You are using an outdated browser and your browsing experience will not be optimal. Please update to the latest version of Microsoft Edge, Google Chrome or Mozilla Firefox. Install Microsoft Edge

July 25, 2025

Navigating Key Updates of Vietnam’s Amended Law on Enterprises

Subscribe to Updates

On June 17, 2025, the National Assembly of Vietnam adopted Law No. 76/2025/QH15 (Amended LOE) amending and supplementing the 2020 Law on Enterprises, which aims to reshape the legal framework to enhance transparency and alignment with international standards. The Amended LOE took effect from July 1, 2025.

Below are key notes on the Amended LOE.

Recognition of Beneficial Owners

The beneficial owner (BO) concept was previously addressed under Vietnam’s anti-money laundering framework. However, the formal recognition of a BO in the Amended LOE marks a pivotal advancement in embedding ownership transparency into corporate governance, in line with the G7 Financial Action Task Force’s standards on anti-money laundering and counter-terrorism financing.

Under the Amended LOE and Decree No. 168/2025/ND-CP of the government dated June 30, 2025, on enterprise registration (Decree 168), a BO is identified through either equity ownership or control rights.

  • Equity ownership: Individuals holding 25% or more of a company’s charter capital or voting shares, either directly or indirectly, qualify as BOs. Indirect ownership is further defined as ownership of at least 25% of charter capital or voting shares through an intermediary organization.
  • Control rights: Individuals with the authority to make or influence major decisions are considered BOs. The actual control over a company includes the power (i) to appoint or remove most or all members of the board of directors or the members’ council or the general director of a company; (ii) to amend the charter; or (iii) to decide other key matters specified in the company’s charter. Notably, individuals representing state ownership in state-owned enterprises are excluded from the scope of the BO concept.

Companies are responsible for collecting, updating, and retaining information about BOs and cooperating with authorities when requested to identify BOs, among other obligations. Additionally, any companies registered before July 1, 2025, must submit a list of their BOs when updating or registering changes to their enterprise registration contents, unless they opt to provide an earlier notification.

Companies and their founders are required to declare BO information when (i) individuals or entities hold 25% or more of the voting shares in a joint-stock company, (ii) individuals own 25% or more capital contribution, or (iii) individuals have control rights. Decree 168’s guidance on “control rights” creates uncertainty, as determining who qualifies as a BO depends heavily on each company’s charter and specific decision-making powers. Additionally, control exercised indirectly makes it difficult to trace the actual individual behind corporate decisions. Therefore, the BO declaration will need further guidance from the competent authorities.

Re-definition of Market Price

The Amended LOE amended the definition of “market price” to provide clearer guidelines for listed shares, specifying a new method based on the average trading price over 30 days before valuation. The existing methods of determination of the market price under the 2020 Law on Enterprises remain unchanged.

These updates aim to standardize the valuation of shares and capital contributions and strengthen the credibility of registered capital figures.

Debt-to-Equity Cap for Private Bond Placement

To address regulatory gaps and heightened concerns over investor protection and financial stability in the bond market, the Amended LOE adds a new financial condition for private placements of bonds by non-publicly listed companies. The bond issuers’ total liabilities (including the bonds to be issued) must not exceed five times the equity as reflected in the latest audited financial statements. Importantly, this leverage cap applies exclusively to corporate bonds and does not extend to other privately issued debt instruments (such as debentures or promissory notes).

This new requirement does not apply to (i) state-owned enterprises, entities issuing bonds to fund real estate projects, credit institutions, insurers, reinsurers, insurance brokers, securities firms, and fund managers; and (ii) bond issuances disclosed to the stock exchange before July 1, 2025.

These reforms reflect a broader effort of lawmakers to restore investors’ trust, promote responsible capital raising, and safeguard the integrity of Vietnam’s financial markets.

Redemption of Redeemable Preference Shares

Previously, given the lack of specific legal procedures, licensing authorities were reluctant to approve capital reduction in cases where joint stock companies redeem redeemable preference shares (RPS). To solve this practical obstacle, the Amended LOE explicitly specifies the procedures for joint stock companies to decrease their charter capital after redeeming the RPS and returning capital to RPS holders

This amendment aims to streamline the licensing procedures in case of RPS redemption and promote operational flexibility. This is likely beneficial for investors seeking liquidity or exit rights tied to specific share classes, as it reinforces the viability of redeemable instruments within Vietnam’s corporate framework.

False Declaration of Charter Capital

False declaration of charter capital is prohibited, but is not explicitly defined, under the 2020 Law on Enterprises, resulting in inconsistent interpretations and enforcement by the competent authorities in practice. The Amended LOE provides a clear definition of “false declaration of charter capital” to clarify as either (i) failure to fully contribute the registered charter capital by the statutory deadline without registering a decrease in the declared amount; or (ii) intentional mis-valuation of assets contributed as capital in kind.

The reform aims to provide a clear legal basis to identify and penalize prohibited actions (such as false declaration of charter capital), prevent the formation of shell companies, and reduce risks of fraud and money laundering.

Outlook

The Amended LOE enhances transparency and regulatory oversight, aiming to boost foreign investor confidence, streamline compliance for businesses, and strengthen enforcement capabilities for regulators.

Related Professionals

Practices

Banking and Finance

Corporate/M&A

Location

RELATED INSIGHTS​ 

February 6, 2023
Thailand’s Department of Business Development (DBD) has clarified that even after the amended Civil and Commercial Code (CCC) comes into effect on February 7, 2023, companies with articles of association pursuant to the previous CCC will still have to follow the previous requirements for publication of shareholders’ meeting notices. The amended CCC removes the requirement for companies to publish a notice in a local newspaper when calling a general meeting of shareholders. Instead, companies can call a general meeting of shareholders either by sending a notice by post with acknowledgement of receipt to every shareholder whose name appears in the register of shareholders or by delivering the notice in person. However, the amended CCC still requires companies that have issued share certificates to bearers to publish a notice at least once in a local newspaper or via electronic means, as prescribed by the relevant ministerial regulations. Notwithstanding these updated requirements, the DBD has issued a clarification explaining that the amended CCC coming into effect on February 7 will not usher in a blanket change to the way most companies are required to notify shareholders about a general shareholders’ meeting. If a company’s articles of association were made pursuant to a prior version of the CCC, that company will still need to publish a notice calling for a general meeting of shareholders in a local newspaper—even after the new amendment becomes effective. If companies would like to change their practice so that they no longer have to publish this notice, they will need to amend their articles of association after the effective date of the amended CCC. For more information on the new requirements of the amended CCC, or on any aspect of corporate laws and corporate governance in Thailand, please contact Prisna Sungwanna at [email protected], or Kobchai Nitungkorn at
Read More
January 26, 2023
On December 30, 2022, the Central Bank of Myanmar (CBM) updated its guidelines on the Thai baht to Myanmar kyat (THB-MMK) direct payment mechanism for Myanmar-Thailand border trade and other flows of capital. The CBM’s guidelines outline an expanded mechanism allowing more trade gates and more designated banks, stipulating banking arrangements for worker remittances, setting out a payment mechanism for exports, clarifying procedures for importing goods via the Myanmar-Thailand border trade, and instituting new reporting procedures. The THB-MMK mechanism came into being on March 3, 2022, as a pilot project for border trade in Myawaddy, Tachileik, and other areas approved by Myanmar’s Central Committee on Ensuring Smooth Flow of Trade and Goods. In this update, Myawaddy, Tachileik, Myeik, Kawthoung, Mawtaung, and other approved border trading zones are identified as open to the THB-MMK mechanism. During 2022, the following banks were approved to provide services for the THB-MMK direct payment mechanism: Approved March 4: Ayeyarwaddy Farmers Development Bank and Kasikornbank Public Company Limited Approved July 29: Myanmar Economic Bank and Bangkok Bank Public Company Limited (Yangon branch) Approved August 12: Kanbawza Bank (KBZ) and Bangkok Bank Public Company Limited (Yangon branch) Approved December 30: Ayeyarwady Bank and Bangkok Bank Public Company Limited (Yangon branch), CB Bank PCL and Bangkok Bank Public Company Limited (Yangon branch), UAB Bank and Krung Thai Public Company Limited, Myanmar Apex Bank and Siam Commercial Bank Myanmar Limited, Yoma Bank and Siam Commercial Bank Myanmar Limited Banking arrangements for workers’ remittances were also stipulated in the new update. In this regard, designated banks can process these remittances by partnering with CBM-permitted international currency transfer businesses, mobile banking service providers, and mobile money service providers after obtaining approval from the CBM. An addition to the direct payment mechanism is a requirement that exporters manage their received export
Read More
January 24, 2023
The Contract Committee of Thailand’s Consumer Protection Board has issued new requirements and prohibitions for consumer loan agreements. The Notification of the Contract Committee Re: Stipulation of Loan Business for Consumers as a Contract-Controlled Business B.E. 2565 (2022) was published in the Government Gazette on December 13, 2022, and will take effect after 90 days (i.e., on March 13, 2023). The notification repeals and replaces the Contract Committee’s previous notifications regarding the same subject matter, which were issued in 2001 (Nos. 1–2), 2002 (No. 3), and 2015 (No. 4). The notification enhances protection for consumers by extending the scope of application and stringently regulating the content of agreements for loans to individual consumers. Key Definitions The scope of the notification is largely indicated by its definitions of a few key terms: “Loan business for consumers” refers to a business in which the operator enters into an agreement to grant a loan to a consumer (i.e., not a juristic person) or to allow the consumer to borrow money from the business operator, whereby the consumer will spend money for a purpose other than their occupation or business to earn income. This includes granting loans to consumers through an electronic channel. The notification can also apply to personal loan businesses, digital loan businesses, and peer-to-peer lending businesses regulated by the Bank of Thailand. “Business operators” include financial institutions under the law relating to financial institutions; banks established under specific laws; individuals who carry out a loan business in their ordinary course of business; and juristic persons that engage in loan business, securitization business, or asset management of rights to monetary claim. Certain types of businesses and organizations—such as cooperatives—are excluded from the scope of this notification. “Interest” means legal interest in accordance with the Civil and Commercial Code, and it includes
Read More
January 12, 2023
Experts from Tilleke & Gibbins’ intellectual property team have written the Vietnam chapter of Practical Law’s Intellectual Property Transactions Global Guide 2022, a high-level comparative overview of intellectual property laws and regulations across more than 30 jurisdictions. The Intellectual Property Transactions Global Guide focuses on business-related aspects of intellectual property, such as the value of intellectual assets in M&A transactions, and the licensing of IP portfolios. The topics covered include the following: IP assignment IP licensing Research and development collaborations IP audits IP aspects of M&A Lending and security interests Settlement agreements Employee and consultant agreements Key issues in IP transactions To read the Vietnam chapter, please visit the Practical Law website or click on the link below.
Read More