A shareholders’ agreement is essentially a “contract signed among the owners” to establish the order of power within a company. Although shareholders’ agreements play an important role in corporate governance practice, they are not mentioned in the Law on Enterprises. In 2025, the situation shifted notably as the role of shareholders’ agreements has begun to change.

The shareholders’ agreement has long been a familiar tool of corporate governance in Vietnam. Though it is not mentioned in any official legal document, the shareholders’ agreement is present in almost all capital contribution transactions, from small startups to large corporations with foreign investment.

In essence, this agreement is a “contract signed among the owners” to establish the internal order of power within an enterprise: who has veto rights, who has the authority to appoint key personnel, who controls the cash flow, who can block share transfers or amendments to the charter.

Existing in “uncertainty”?

What is striking is that, despite its important role in corporate governance practice, the shareholders’ agreement is not mentioned in the Law on Enterprises. No provision of the Law on Enterprises defines its content, scope, legal value, or how to enforce it.

Neither any agency requires enterprises to submit or disclose the shareholders’ agreement, nor do administrative procedures related to business registration make reference to its existence. This regulatory gap renders the shareholders’ agreement an “invisible subject”: extremely important in the operation of internal power but completely outside the official legal framework.

For many years, investors and enterprises have had to accept that the shareholders’ agreement is merely a civil contract, nothing more. That the law has yet to ‘recognize’ shareholders’ agreements gives rise to ambiguity: How much legal value does the shareholders’ agreement have? Will state authorities take it into account? And in disputes, will courts prioritize enforcing the shareholders’ agreement?

Beneficial ownership – Indirect recognition of shareholders’ agreements

A notable shift occurred in 2025 when the mechanism to identify beneficial owners was implemented, and the role of shareholders’ agreements has begun to change. In internal guidance documents sent to business registration offices, the Ministry of Finance introduced an important point of view: control over an enterprise arises not only from the ratio of capital ownership but also from private agreements among shareholders.

In this guidance, the term “control” is explained to include situations where a company cannot pass significant decisions without the approval of a particular individual. Importantly, the guidance acknowledges that such control can be established through a shareholders’ agreement, a members’ agreement, or even informal commitments such as the influence of a founding shareholder or the market reputation of a strategic advisor.

Although this recognition of a shareholders’ agreement takes place within an enterprise, it will bring positive effects for corporate governance as well as for resolving internal disputes. For the first time, the shareholders’ agreement is considered a basis for determining who controls the company – a crucial factor in identifying the beneficial owner. When a company declares its controlling persons, it can no longer rely solely on the shareholder register but must also take into account the contents of the shareholders’ agreement and related arrangements.

Legal consequences and new requirements for enterprises

This indirect recognition is not merely symbolic, but it creates new responsibilities for enterprises: provisions in shareholders’ agreements, once regarded as internal or confidential, may now serve as grounds for identifying beneficial owners.

If a shareholders’ agreement and/or other internal arrangements confer corporate control on an individual but the company fails to disclose this information, it may be deemed to have provided incomplete or inaccurate information – a violation against the backdrop of intensified corporate transparency.

Future trend: from indirect recognition to codification?

More broadly, this move reflects a development aligned with the practical needs of corporate governance in Vietnam. The law cannot effectively govern a modern company by looking only at shareholding ratios, since real power often lies elsewhere – particularly in internal agreements among shareholders.

Shareholders’ agreements have yet to be codified and remain absent from the Law on Enterprises, but their inclusion in the process of identifying beneficial owners shows that they are gradually being “seen” by the law. In the future, when the Law on Enterprises is amended, lawmakers may consider formally recognizing shareholders’ agreements in the legal framework of corporate governance.

by Mr. Tran Minh Quyet