Vietnam officially bans nominee shareholding arrangements from 23 July 2026

Legal Background

Decree No. 296/2026/NĐ-CP strengthens ownership transparency by prohibiting nominee shareholding arrangements and introducing comprehensive beneficial ownership reporting obligations.

On 23 July 2026, the Government of Vietnam issued Decree No. 296/2026/NĐ-CP (“Decree 296”), amending and supplementing several provisions of Decree No. 168/2025/NĐ-CP on enterprise registration. Although the Decree revises only selected provisions, it introduces significant changes affecting enterprise registration, ownership transparency and corporate governance, as part of Vietnam’s broader efforts to enhance administrative efficiency, digital transformation and transparency in business ownership.

Among the various amendments, the official prohibition of nominee shareholding arrangements is considered one of the most notable developments for businesses and investors operating in Vietnam.

Vietnam officially prohibits nominee shareholding arrangements

For the first time, Vietnamese enterprise registration regulations explicitly prohibit owners, members and shareholders from holding equity interests on behalf of another person.

Specifically, Decree 296 supplements Article 4 of Decree 168 by providing that:

The owner, shareholder or member of a company shall not act as a nominee to contribute capital on behalf of another person.

This provision officially establishes a clear legal basis for prohibiting nominee shareholder and nominee member arrangements that have historically been used in certain circumstances to conceal the identity of the actual investor or controller of an enterprise.

The amendment is intended to:

• Increase transparency in corporate ownership structures.
• Prevent the concealment of beneficial owners.
• Strengthen anti-money laundering compliance.
• Support the prevention of tax evasion and sham transactions.
• Enhance the integrity of enterprise registration records.

Expanded definition of beneficial ownership

Alongside the prohibition on nominee arrangements, Decree 296 substantially refines the framework for identifying beneficial owners.

Previously, beneficial ownership was primarily determined based on quantitative threshold, specifically, holding 25 % or more of direct or indirect charter capital. Under the new framework, this threshold is expanded to include any combination of direct and indirect ownership.

The Decree also introduces additional criteria to determine beneficial ownership, including:

• Ownership through multiple layers of legal entities.
• Combined direct and indirect ownership interests.
• Aggregated ownership among family members or contractual co-owners.
• Automatic recognition of all general partners as beneficial owners regardless of contribution ratio.
• Identification based on actual control over enterprise operations in case ownership ratio is not applicable.
• Fallback mechanisms where ownership structures make beneficial owners difficult to identify.

These amendments align Vietnam’s regulations more closely with international anti-money laundering standards and make it more difficult to conceal ownership through intermediary entities or fragmented ownership structures.

New obligation to declare beneficial ownership information

Decree 296 also introduces a new responsibility for enterprises and business founders to proactively identify and declare beneficial ownership information.

Under the new requirements, enterprises must:

• Review their ownership structure in its entirety.
• Trace ownership through all levels of corporate ownership.
• Identify individuals exercising ultimate ownership or control.
• Submit and maintain accurate beneficial ownership information.
• Take responsibility for the accuracy and completeness of declarations.

This represents a significant change from the previous approach, where authorities largely relied on information voluntarily provided by enterprises without imposing a specific obligation to identify ultimate beneficial owners.

Failure to comply may expose businesses to administrative penalties under recently amended regulations governing enterprise registration violations.

Additional enterprise registration reforms

Beyond ownership transparency, Decree 296 introduces several administrative reforms designed to simplify enterprise registration procedures and support digital transformation.

Reduced documentary requirements

Business registration authorities are now required to utilize information available in national databases rather than requiring applicants to re-submit documents already held by government agencies.

As a result, enterprises may no longer need to provide certain documents where the relevant information can be verified electronically, including:

• Enterprise Registration Certificates.
• Tax Registration Certificates.
• Investment Registration Certificates.
• Foreign investment approvals.
• Court decisions and certain other official documents.

This amendment is expected to reduce compliance costs and shorten registration processing times.

Mandatory electronic authentication

The Decree strengthens electronic verification requirements for certain enterprise registration changes, including:

• Changes of legal representatives.
• Changes of company owners.
• Changes of limited liability company members.
• Changes relating to founding shareholders and foreign investor shareholders.

Both the principal and authorized representative must generally complete electronic authentication procedures when filing through an authorized person.

Business suspension management

The Decree also introduces additional controls over business suspension procedures, including:

• A maximum consecutive suspension period of 24 months.
• Mandatory disclosure of contact information of the legal representative.
• Post-suspension confirmation requirements.
• Enhanced monitoring and reporting obligations.
• Potential revocation of the Enterprise Registration Certificate for prolonged non-compliance.

Implications for businesses and investors

The prohibition on nominee shareholding arrangements represents one of the most significant ownership transparency reforms introduced under Vietnam’s enterprise registration regime in recent years.

Businesses operating in Vietnam should consider reviewing:

• Existing ownership structures.
• Shareholding and membership arrangements.
• Beneficial ownership disclosures.
• Corporate governance documentation.
• Internal compliance policies and procedures.

Particular attention should be given to any structures involving nominee shareholders, nominee members or indirect ownership arrangements to ensure compliance with the new regulatory requirements.

Conclusion

Decree No. 296/2026/NĐ-CP reflects Vietnam’s continuing transition towards a more transparent, digital and internationally aligned business regulatory environment. While the Decree introduces several administrative simplifications and digitalization measures, it simultaneously imposes more stringent obligations regarding ownership transparency and beneficial ownership reporting.

The official ban on nominee shareholding arrangements, together with the expanded beneficial ownership framework, reinforces the Government’s commitment to anti-money laundering objectives, improved corporate governance and greater transparency in business ownership structures. Businesses and investors should therefore assess the impact of these changes and take appropriate steps to ensure compliance with the new requirements from 23 July 2026.