Amendment to and supplementation of certain provisions of the Enterprise Law (effective from July 1, 2025)

On June 17, 2025, at the 9th session of the 15th National Assembly, the Amendment to and Supplementation of Certain Provisions of the Enterprise Law was officially passed with a high approval rate (95.19% of total deputies). Some key points of the Law include:

NO.	CONTENT	REGULATORY ADJUSTMENT	ASSESSMENT
1	New provisions regarding "Beneficial owners of enterprises"	Definition: "Beneficial owner of an enterprise as a legal entity (hereinafter referred to as beneficial owner) is an individual with actual ownership rights over the charter capital or control rights over the enterprise, except where the representative of the state as the direct owner holds 100% of the charter capital and the representative of state capital investment as stipulated by law on state capital management and investment in enterprises." - Enterprises must provide information on beneficial owners when conducting new establishment registrations, registering changes in enterprise registration content, with no immediate requirement for supplementation upon the Law's effectiveness. - The new Law defines the general concept of beneficial ownership, with the government tasked with providing specific criteria and sanctions for violations.	- For the first time, the Enterprise Law formally recognizes the concept of beneficial ownership to identify individuals who truly own or control enterprises behind legal entity structures. Previously, individuals could hide behind legal entities, subsidiaries/associates to avoid disclosure. The new regulation mandates that enterprises must provide information when registering businesses for these individuals. - The regulation contributes to enhancing transparency in enterprise ownership, preventing the concealment of actual ownership rights through multiple layers of intermediaries. Simultaneously, it protects the interests of genuine shareholders/investors, preventing manipulation of enterprises by anonymous individuals. ➔ Enterprises need to review their ownership structures, contributions to identify actual beneficial owners and standardize internal records to ensure readiness to provide when registering changes.
2	Additional prohibited behaviors	➢ Falsifying, dishonestly, inaccurately registering business registration documents, changing business registration documents. ➢ False declaration of charter capital (insufficient contribution, failure to adjust capital when insufficient, incorrectly valuing contributed assets).	- Enhancing honesty, transparency in establishment and operation of enterprises: Helps eliminate situations where enterprises register large charter capitals to create cover, but actually do not contribute or contribute virtual capital. - Limiting the risk of enterprises inflating capital for borrowing, over-guaranteeing. - Management agencies need to improve post-inspection mechanisms, coordinate information flow between business registration agencies, tax authorities, banks to control actual capital contributions.
3	Personal responsibilities of legal representatives under the law	"The legal representatives of enterprises bear personal responsibilities as prescribed by law for damages to enterprises due to their violations of responsibilities." Specific responsibilities under Article 1, Article 13 of the 2020 Enterprise Law, The legal representatives of enterprises are responsible for: a. Exercising rights and obligations entrusted honestly, carefully, best to ensure the legitimate interests of the enterprise; b. Loyalty to the interests of the enterprise; not abusing positions, offices and using information, trade secrets, business opportunities, other assets of the enterprise for personal gain or serve the interests of other organizations, individuals; c. Timely, fully, accurately notifying the enterprise about the enterprises they or their related persons own or contribute capital, as stipulated by this Law.	The amended law emphasizes specific personal responsibilities, binding legal representatives to directly bear responsibility for damages to enterprises due to their violations according to legal regulations. - The new regulations help enhance transparency and corporate governance capabilities, protecting shareholders and the market. However, both legal representatives and enterprises need to be more cautious, transparent in management. - Legal representatives are at risk of more legal risks when making business decisions, especially in the context of high market risks. However, differentiating between reasonable business risks and violations of management obligations, management requirements, is sometimes not easy and requires specific legal regulations.
4	Looser regulations for restricted subjects to establish, contribute capital, and manage enterprises	Added provisions allowing public servants and officials to establish, contribute capital to, and manage enterprises in accordance with laws in fields of science, technology, innovation, and national digital transformation.	- Previously, public servants and officials were almost completely prohibited from business activities, inadvertently limiting their ability to directly contribute to sectors requiring innovation and creativity. The new provision creates a legal framework for public servants and officials to develop innovative ideas, commercialize research results, and contribute to the innovation ecosystem. - However, transparent and clear supervision mechanisms are necessary; without proper controls, there is risk of policy abuse and potential exploitation of positions to benefit personal enterprises during official duties.