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| Processing shrimp for export at a factory of the Minh Phu Seafood Corp. in Hau Giang province__Photo: VNA |
A draft revised Law on Enterprises has recently been unveiled with the addition of provisions on beneficial owners of enterprises, which is expected to help Vietnam implement international commitments on anti-money laundering and provide a favorable, secure and trustworthy business environment for businesses and entrepreneurs for development.
Under the draft, beneficial owners of enterprises are defined as individuals who have actual authority to dominate or control enterprises by directly or indirectly owning charter capital of the enterprises.
In order to become beneficial owners of an enterprise with the legal person status, individuals must meet one of three criteria: (i) actually directly or indirectly owning 25 percent or more of charter capital of the enterprise; (ii) directly or indirectly receiving more than 25 percent of dividends or profits of the enterprise; or (iii) ultimately having the right to dominate the enterprise.
The right to dominate an enterprise means the right to dominate the enterprise’s operation through ownership, share acquisition, capital contribution, or decision-making within the enterprise.
Enterprises would take responsibility for collecting, updating and storing information about beneficial owners. They would have to ensure the truthfulness and accuracy of information about beneficial owners in enterprise registration dossiers, and notify business registration agencies of information about beneficial owners at the time of registration.
Competent state agencies and law enforcement agencies might request business registration agencies to provide information about beneficial owners stored on the National Information System on Business Registration to perform the tasks related to crime prevention and control.
According to the drafting board, international practices on corporate governance impose requirements on transparency of information about beneficial owners. Identification of beneficial owners and provision of information about beneficial owners are important measures to prevent and combat acts of trade fraud, tax evasion, corruption, money laundering and terrorist financing.
Lawyer Truong Thanh Duc, Director of ANVI Law Firm highlighted the significance of outlining regulations on beneficial owners. This not only demonstrates the country’s commitment to international standards but also helps develop a more transparent, secure and favorable business investment environment.- (VLLF)
