Power of Attorney and Declaration of Trust Won't Save You in Vietnam: The 2025 UBO Crackdown

Power of Attorney and Declaration of Trust Won't Save You in Vietnam: The 2025 UBO Crackdown

Foreigners who hit the 30 percent quota cap in a building, or who fall outside the categories of property foreigners are legally allowed to buy, often hear the same suggestion from a broker or a self-styled fixer. "Put it in your Vietnamese friend's name. Sign a power of attorney. Sign a declaration of trust. You will be protected on paper." That advice has always been wrong. As of 2026, it is also dangerous in ways the broker probably has not explained.

The full breakdown is here: https://bektu.com/blog/vietnam-power-of-attorney-declaration-trust-ubo-decree-168-2025.

The fundamental legal problem

Vietnamese property law is built on a simple principle. The person named on the Pink Book (So hong, the slang term for the Giay chung nhan quyen su dung dat, quyen so huu nha o, the ownership certificate) is the legal owner. Full stop. There is no concept of a beneficial owner standing behind a legal owner. The 2015 Civil Code does not recognize the common-law idea of a trust where one person holds title for the benefit of another. A power of attorney does not transfer ownership. It transfers authority to act on behalf of an owner, which can be revoked unilaterally by the owner at any time.

That is the architecture you are working against when you sign a nominee arrangement in Vietnam. The Vietnamese citizen whose name is on the Pink Book owns the property. Whatever side document you signed, in any language, has no automatic force in Vietnamese court.

What a Vietnamese court actually does with these documents

Vietnamese courts have been remarkably clear on this. When a foreign buyer brings a power of attorney or a declaration of trust to court after the nominee refuses to transfer the unit, the court applies the 2015 Civil Code's rules on sham transactions. Under Article 124 of the Civil Code, a transaction whose stated purpose conceals another purpose is invalid. The standard nominee arrangement, where a Vietnamese citizen is named as the owner to disguise foreign ownership that the law would otherwise restrict, fits the legal definition of a sham. The court does not enforce a sham. It usually voids it.

What happens to the property when the sham is voided varies. In some cases, the named owner keeps the property and the foreigner gets nothing. In others, the property is treated as held under an unjust enrichment claim, but recovery is slow, capped, and often does not include the property itself, only a money judgment that may never be collected.

Vietnamese Investment Law adds another layer. If the project the property sits in was licensed for foreign investment, and the licensing authority discovers a sham transaction, it can revoke the project's license entirely. That risk falls on the developer as well as the buyer.

The 2025 change that closed the back door

For years, the workaround in some sectors was to use a Vietnamese-owned company as the nominee. The foreigner held shares through a layered corporate structure, the Vietnamese company held the property, and the connection between them was buried in private agreements. That structure is now harder to maintain.

Decree 168/2025/ND-CP, which took effect in late 2025 and is being actively enforced through 2026, requires Ultimate Beneficial Owner reporting to Vietnam's business registration authorities. Every company that owns property, holds an investment license, or runs an active business must declare the natural person at the top of the ownership chain. The threshold for disclosure is currently set at 25 percent direct or indirect ownership, but several drafts under discussion would lower it further.

For nominee structures, the practical effect is binary. If you disclose the foreigner as the beneficial owner of a Vietnamese company that owns property in a restricted category, the licensing authority can review or revoke the company's right to hold that property. If you do not disclose, you are now in violation of the UBO regulations themselves, which carry administrative fines, business registration penalties, and in repeat or large-scale cases, criminal exposure for false declarations.

The decree was modeled on global anti-money-laundering standards. Vietnam wants to stay off the Financial Action Task Force grey list, and UBO transparency is a major part of that. Foreign buyers using nominee structures for property are not the main target, but they are caught in the same net.

The death scenario

The cleanest illustration of why nominee structures break down is what happens when the nominee dies. The Vietnamese Civil Code treats property registered in a person's name as part of that person's estate at death. The legal heirs, usually spouse, children, and parents in that order, inherit the property under the statutory rules. A side document signed with the foreigner has no priority over the inheritance claim.

There are real cases in HCMC and Da Nang where a foreigner held an apartment for years through a Vietnamese friend, the friend died unexpectedly, and the apartment passed to the friend's estranged spouse. The foreigner had a notarized power of attorney, a signed declaration of trust, and bank records showing every payment. None of it mattered in the inheritance proceeding. The unit became the spouse's property.

If the nominee gets divorced, the property can also fall into the marital estate division. If the nominee runs into civil debt or business creditors, the property can be seized to satisfy a judgment. The foreigner standing behind the nominee has no protected priority claim.

What "safe" alternatives actually exist

Not many. The legitimate paths are narrower than most brokers suggest. A foreigner married to a Vietnamese citizen can hold property under specific rules that recognize the marital relationship, though the protections still favor the Vietnamese spouse in a dispute. A foreign-invested company licensed in real estate business can hold and develop property, but cannot hold residential units for personal use. A foreigner can buy directly within the 30 percent quota in approved commercial developments, which is the cleanest route.

Bektu (https://bektu.com) tracks which buildings have foreign quota still available, which developers have a history of clean Pink Book delivery on foreign-allocated units, and which projects have had quota or nominee disputes in the past. That information is the difference between buying a quota-eligible unit you can defend in court and buying a position you cannot. The platform does not sell property and does not push transactions. It compiles the verification data that brokers usually omit.

The honest summary

The nominee, power of attorney, and declaration of trust path has never been protected in Vietnam. It was tolerated when enforcement was loose. The 2025 UBO regime and the active anti-corruption posture coming out of cases like Truong My Lan at Saigon Commercial Bank have changed the enforcement calculus. The people who lose under this system are usually the foreign buyers, not the brokers who set up the structure and walked away years ago with a commission.

If a deal requires a Vietnamese name on the title and a side agreement to protect the foreigner, the deal does not work. The right move is to either buy within the rules, find a different unit that fits the rules, or walk away.