Vietnam Tightens Anti-Money Laundering Rules, Requiring Banks to Trace Ultimate Owners Across Borders

Vietnam has introduced stricter beneficial ownership and customer due diligence requirements, obliging banks and other regulated institutions to investigate complex corporate structures, identify individuals exercising ultimate control, and examine ownership arrangements extending beyond the country's borders.

The measures, introduced under Government Resolution No. 66.23/2026/NQ-CP, took effect on July 24, 2026, and establish more detailed requirements for identifying the individuals behind corporate customers, foreign investment funds, trusts and comparable legal arrangements.

The regulatory changes form part of Vietnam's efforts to strengthen financial transparency, address deficiencies in its anti-money laundering framework and fulfil international commitments relating to tax information exchange.

The resolution amends selected provisions of Vietnam's 2022 Anti-Money Laundering Law, Decree No. 19/2023/ND-CP and Circular No. 27/2025/TT-NHNN. Although the government's stated objective includes removing legal obstacles to international tax information exchange, the measures have broader implications for financial institutions' customer identification, risk assessment and recordkeeping procedures.

Banks Must Investigate Every Layer of Corporate Ownership

One of the most significant changes concerns the identification of beneficial owners in companies with complex or multilayered shareholding arrangements.

Under the revised framework, reporting entities must identify individuals who directly or indirectly hold at least 25% of a company's charter capital or voting shares. The threshold also applies where an individual's combined direct and indirect holdings reach the required percentage.

Importantly, financial institutions cannot limit their investigations to a customer's immediate shareholders. They must examine successive layers of corporate ownership to determine which natural persons ultimately satisfy the beneficial ownership criteria.

This requirement is particularly relevant where Vietnamese companies are owned through foreign holding companies, intermediary corporations or other cross-border structures.

For example, where a Vietnamese business is owned by an overseas company that is itself controlled through several additional corporate entities, identifying the first foreign shareholder will not necessarily satisfy the new requirements. Banks must continue examining the ownership chain until the relevant individuals are identified.

The resolution does not establish a domestic jurisdictional boundary at which ownership tracing may automatically stop.

The rules also address situations in which several individuals are connected through personal relationships or contractual arrangements. Where their combined ownership reaches the 25% threshold, the relevant individuals must be considered under the beneficial ownership identification criteria.

Consequently, compliance assessments must consider not only individual shareholding percentages but also relationships between shareholders that may influence collective ownership or control.

To demonstrate compliance, institutions may need to maintain detailed ownership charts, supporting corporate documentation, calculations of direct and indirect holdings, and evidence explaining how relevant individuals were identified.

Effective Control Takes Priority When Ownership Percentages Are Insufficient

The revised framework recognises that beneficial ownership cannot always be established solely through shareholding percentages.

Where no individual or connected group meets the ownership threshold, or where there are reasonable grounds to doubt whether the identified shareholders are the actual beneficial owners, reporting entities must investigate whether individuals exercise control through other means.

The resolution identifies several indicators of effective control, including authority over corporate governance, changes to constitutional documents, organisational structures, financial policies, investment decisions and business operations.

The ability to appoint or remove senior executives or members of governing bodies is another important indicator.

These provisions are particularly relevant to businesses with dispersed shareholdings, where no single investor holds a qualifying percentage but certain individuals may retain substantial decision-making authority.

Banks must therefore look beyond formal ownership records and consider governance documents, contractual rights and other evidence demonstrating who can ultimately direct an organisation.

If neither the ownership threshold nor the alternative control criteria identifies a qualifying individual or group, the resolution provides a fallback mechanism involving the senior manager with the greatest authority to act on behalf of the organisation.

This mechanism is subject to specified conditions, including an exclusion relating to individuals representing state capital.

For companies listed on Vietnamese or foreign stock exchanges, the framework also allows relevant identification to rely on publicly disclosed information where that information is available to the reporting institution.

The changes reinforce the distinction between identifying a person recorded as a shareholder or executive and establishing the actual legal or factual basis of that person's control.

Foreign Investment Funds Face Expanded Transparency Requirements

The resolution introduces specific beneficial ownership identification criteria for funds established under foreign law.

Reporting entities must identify individuals occupying relevant positions within such funds, including founders, members of management boards, beneficiaries or groups of beneficiaries, and individuals exercising ultimate control directly or indirectly.

Where a company or another legal arrangement occupies one of these positions, the identification process must extend to the individuals behind that entity or arrangement.

The provisions address an important challenge in cross-border financial relationships, where investment funds may operate through multiple legal entities and jurisdictions.

Instead of relying exclusively on the identity of a fund's registered manager or immediate legal owner, financial institutions must examine the roles and underlying control relationships established by the applicable criteria.

These requirements are intended to improve the ability of regulated institutions to identify the individuals ultimately associated with complex investment structures, while recognising that the existence of an overseas fund or layered ownership arrangement does not itself indicate illicit activity.

Trusts and Similar Legal Arrangements Face Greater Scrutiny

The measures also establish identification requirements for trusts and comparable legal arrangements.

Relevant individuals and parties include settlors, trustees, beneficiaries or beneficiary groups, potential beneficiaries, protectors where applicable, and individuals who ultimately exercise control.

For arrangements operating under different legal systems, institutions must examine equivalent functions even where the terminology or legal structure differs from that of a conventional trust.

Where a relevant role is held by a company or another legal arrangement, the institution must identify the ultimate beneficial owners behind that participant.

This approach reflects the fact that control over trust assets may be distributed among several parties with different legal powers and financial entitlements.

A settlor may establish an arrangement, a trustee may administer assets, a protector may exercise oversight rights, and beneficiaries may receive economic benefits. Identifying one party does not necessarily reveal everyone relevant to the beneficial ownership assessment.

The resolution also strengthens transparency and recordkeeping obligations for trustees and equivalent persons.

They must collect and update information about relevant participants, including beneficial ownership information where a participating party is a legal entity.

Specified information must be retained for at least five years after the trustee or equivalent person ceases involvement in the arrangement.

The State Bank of Vietnam and other competent authorities may request this information in connection with their applicable supervisory, investigative and criminal justice responsibilities.

These provisions are designed to improve the availability of ownership information when authorities examine financial transactions, investigate suspected misconduct or seek information about arrangements involving multiple jurisdictions.

Customer Risk Classification and Due Diligence Requirements Revised

Alongside the beneficial ownership reforms, Vietnam has introduced changes to customer risk classification and the frequency of customer information updates.

Under the revised requirements, regulated institutions must classify customer risk immediately or within 10 working days following customer identification.

The framework establishes different minimum frequencies for refreshing customer identification information according to assessed risk.

Customer risk category	Minimum update frequency
Low risk	Every five years
Medium risk	Every two years
High risk	Annually

These intervals establish a risk-based approach to maintaining accurate customer records.

However, institutions cannot rely exclusively on scheduled reviews. Customer information must also be updated when new risks emerge or when changes to previously collected identification information become known.

A change in corporate ownership, for instance, may require an institution to reassess the individuals exercising control and determine whether the customer's existing risk classification remains appropriate.

The resolution also provides for enhanced customer identification measures in circumstances involving relevant suspicions of money laundering, terrorist financing or proliferation financing.

Enhanced measures additionally apply in specified high-risk situations identified by the reporting institution.

These requirements reinforce the importance of ongoing customer monitoring and the ability to respond promptly to new information rather than waiting for the next periodic review.

Stronger Verification and Documentation Standards

The regulatory amendments also address the information and documentation used to verify customer identities and beneficial ownership.

Depending on the type of customer, relevant evidence may include corporate establishment and registration documents, constitutional records, appointment documentation, information about authorised representatives and records concerning ultimate beneficial owners.

Other reliable information sources may also be used where relevant.

For financial institutions, the challenge extends beyond collecting documents or recording the names of individuals in compliance databases.

The identification process must establish a defensible connection between the available evidence and the conclusion that a particular individual owns or controls an organisation.

In complex cases, this may require comparing corporate registers, shareholder records, governance documents and contractual arrangements across multiple entities.

The Financial Action Task Force's guidance on beneficial ownership provides an international reference point for these requirements, emphasising the importance of accurate, current information and the use of multiple sources to establish the individuals behind legal entities.

For banks, a well-supported beneficial ownership assessment can also make it easier to explain decisions to regulators and respond to subsequent requests from competent authorities.

Reforms Come Amid Continued International Monitoring

Vietnam's regulatory changes come against the backdrop of continuing international scrutiny of its anti-money laundering and counter-terrorist financing framework.

On June 19, 2026, the Financial Action Task Force (FATF) retained Vietnam among jurisdictions subject to increased monitoring.

The international standard-setting body identified the need for further improvements, including ensuring that competent authorities can access accurate and up-to-date beneficial ownership information.

Its concerns also encompassed the effectiveness of financial supervision, financial intelligence and investigations.

The new resolution addresses important aspects of the legal framework governing ownership identification and transparency, but legislative amendments alone do not establish whether the underlying deficiencies have been resolved.

Effective implementation will depend on whether financial institutions consistently apply the requirements, obtain reliable information and make that information available to authorities when required.

The ability to trace ownership through foreign companies and identify control exercised through non-shareholding arrangements is likely to be an important practical consideration in assessing the reforms' effectiveness.

Temporary Framework to Remain in Force Until February 2027

Resolution No. 66.23/2026/NQ-CP establishes a temporary regulatory framework covering the period from July 24, 2026, through February 28, 2027.

Certain provisions may cease to apply earlier if specified replacement legislation or regulatory instruments enter into force.

During the applicable period, the resolution also establishes rules governing conflicts with other relevant legal provisions.

Its transitional arrangements preserve the legal validity of information lawfully collected under the applicable requirements.

The temporary nature of the framework creates an additional compliance consideration for financial institutions, which must implement the current obligations while preparing for possible legislative changes.

Banks and other reporting entities may therefore need to review customer due diligence policies, beneficial ownership identification procedures, risk assessment methodologies, verification practices and record retention arrangements.

Institutions with customers operating through international holding structures, investment funds or trusts may face particularly demanding assessments because relevant documentation and control relationships can extend across multiple jurisdictions.

Implementation Will Determine the Reforms' Effectiveness

The broader significance of Vietnam's reforms lies in the shift from identifying formal shareholders toward establishing the individuals who ultimately own or exercise control over financial customers.

By requiring institutions to examine successive ownership layers, assess connected shareholders, investigate alternative control arrangements and identify relevant parties in foreign funds and trusts, the framework seeks to reduce gaps in beneficial ownership transparency.

The revised risk classification and information update requirements also link initial customer identification to continuing due diligence.

Nevertheless, the practical effectiveness of the measures will depend on the quality of the evidence collected and the ability of financial institutions to substantiate their findings.

Complex corporate structures and overseas legal arrangements are not inherently suspicious.

They can, however, make ownership and control more difficult to establish, increasing the importance of reliable documentation and thorough verification.

For Vietnamese banks and other regulated institutions, the central challenge will be demonstrating not merely that a beneficial owner has been recorded, but that the identification is supported by credible evidence and reflects the individual's actual ownership or control.

As Vietnam works toward strengthening its international anti-money laundering standing, the implementation of these requirements will provide an important indication of whether the country's legal reforms are translating into greater financial transparency and more effective regulatory oversight.

By fLEXI tEAM