LEGAL UPDATE: AMENDMENTS TO THE ENTERPRISE LAW 2025

I. Introduction

On June 24, 2025, at the 9th Session of the 15th National Assembly, Law No. 76/2025/QH15 amending and supplementing a number of articles of the Law on Enterprises 2020 was passed, with 455 delegates voting in favor (accounting for 95.19% of the total number of delegates). This Law will officially take effect from July 1, 2025. Below are the key highlights of the amendments:

II. Key changes introduced by the draft

1. Introduction of Beneficial Ownership Regulations
The Law requires enterprises to declare information about beneficial owners when registering a business, in order to increase transparency and limit the establishment of shell companies or artificial capital increases. This provision is consistent with the recommendations of Vietnam’s international commitments.
This change brings enhanced transparency when enterprises must disclose information about the actual owners, helping to minimize the risks of money laundering and financial fraud. In addition, enterprises need to invest more time and resources to collect, verify, and report information on beneficial owners.

2. Amendments to Restrictions on Establishing, Contributing Capital, and Managing Enterprises
Officials, public employees, and civil servants under the Law on Cadres and Civil Servants and the Law on Public Employees are not allowed to establish or manage enterprises, except in cases permitted by the law on science, technology, innovation, and national digital transformation.
Persons who are being criminally prosecuted, temporarily detained, serving prison sentences, or are banned by the Court from holding certain positions or practicing certain professions are also subject to prohibition.
This amendment will help prevent officials and civil servants from taking advantage of their positions to engage in business, ensuring fairness and transparency in state management.
Enhancing legal responsibility: Individuals who violate the law will be restricted from participating in the business market, contributing to improved corporate governance quality.

3. Regulations on Dividends and Market Value of Capital Contributions/Shares
Dividends are clearly defined as post-tax profits paid for each share in cash or other assets. Regulations related to determining the market value of capital contributions or shares are supplemented to ensure transparency in capital transactions.
This change will increase transparency in capital transactions. Clear determination of market value helps minimize disputes related to share or capital contribution valuation. Shareholders and investors are ensured their rights through transparent profit distribution regulations.
However, it will also lead to increased costs for professional valuation units to comply with the regulations.

4. Shareholders’ Right to Convene General Meetings
Shareholders or groups of shareholders have the right to convene the General Meeting of Shareholders in cases where the Board of Directors fails to do so as prescribed, with reasonable costs reimbursed by the company.
This content will enhance the power of minority shareholders to be better protected, with the ability to monitor and require the Board of Directors to fulfill their responsibilities. This regulation promotes accountability of the Board of Directors and improves governance quality.

5. Stricter regulations on business registration declarations
The Law strictly prohibits acts of falsified, dishonest declarations, or declaration of charter capital not in accordance with reality.

6. Additional cases of charter capital reduction
Joint-stock companies may reduce charter capital through returning contributed capital to shareholders in proportion to their ownership if the company has been operating for more than 2 years and has no debts; or buying back issued shares that have not been fully paid for.

1. Key Advantages and Challenges for Businesses

The 2025 amendment to the Law on Enterprises introduces several key advantages: Enhances transparency through the mandatory disclosure of beneficial ownership, improving trustworthiness in business operations and regulatory compliance. Strengthens accountability of legal representatives, helping to reduce legal risks and safeguard the interests of shareholders and investors. Eliminates unqualified individuals from corporate governance, fostering a healthier and more competitive business environment. Promotes digital transformation in administrative procedures, especially enterprise registration using digital signatures, making the process more efficient and accessible.

However, certain challenges may arise during implementation: Identifying and disclosing beneficial ownership may be complex, especially for companies with intricate ownership structures or foreign stakeholders. Risk of administrative sanctions for inaccurate or delayed disclosures, requiring greater awareness and strict compliance from businesses. Small or rural enterprises may struggle with digital signature systems, due to limited technical infrastructure or regulatory knowledge. Significant time and resources may be needed for internal training, system upgrades, and compliance adaptation, particularly in the early implementation phase.

HOW ALTAS CAN ASSIST YOU:

ALTAS LAW is uniquely positioned to assist your business in navigating these complex administrative reforms. We offer a comprehensive suite of legal and business services designed to provide seamless support during this transition period:

• Accounting and Tax Services: We also offer accounting and tax services to help your business manage the financial implications of these reforms, including tax planning, reporting, and compliance.

• Licensing & Regulatory Compliance: We will meticulously review your existing licenses and permits, advise on necessary amendments or renewals, and guide you through the process of obtaining any new approvals. Our team will also ensure your compliance with all relevant regulatory changes.

Please feel free to reach us via email contact@altas.vn to discuss your specific concerns and explore how we can navigate these reforms successfully.

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Written by: Ms Nguyen Nhac Thien An - Manager Director at ALTAS Accounting & Senior Legal Assistant Nguyen Tran Ngoc Thach - ALTAS Law 

Date: 06/07/2025