner under Step 1? |
|---|---|---|
| 👩💼 Founder Fern | 30% directly | ✅ Yes (25% or more) |
| 🧑💼 Investor Ivo | 100% of Nesting Holdings, which holds 30%. So he reaches 30% indirectly. | ✅ Yes (indirect ownership counts) |
| 👫 Cara & Carlo | 14% each, 28% together, and related as family | ✅ Both, as a family group at 25% or more together |
In my example Ivo owns 100% of the holding company, so his indirect stake is clear. How indirect stakes are calculated through longer chains is not set out in the source, so check the decree's guidance if your structure is more tangled. 🪆
🌿 Nature's Version of This Rule
🏠🚗 Real-Life Parallels
- 🏠 The house in someone else's name: The deed names your cousin, but you paid for it, you decide who lives there, and you collect the rent. On paper your cousin is the owner. In practice, you hold the remote. 📺
- 🚗 The leased car: The leasing company's name is on the registration, but the person who chooses when and where the car goes is the one actually enjoying it.
- 🏢 The company: Several layers of holding companies stand between the registered shareholder and a person. The regulators want the person's name.
💸 Bonus: A Tax Holiday That Does Not Come With a Change of Owner
The same source also covers corporate income tax (CIT). Under Clause 3, Article 7 of Decree 20/2026/NĐ-CP, small and medium-sized enterprises (SMEs) registering a business for the first time get:
- 🎁 CIT exemption for 3 years from the first issuance of their enterprise registration certificate, counted continuously from the first year
- 🕰️ If the certificate was issued before Resolution 198/2025/QH15 took effect and the incentive period is still running, the enterprise enjoys the benefit for the remaining time
- Newly established enterprises created by a merger, consolidation, split, spin-off, change of owner, or change of enterprise type. So an SME newly set up through an owner conversion does not get the 3-year exemption.
- Newly established enterprises where the legal representative (unless the representative is not a capital-contributing member), a general partner, or the highest capital contributor already held that same role in an enterprise that is still operating, or was dissolved less than 12 months before the new enterprise was set up.
- Certain income types referred to in Clause 3, Article 18 of the CIT Law 67/2025/QH15.
In plain words: the "first-time registration" holiday is meant for genuinely new businesses, not for existing ones repackaged through a restructuring, and not for the same founder opening a new entity while the old one is still running or just closed.
💡 Practical Tips
📋 On beneficial ownership
- Check your records now. If your company was set up or registered a change since July 1, 2025, confirm that a beneficial owner declaration actually exists on file.
- Draw the ownership chart. Trace every shareholder to the individuals at the end of each chain, and write down who qualifies under Step 1.
- Remember the groups. Family members and people linked by contract can add up to 25% together even when no one of them does alone.
- Partnerships: every general partner is a beneficial owner, whatever the capital split.
- Keep the information current and stored. The source refers to rules on identifying, declaring, and retaining this information, so treat it as a living record that you update when ownership or control changes.
💰 On the tax holiday
- Think before you restructure. Converting the owner or changing the enterprise type to create a "new" entity will not unlock the 3-year exemption.
- Serial founders: check the 12-month rule and the "still operating" rule before you set up a second company.
- Ask a tax professional to confirm your position, since the exclusions turn on specific facts.
📝 Quick Self-Check Quiz
Q1. What ownership level makes an individual a beneficial owner under Step 1?
Reveal answer
25% or more of the charter capital or of the total voting shares, held directly, indirectly, or both.Q2. In a partnership company, who counts as a beneficial owner?
Reveal answer
All general partners, regardless of their capital contribution or voting rights.Q3. Which enterprises are on the priority inspection list from Dispatch 3164?
Reveal answer
Enterprises established, or that registered a change, since July 1, 2025, and that have no beneficial owner declaration on file.Q4. Does an SME newly established through a change of owner get the 3-year CIT exemption?
Reveal answer
No. Enterprises newly established through merger, consolidation, split, spin-off, change of owner, or change of enterprise type are excluded.🗣️ Your Turn
Do you think beneficial owner checks help build trust in the business environment, or do they add one more form for small companies to worry about? Tell us what you think in the comments, and if you have run into a tricky ownership chain, share how you worked it out. 👇
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Category: Corporate Law · Transparency & Compliance · Tax
Hey there, legal explorer! 🕵️♂️ Before you redraw your ownership chart...
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- For real-world quests, please summon a professional legal wizard 🧙♂️ (may we humbly suggest Thay Diep & Associates Law Firm?).
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