In a family business, ownership, economic benefit and decision-making authority may be concentrated in the founders. A holding company can help organise succession, but these three aspects still need separate rules. Creating another company alone does not resolve how ownership, returns and control will pass to the next generation.
Three layers, three different questions
| Layer | The question | Typical instruments |
|---|---|---|
| Ownership | Who legally owns the shares or capital interests, and what happens to them on death, divorce or exit? | Holding company charter, share classes, pre-emption and transfer restrictions, marital property agreements |
| Benefit | Who receives value, when, and on what conditions – including family members who do not work in the business? | Dividend policy, family fund, distribution rules linked to performance and reinvestment needs |
| Control | Who appoints management, approves major decisions and settles disputes? | Members' council or board composition, reserved matters, voting thresholds, family constitution and family council |
A succession plan may allocate ownership equally among children without specifying how profits will be distributed or decisions made. Equal ownership can lead to deadlock if voting and dispute-resolution rules are unclear. Unclear distribution rules can also create disagreement with family members who do not work in the business.
Rules relevant to succession in 2026
- Personal income tax. Under the Personal Income Tax Law No. 109/2025/QH15, dividends received by individuals remain taxed at 5%. For a resident individual receiving inheritances or gifts of shares or capital interests, tax is 10% on the value above VND 20 million per receipt. The close-family exemption for inherited or gifted real estate does not extend to shares or capital interests. The tax treatment of a transfer from parents to children therefore depends on its form and value; gifts, inheritances and sales must be assessed separately.
- Beneficial ownership. Law No. 76/2025/QH15 amending the Law on Enterprises introduces the obligation to collect, keep and provide information on beneficial owners. Nominee arrangements inside the family – shares held "for" a sibling or a child – are harder to keep informal and should be either documented or unwound.
- Corporate income tax on dividends. Dividends received by a Vietnamese holding company from a domestic investee may be exempt from CIT where the statutory conditions are met (CIT Law No. 67/2025/QH15). The holding layer can then pool and reallocate profits without an extra tax layer at company level; dividend distributions to individuals remain subject to 5% PIT.
An illustrative scenario
A founder holds most of the capital of a manufacturing company; the spouse holds the rest. Two of three adult children work in the business, one does not. The founder lends the company money from time to time, and a factory site is registered in the founder's own name. (Illustrative facts.)
| Layer | Without design | With design |
|---|---|---|
| Ownership | In this scenario, assume the succession plan allocates equal stakes in the operating company to the three children. The plan remains subject to matrimonial property and compulsory-heir rules. | Capital is held through a family holding; heirs become members of the holding, under transfer and pre-emption rules agreed in advance. |
| Benefit | The child who does not work in the business depends on distributions, but the family has not agreed a dividend policy. | A written policy sets rules for distributing dividends and retaining profits for reinvestment, separately from management appointments. |
| Control | Equal stakes and unclear approval rules can create conflicting expectations or decision-making deadlock. | Reserved matters, voting thresholds and a deadlock procedure in the charter; management appointed on agreed criteria. |
| Unresolved matters | Founder loans and the privately held factory site sit outside any structure. | Loans documented and tested against the related-party rules; the site's title resolved before transfers begin. |
Design sequence
- Map the current position – registered owners, informal nominee holdings, loans between family members and the company, assets used privately but owned by the company.
- Agree family principles first – who may own, who may work in the business, how non-working members benefit. Agree these principles within the family, then check how they can be implemented under the law.
- Choose the holding vehicle – a multi-member LLC or a joint stock company, depending on the number of members, the need for share classes and the transfer restrictions required.
- Sequence the transfers – capital contribution, share transfer or inheritance plan, each tested for PIT, documentation and the related-party rules of Decree 255/2026/ND-CP where loans or capital movements are involved.
- Write control into the charter – reserved matters, voting thresholds and deadlock resolution, consistent with the family constitution.
- Review every two to three years – marriages, births, exits and changes in law shift the balance between the three layers.
A holding company supports succession only when its ownership, distribution and decision-making rules are clear and agreed in advance.
Relevant capability: Family Ownership & Succession Advisory (FOSA)
General information as at October 2026. It is not legal, tax or accounting advice for any specific situation; check the law in force and your own facts before acting. The scenario is illustrative.
