Introduction

A “nominee structure” is an arrangement in which one person (the nominee) holds an asset — typically shares, capital contribution, or land use rights — in its own name for the economic benefit of another (the beneficial owner), under a private agreement between them. In Vietnam, nominees are commonly used to work around foreign ownership caps, land and housing restrictions, and licensing requirements, and to give a foreign party practical control it cannot hold directly.

Nominee arrangements are common in commercial practice, but they are not an authorised legal structure. They exist in the gap between ordinary contract law and a set of statutory doctrines — primarily the Civil Code’s prohibition on sham transactions — that make them legally fragile, a position two 2026 developments have sharpened considerably. This article summarises the legal basis, enforcement risk, and regulatory direction of nominee arrangements, including the new prohibition introduced by Decree 296/2026/NĐ-CP.

Why Nominee Structures Are Used

  • Foreign ownership restrictions. Certain sectors are closed, capped, or conditional for foreign investors, prompting some to hold an interest indirectly through a Vietnamese nominee rather than obtain the required approvals.
  • Land and housing restrictions. Foreign individuals and organisations are not recognised as “land users,” and foreign housing ownership is capped under the Housing Law 2023 — prompting some to use a nominee to hold land use rights or residential property.
  • Administrative convenience. A local nominee can simplify company registration, bank account opening, and day-to-day compliance for a foreign party.

Vietnamese law contains no statute that specifically authorises, regulates, or even defines “nominee” arrangements. Their legal fate is instead determined by a combination of general civil law, investment law, and — as of 2025 and 2026 — two targeted regulatory reforms, summarised below.

Instruments What it does

Civil Code 2015
General sham-transaction doctrine: the concealing (nominee) transaction is invalid; the concealed (beneficial-ownership) transaction survives only if it is independently lawful.

Law on Investment 2025
Empowers the investment registration authority to terminate a project built on a sham transaction — a faster administrative alternative to a court judgment.

Law on Enterprises (amended) & Decree 168/2025/NĐ-CP
Introduces mandatory beneficial ownership (BO) disclosure, eroding the anonymity a nominee structure is often used to preserve.

Decree 296/2026/NĐ-CP
First express prohibition on nominee capital contributions; expands BO disclosure into a mandatory, three-step look-through test.

The sham-transaction doctrine

Under the Civil Code 2015, a civil transaction is valid only where the parties have capacity, act voluntarily, and the transaction’s purpose and content are lawful. Where a transaction is established merely to conceal another, the concealing (sham) transaction is invalid, while the concealed transaction remains valid unless it is independently unlawful — for instance, because it is a foreign investment in a restricted sector made without the required approval. Courts and commentators have treated the typical nominee structure as exactly this kind of concealment: registered ownership (sham) hiding beneficial ownership (concealed).

If a court voids a nominee arrangement as a sham transaction, the default remedy is restitution — but this offers limited protection in practice, because Vietnam’s registration systems treat the registered holder as the legal owner. A private side agreement does not itself alter legal title, so a beneficial owner’s remedy against an uncooperative nominee is typically a personal damages claim, not a proprietary right to recover the asset.

Enforcement risk and the new Decree 296 prohibition

The Law on Investment 2020 and its successor, Law on Investment 2025 give the investment registration authority power to terminate a project built on a sham transaction, adding an administrative risk layer alongside the civil-law and enforcement risks .

On 23 July 2026, Decree 296/2026/NĐ-CP amended Decree 168/2025/NĐ-CP on enterprise registration to add, for the first time, an express prohibition: owners, shareholders, and members of a company must fully and personally perform their own capital contribution obligations and may not đứng tên hộ — stand in another person’s name — when contributing capital. This closes a real gap: previously, Vietnamese law addressed nominee arrangements only indirectly through the sham-transaction doctrine, without naming or targeting the practice as such. No dedicated administrative-penalty provision for the new prohibition has yet been identified in public guidance, and it is not yet clear how registration authorities will detect it in practice — the more likely near-term enforcement channels remain dossier rejection, the Law on Investment’s project-termination power, and the BO look-through obligations below.

Decree 296 also expands the beneficial ownership rules first introduced by Decree 168/2025, replacing the earlier “if any” approach with a mandatory, sequential look-through: first, individuals owning 25% or more of charter capital or voting rights (aggregated across affiliated family members, and covering every partner in a general partnership); second, whoever exercises effective control if no one meets that threshold; and third, the most senior manager as a final fallback. Together with the new capital-contribution prohibition, this narrows the room for a nominee structure to remain both undisclosed and, once disclosed, uncontested.

Application of Nominee Structures in Practice

Nominee Structures in Real Estate

Nominee arrangements are also used in the land and housing sectors, where foreign individuals and organisations are not recognised as land users and foreign housing ownership is capped under the Housing Law 2023. This is a particularly risky category: land use right and housing certificates carry strong registration-based protection that is very difficult to dislodge even with clear evidence of a side agreement, and — outside narrow categories such as overseas Vietnamese (Việt Kiều) formalised under the Land Law 2024 — no nominee arrangement can confer a land right that the law otherwise withholds from an ordinary foreign party; it merely disguises the fact that the true economic owner does not hold one.

“Domestic Look” Structure for Foreign Investment

In some foreign investment structures, a nominee shareholding is layered with contractual control mechanisms – a nominee shareholding arrangement is layered with contractual control mechanisms: a proxy agreement giving the foreign investor’s designated entity the right to vote the nominee’s shares, an exclusive call option allowing the foreign investor to acquire the shares if and when permitted, an equity pledge securing the nominee’s obligations, and loan or service agreements that channel the underlying company’s profits to the foreign investor’s affiliate. As a result, a foreign investor derives economic benefit and practical control without direct equity ownership. These structures are used in practice, but they occupy a legal grey area: separating economic and practical control from registered legal ownership to work around a foreign-ownership restriction is the same fact pattern the sham-transaction doctrine and the Law on Investment’s termination power are designed to address, and Vietnamese authorities have shown increasing scrutiny of arrangements that appear designed to bypass ownership conditions.

Practical Risk Assessment

The table below compares how each layer of risk falls on the beneficial owner and on the nominee. Contractual protections — declarations of trust, powers of attorney, pledges, penalty clauses — can mitigate but do not eliminate these risks, because a court may treat the entire suite of documents as evidence of, rather than a defence to, a sham transaction.

Risk Beneficial Owner (Foreign Investor) Vietnamese Nominee

Administrative
The investment project is exposed to termination if regulators identify a sham transaction. The underlying arrangement now breaches Decree 296/2026/NĐ-CP's express prohibition, independent of any sham-transaction finding.
The enterprise's registration may be revoked or dissolved alongside the terminated investment and penalties.

Civil liability
The nominee agreement may be declared void as a sham transaction if disputed in court.
The same litigation exposes the nominee's role and can result in a damages award against it.

Practical / Enforcement
No proprietary claim to the asset — only a personal damages or restitution claim against the nominee, which may be difficult to enforce.
Bears personal legal and reputational exposure as registered owner, including liability to third parties relying on the public register.

Disclosure (BO Regime)
From mid-2025, mandatory BO disclosure reduces the anonymity the structure was designed to provide; inaccurate disclosure is an independent compliance failure.
May itself be identified and declared as the beneficial owner if disclosure obligations are not properly met.

Conclusion

Nominee structures remain a recognisable feature of Vietnamese commercial practice, but they are not a legally sanctioned tool. The Civil Code’s sham-transaction doctrine, the Law on Investment’s termination power, and the principle that the registered holder is the legal owner already made them structurally fragile. Two 2026-effective reforms now compound that fragility: the mandatory BO disclosure regime erodes the anonymity nominees were often used to provide, and Decree 296/2026/NĐ-CP’s express prohibition turns the underlying arrangement into a direct breach of the enterprise-registration regime, rather than a risk that surfaces only if litigated or investigated. Foreign investors and their advisers should treat a nominee arrangement as a high-risk workaround, and evaluate lawful alternatives — licensed FDI, genuine joint ventures, or business cooperation contracts — before relying on one to access a restricted sector or asset class.