The real estate line in Vietnam is increasingly attracting investors to contribute capital to implementing business projects. According to statistics of the Foreign Investment Agency, the real estate business ranked third in attracting FDI. However, in the WTO Commitment Schedule, Vietnam has not made any commitments on real estate business for foreign investors. Therefore, there are still many foreign investors considering the possibility of implementing real estate business projects in Vietnam, whether the Vietnamese government will allow real estate projects to be implemented, etc.

In order to understand this issue fully and clearly to facilitate the implementation process and Vietnamese law compliance. Bizlawyer will advise on specific forms and conditions for implementing real estate business projects in Vietnam.

The 2014 Investment Law stipulates that foreign investors are “Individuals with foreign nationality, Organization established under foreign laws that carry out business and investment activities in Vietnam“.

Clause 1, Article 3 of the Law on Real Estate Business 2014 defines real estate business as “the investment of capital to carry out activities of construction, purchase, receipt of transfer for sale or transfer; lease, sublease, lease purchase real estate; real estate brokerage service; real estate trading floor services; real estate counseling or real estate management services for profit-making purposes”. Therefore, the real estate project business will include real estate business and real estate service business. At the same time, the Law on real estate business 2014 has very clear regulations on the scope and conditions of the real estate business of foreign investors in Vietnam. Foreign investors carrying out real estate business projects in Vietnam must comply with investment laws, real estate business laws, housing laws, and other relevant laws

You can refer to Popular Investment Forms in Vietnam in which foreign investors are interested!

Types of real estate put into business:

Types of real estate put into business under the Law on Real Estate Business include:

1. Available house and construction of organization and individual;
2. House, construction formed in the future of organization and individual;
3. House and construction which is public property and put into business under permitted by the competent State agency;

4. Types of land which are permitted to transfer, lease, sublease land use rights in accordance with the law on land are permitted to transfer in land use rights

Scope of real estate business of foreign-invested enterprises:

A foreign investor wishing to implement real estate business projects in Vietnam must establish foreign-invested economic organization; contributing capital, buying share or capital contribution of Vietnamese economic organizations.

Accordingly, the scope of the real estate business of foreign-invested enterprises is more limited than that of other entities. In Clause 3, Article 11 of the Law on Real Estate Business 2014, the form of real estate business of foreign-invested enterprises includes

• Renting house or construction for sublease;
• Investing in building houses for lease; or building other construction (not house) for sale, for rent, or for lease purchase (For the land leased by the State)
• Receiving transfer of all or a part of real estate project of the investor to build houses, construction works for sale, lease, lease purchase;
• Investing in building houses for sale, lease – purchase (for the land allocated by the State)
• Investing in constructing houses and other construction to transfer following the purpose of land use (For land leased in industrial parks, industrial complexes, export processing zones, hi-tech parks or economic zones)

Conditions of organization, individual doing real estate business:

1. Organization or Individual doing real estate business line must be established company in accordance with the law on enterprises, except for the organization or individual that sell, transfer, lease, lease-purchase real estate on a small scale, infrequently.
2. Organization, individual must have legal capital of not less than VND 20 billion

Requirements for real estate investment projects for business:

Article 12 Law on Real Estate Business 2014 stipulates that real estate investment projects must meet the following requirements:

• Subject to land use plannings, urban plannings, and rural construction plannings and approved by competent state agencies;
• The procedures for investment in real estate projects for business are subject to the law on investment, land, construction, urban, houses and other relevant provisions of law
• Be constructed on schedule, quality assurance in accordance with the law on construction

Scope of real estate service business:

Foreign organization and individual are entitled to provide real estate services, including:

• Real estate brokerage service;
• Real estate trading floor service; Real estate counseling services, real estate management service

Conditions for real estate service business:

• Entity performing real estate service business must establish a company;
• Such entity must meet the conditions of human resource, technical facilities (specified in the Real Estate Business Law 2014.)

Note: When conducting real estate business in Vietnam, foreign investors need to perform the procedures for the issuance of an investment registration certificate and an enterprise registration certificate in accordance with the law of Vietnam.

Bizlawyer is providing legal services relating to real estate business. Should Clients have any questions or are interested in our legal service, please contact us through our email: Info@bizlawyer.vn or Hotline Call: +8486.888.1900 for timely advice and support.