Tiếng ViệtFrom July 1, 2025, the amended Enterprise Law 2025 officially takes effect, introducing significant changes related to the rights and obligations of legal representatives, capital contribution responsibilities, declaration requirements, and, for the first time, the concept of “beneficial ownership” in enterprises.
This marks a major step toward greater corporate transparency in Vietnam while imposing stricter and more detailed legal requirements on both newly established and existing companies. Particularly for enterprises with foreign investment, cross-shareholding, or complex ownership structures, understanding and complying with these new regulations is essential to avoid legal risks, administrative sanctions, or disruptions to business operations.
In the midst of these simultaneous legal changes, this article by LexConsult & Partners provides businesses with a clear overview of the key updates under the amended Enterprise Law 2025 and practical guidance on how to prepare for full compliance starting from July 1, 2025.
1. Overview of the Amended Enterprise Law 2025
The 2025 amendment comprises three articles, focusing on the following key areas:
– Strengthening the personal responsibility of legal representatives;
– Rectifying false or inaccurate business registration declarations;
– Tightening regulations on charter capital contribution and asset valuation;
– Expanding the list of individuals prohibited from establishing or managing enterprises;
– Introducing, for the first time, the concept of “beneficial ownership” in enterprises.
2. Key Updates in the Amended Enterprise Law 2025
2.1. Personal Liability of Legal Representatives
Under the new law, the legal representative will bear personal civil liability if they cause damage to the enterprise by violating their managerial or operational duties prescribed by law. This marks a strong shift toward enhancing corporate transparency and ethical governance.
Legal basis: Clause 1, Article 12 of the Amended Law.
Previously, the liability of legal representatives was largely nominal, with limited personal consequences. The 2025 amendment now explicitly establishes individual civil responsibility, compelling company leaders to act prudently, honestly, and transparently.
For example, if a legal representative deliberately fails to contribute the committed charter capital but continues operations—resulting in financial losses—they may be held personally liable to compensate the company.
2.2. Stricter Regulations on Capital Declaration and Business Registration
The amended law introduces several prohibited acts, including:
– Falsely declaring charter capital (failure to contribute but not reporting adjustments);
– Submitting inaccurate or fraudulent information in business registration documents;
– Misvaluing assets used for capital contribution.
Legal basis: Articles 28, 31, and related provisions on business registration procedures.
Previously, the law allowed 90 days for capital contribution without clear sanctions for non-compliance. The 2025 amendment now enforces strict accountability — businesses must contribute accurately, report truthfully, and update promptly, thereby preventing “virtual capital” and financial manipulation.
This change ensures greater transparency and credibility in corporate capital structure, particularly important for startups and companies contributing assets instead of cash.
False declarations have long created loopholes for “ghost companies.” The new provisions close these gaps and help ensure a fairer business environment.
2.3. Expanded Restrictions on Who Can Establish or Manage Enterprises
Article 17 has been revised and supplemented to include:
– Public officials and civil servants are prohibited from establishing or contributing capital to enterprises, except under special circumstances provided by the Law on Science and Technology, the Law on Innovation, or Resolution No. 193/2025/QH15.
– Individuals under criminal investigation, serving sentences, or prohibited from certain professions by court judgment are not permitted to establish or manage enterprises.
Legal basis: Amendment to Points b and e, Clauses 2 and 3, Article 17 of the Enterprise Law 2020.
Previously, restrictions were fragmented and inconsistent. The new law unifies and clarifies these rules, preventing individuals with conflicts of interest or moral risks from exploiting corporate structures. At the same time, the limited exception for public servants in innovation and technology sectors is a progressive move to encourage startup and R&D entrepreneurship.
2.4. Introduction of “Beneficial Ownership” Regulation
For the first time, the amended law formally recognizes the concept of a “beneficial owner” — a person who ultimately controls or benefits from a company without being its legal owner.
Enterprises are now required to:
– Collect, maintain, and disclose information on beneficial owners during business registration or when changes occur;
– Comply with forthcoming government guidance on identification criteria and penalties for non-compliance.
Legal basis: Based on the recommendations of the National Assembly’s Economic Committee and the Ministry of Finance, incorporated into the Amended Enterprise Law 2025.
The beneficial ownership rule aligns Vietnam’s corporate transparency standards with international practices, particularly those under the FATF (Financial Action Task Force) framework on anti–money laundering (AML). This is a crucial step for improving Vietnam’s investment environment, especially for companies with complex ownership structures or foreign capital participation.
3. What Businesses Should Do Before July 1, 2025
The Amended Enterprise Law 2025 will officially take effect on July 1, 2025. To ensure full legal compliance and avoid potential risks, both newly established and existing enterprises should proactively review and update the following key areas:
– Declare Beneficial Ownership: For the first time, the law requires enterprises to declare the beneficial owner — the individual who ultimately controls or benefits from the company, even if not listed as a legal shareholder. While immediate declaration is not yet mandatory, enterprises must provide this information when making any business registration updates after July 1, 2025.
– Review Charter Capital Contribution: Companies should verify whether shareholders or members have fully contributed their committed capital. Failure to contribute or update capital adjustments will be deemed a false declaration — a legal violation under the new law. It is advisable to make supplemental contributions or adjust the charter capital promptly.
– Ensure Accurate Valuation of Contributed Assets: The amended law strictly regulates the valuation of assets used as capital contributions.
Deliberately inflating asset values to increase charter capital may result in administrative penalties. All contributed assets must be properly valued at fair market price and documented with supporting evidence.
– Verify the Legal Representative’s Eligibility: The legal representative now bears personal civil liability for damages caused by unlawful management decisions. Businesses should ensure that this person has full legal capacity, is not prohibited from serving, and understands their legal obligations.
– Reassess Shareholders, Members, and Managers: The amendment expands the list of individuals prohibited from owning or managing enterprises (e.g., public officials, civil servants). Companies should review their list of shareholders, investors, and managers to ensure compliance with the new restrictions.
4. Common Questions About the New Regulations
Do companies established before July 1, 2025 need to declare their beneficial owners?
→ Yes. When making any registration changes after that date, enterprises must include beneficial ownership information.
Will businesses that fail to fully contribute charter capital be penalized under the new law?
→ Yes. Failure to contribute on time without adjusting registered capital constitutes a false declaration and is subject to administrative sanctions.
Can the legal representative be held personally liable for damages?
→ Yes. If losses occur due to unlawful management, the legal representative must personally compensate the company under the amended law.
Must enterprises revalue previously contributed assets?
→ Not necessarily. However, if discrepancies or disputes arise, authorities have the right to verify asset valuations.
Can public officials or civil servants invest in or establish companies?
→ No, except in special cases permitted under the Law on Science and Technology, the Law on Innovation, or resolutions of the National Assembly.
In summary, the Enterprise Law 2025 not only refines procedural rules but also strengthens the accountability of corporate leaders, enhances capital transparency, and clarifies ownership structures, thereby contributing to a more transparent and sustainable business environment in Vietnam.
For businesses, failing to adapt or overlooking these updates may lead to legal penalties, internal disputes, or loss of investor confidence. Now is the time for enterprises to review all corporate legal documents, verify capital contributions, confirm legal representatives and beneficial owners, and proactively update their information with the Business Registration Office when necessary.
If you are an FDI enterprise, joint stock company, or startup preparing to establish or restructure your business in Vietnam, the legal team at LexConsult & Partners is ready to assist — providing corporate advisory, legal compliance, and full legal representation services to ensure your business operates lawfully and efficiently.
📞 Hotline: 0938 657 775
📧 Email: info@lexconsult.com.vn
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