To identify a beneficial owner (“chủ sở hữu hưởng lợi”), trace ownership through each company layer until you reach individuals. The law sets the 25% test but no calculation formula. [CL] In practice, percentages are multiplied along each path and paths reaching the same individual are added. [MP]
By Attorney-at-Law Vu Manh Quynh, Managing Partner, ECOVIS Vietnam Law
Key takeaways
- The tier-1 test covers individuals holding at least 25% of capital or voting shares, directly or indirectly. [CL]
- The law gives no formula for indirect holdings. In practice, multiply within each path and add paths reaching the same individual. [MP]
- Aggregate holdings of family members or of people acting under an agreement before applying the threshold. [CL]
- If nobody meets tier 1, assess actual control before considering the manager with the highest authority. [CL]
- Use an ownership chart and supporting records to make the calculation reviewable.
What does the 25% test measure?
Tier 1 identifies individuals holding 25% or more of capital or voting shares, directly, indirectly, or both. Holdings of family members, as defined in Article 4(22) of the Law on Enterprises, or of individuals acting under an agreement are aggregated. All general partners also fall within tier 1. [CL]
An indirect owner is an individual holding at least 25% through organisations or other legal arrangements. Individuals representing state capital in the company are excluded. [CL]
The three-tier framework appears in Decree 168/2025/ND-CP, Article 17, as replaced by Article 3 of Decree 296/2026/ND-CP. [CL]
A corporate shareholder is an intermediate step, not the end of the analysis. Where shareholders are companies, trace each layer upward to the individuals. [CL]
For directors, CFOs and in-house counsel, the practical task is to connect the ownership chart with the underlying records. A percentage without its ownership path does not explain the calculation.
How do you calculate ownership through several layers?
The decree does not prescribe how to calculate a holding that runs through several companies. [CL] The method below reflects common practice; confirm it for your structure. [MP]
Start with the Vietnam company and draw every layer leading to an individual. Record the percentage held at each link.
A common working order is:
- Multiply the percentages along each path.
- Add the results of separate paths reaching the same individual.
- Add holdings of family members or people acting under an agreement.
- Compare the resulting holding with 25%. [MP]
For example, an 80% interest followed by a 50% interest produces an indirect share of 40%: 80% × 50% = 40%.
Keep multiplication and addition separate in the working paper. Multiplication calculates one path; addition brings together the relevant paths and related holdings.
Show each path separately before recording the total. This presentation lets a reviewer follow the calculation from the individual down to the Vietnam company.
What does a three-layer calculation look like?
Fictitious worked example — all entities and the individual are fictional. [AS]
An individual holds 60% of a holding company. That holding company holds 50% of the parent, which holds 100% of the Vietnam company. [AS]
Individual
│ 60%
Holding company
│ 50%
Parent company
│ 100%
Vietnam company
The indirect share is:
60% × 50% × 100% = 30%.
On these fictitious facts and this working method, the individual would meet tier 1 because the calculated indirect holding exceeds 25%. [MP; AS: example facts]
The calculation uses every percentage in the chain. The parent’s 100% holding remains part of the working, even though it does not reduce the result.
For a board review, place the calculation beside the chart. Readers can then connect each percentage with the corresponding ownership link.
How do you aggregate two related holdings?
Second fictitious worked example — all people, entities and holdings are fictional. Assume Individuals A and B are family members. [AS]
Individual A holds 60% of Holding Company A, which holds 30% of the Vietnam company. Individual B holds 50% of Holding Company B, which holds 20% of the Vietnam company. [AS]
| Fictitious path | Calculation | Indirect holding |
|---|---|---|
| Individual A through Holding Company A | 60% × 30% | 18% |
| Individual B through Holding Company B | 50% × 20% | 10% |
| Family holdings aggregated | 18% + 10% | 28% |
Neither separate path reaches 25%. The aggregated family holding reaches 28%, which would meet the tier-1 threshold on these assumed facts. [MP; AS: example facts]
The aggregation of family holdings comes from the decree. [CL] The arithmetic follows the same working method as the first example. [MP]
What should your ownership chart contain?
Use the chart as a working document supported by records for each layer. A useful chart pairs ownership percentages with countries and an evidence column.
A practical chart worksheet can use these fields:
| Field | What to record |
|---|---|
| Vietnam entity | Entity name and registration number |
| Each intermediate layer | Entity name and country |
| Each ownership link | Percentage held in the next layer |
| Individual | Identity and calculated indirect holding |
| Supporting evidence | Documents held and gaps requiring follow-up |
| Aggregation | Family or agreement holdings included in the calculation |
As a practical step, collect registers and charters for each layer, the Vietnam company’s enterprise registration certificate and the individual’s identity document. These are working suggestions, not a statutory document list. [MP]
Keep the chart, calculations and evidence references together for review. Use the same layout for each path so the final total remains easy to follow.
The company should also keep its beneficial owner list on file. [CL]
What happens if the ownership calculation identifies nobody?
If nobody meets tier 1, assess whether an individual has actual control under tier 2. [CL]
If neither tier identifies anyone, tier 3 points to the manager with the highest authority. [CL]
A calculation below 25% therefore does not complete the three-tier assessment. Complete the actual-control review before moving to the management fallback. [CL]
Why should companies review their ownership records now?
Beneficial owner information has been required at incorporation or amendment since 1 July 2025. [CL]
Official Letter 3164/DNTN-GS, dated 7 October 2026, requests prompt review and inspection of companies on its attached list. The letter itself makes no finding of breach. [CL]
Review registrations and change notices since 1 July 2025 alongside the ownership chart. Check whether beneficial owner information appears in the file.
The beneficial owner self-check provides a starting point for your review. For questions about your ownership chain, use the ECOVIS Vietnam Law contact form.
What are the frequently asked questions?
Does the test stop at an overseas parent?
No. Where shareholders are companies, trace ownership through each layer until you reach individuals, including layers above an overseas parent. [CL]
Is exactly 25% enough?
Yes. Tier 1 uses a threshold of 25% or more of capital or voting shares, directly or indirectly, with related holdings aggregated. [CL]
What if one individual appears through several companies?
The law allows direct and indirect holdings to be combined but sets no formula. [CL] In practice, multiply within each path and add the paths reaching that individual. [MP]
Can the company immediately use its highest-authority manager?
No. If nobody meets tier 1, assess actual control under tier 2 first. The highest-authority manager is the tier-3 fallback if neither earlier tier identifies anyone. [CL]
Sources
- Decree 168/2025/ND-CP (30 June 2025), Article 17, as replaced by Article 3 of Decree 296/2026/ND-CP (23 July 2026).
- Law on Enterprises, Article 4(22).
- Official Letter 3164/DNTN-GS (7 October 2026).
Last reviewed: 22 October 2026 · Reviewer: Attorney-at-Law Vu Manh Quynh, Managing Partner
This article provides general information and is not legal advice.
