Nominee Ownership in Vietnam: The Risk Runs Both Ways

A nominee arrangement often begins with a practical explanation.

A trusted local person will hold the shares. A relative will appear on the company register. A private declaration or power of attorney will confirm who the “real owner” is.

The arrangement may work while everyone remains aligned.

The problem begins when the registered holder and the person who supplied the capital tell different stories.

Two Vietnamese appellate judgments illustrate the same structural risk from opposite directions. In one case, the alleged beneficial owner could not displace the registered members. In the other, the registered member lost her status after the evidence showed that she was only holding the interest for others.

The lesson is not simply that registration always prevails—or that the person who paid will eventually be recognised.

The deeper lesson is that nominee ownership creates two competing versions of ownership, neither of which may survive a dispute.

Two disputes, opposite claims

In the first case, a company was registered with charter capital of VND20 billion.

The company records showed three members holding 40%, 30% and 30%. One member later claimed that he had supplied the entire capital and that the other two members were merely holding their interests on his behalf.

He relied on an earlier executive arrangement, asset payments and transfers that he said proved the true ownership structure.

The court examined more than the private explanation.

It considered the timing and purpose of the transfers, auction payments, capital contribution documents, member certificates, company records and the parties’ conduct after incorporation.

Those records consistently reflected three separate members.

The court rejected the nominee claim and confirmed the registered 40%–30%–30% ownership structure. The claimant was also required to bear VND350 million in audit costs.

The second case moved in the opposite direction.

A woman had formally acquired a 19.048% membership interest through two capital transfer agreements. She was recorded in the members’ register, and the enterprise registration was amended accordingly.

When the company later increased its capital, her apparent interest was reduced to 10%. She challenged the corporate changes and denied signing one of the relevant meeting records.

The court accepted that the signature on that meeting record was not hers.

But another document became decisive.

In a written confirmation, she had stated that all money used for the investment belonged to her two minor grandchildren and that her name appeared only because they could not be registered themselves. The sellers also said that payment had come from the children’s father, not from her.

The court concluded that she was only a nominal holder. It declared the transfer agreements invalid, removed her membership status and rejected her claim for company profits.

Registration protected her only until the wider evidence was examined.

Why nominee ownership can fail from either side

These judgments expose a double vulnerability.

The person supplying the capital may assume that a private agreement, declaration or power of attorney will be sufficient to reclaim the shares later.

But a private document does not automatically replace the corporate register, valid capital contribution documents, member resolutions or the legal requirements for acquiring an ownership interest.

At the same time, the registered holder may assume that the name appearing on the enterprise records provides permanent protection.

That assumption can also fail where the fund flow, written admissions and conduct of the parties show that the registration was merely formal.

The evidence that proves a nominee arrangement may create another problem.

Where the structure was intended to bypass a legal restriction, the same evidence used to establish the beneficial owner’s interest may also support an argument that the underlying transaction is invalid.

A nominee declaration therefore does not necessarily cure the structure. It may document the risk more clearly without making the intended ownership enforceable.

This is why nominee disputes cannot be assessed through one document alone.

The real evidentiary picture includes:

• who transferred the money;
• what each transfer was stated to be for;
• who signed the capital contribution and transfer documents;
• who exercised voting and management rights;
• who received profits or distributions;
• how the transaction appeared in accounting and corporate records; and
• whether the intended ownership structure was legally available in the first place.

If these elements point in different directions, the investor is not holding a secure asset. The investor is holding a future evidentiary dispute.

The pre-transaction decision

For a foreign investor, the correct question is not:

Will the nominee sign a declaration confirming that the investment belongs to me?

The better questions are:

If the nominee later denies the arrangement, what legally recognised record proves the investor’s ownership and control?

And:

If the nominee admits the arrangement, does that admission reveal that the structure was designed to avoid a legal restriction?

A pre-transaction review should therefore test the arrangement across six connected dimensions.

The proposed ownership must be legally available. The investor must have enforceable control, not merely informal influence. The fund flow must identify what the capital acquired. Corporate governance documents must match the intended rights. Evidence must remain coherent if the relationship deteriorates. Recovery must be realistically available if the structure fails.

Where these elements cannot be aligned, the transaction should not proceed merely because the nominee is currently trusted.

The appropriate decision may be to restructure the investment, impose conditions before any funds are transferred or decline the transaction altogether.

Trust may explain why a nominee was selected.

It does not determine who will own the asset when the relationship ends.

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Case basis: Appellate Judgment No. 02/2023/KDTM-PT dated 5 January 2023 and Appellate Judgment No. 35/2024/KDTM-PT dated 19 June 2024, High People’s Court in Ho Chi Minh City. Party names and selected facts have been simplified for readability.