Contents
1. Can foreign investors do real estate business in Vietnam?
Pursuant to the provisions of Section B Appendix I of Decree 31/2021/ND-CP stipulating the list of industries and trades with conditional market access for foreign investors, real estate business lines fall into this list. Therefore, foreign investors must meet specific conditions announced to be able to access the market.
2. Conditions for foreign investors to do real estate business in Vietnam.
In Clause 10, Article 3 of the Law on Investment 2020 stipulates:
“Market access conditions for foreign investors are conditions that foreign investors must meet to invest in industries and trades on the list of industries and trades restricted from market access for foreign investors.
Except for industries and trades on this List, foreign investors have the same market access as domestic investors.”
Specifically, according to Clause 3, Article 9 of the Law on Investment 2020, market access conditions for foreign investors include:
– Conditions on the percentage of ownership of charter capital of foreign investors in economic organizations;
– Conditions on the form of investment;
– Conditions on the scope of investment activities;
– Conditions on the capacity of investors as well as partners participating in investment activities;
3. Conditions of organizations and individuals doing real estate business
In Article 4 of Decree 02/2022/ND-CP stipulating the conditions of organizations and individuals doing real estate business specifically as follows:
- Organizations or individuals doing real estate business must meet the following conditions:
a) To establish an enterprise in accordance with the law on enterprises or cooperatives in accordance with the law on cooperatives, having real estate business lines (hereinafter collectively referred to as enterprises);
b) Information about the enterprise must be disclosed on the enterprise’s website, at the office of the Project Management Board (for real estate investment and business projects), at the real estate trading floor (in case of business through the real estate trading floor) information about the enterprise (including name, head office address, contact phone number, name of the legal representative), information on real estate put into business as prescribed in Clause 2, Article 6 of the Law on Real Estate Business, information on mortgage of houses, construction works, real estate projects put into business (if any), Information on the quantity and type of real estate products being traded, quantity, types of real estate products sold, transferred, leased and purchased and the quantity and types of remaining products that are continuing to do business.
For public information specified at this point that subsequently changes, it must be promptly updated immediately after the change;
c) Only trade in real estate that meets the conditions specified in Articles 9 and 55 of the Law on Real Estate Business.
- In case an investor is selected as an investor of a real estate project in accordance with law, such investor must have an equity capital of not less than 20% of the total investment capital for a project with a land use scale of less than 20 hectares, not less than 15% of the total investment capital for projects with a land use scale of 20 hectares or more. When conducting real estate business, the project investor must satisfy the conditions specified in Clause 1 of this Article.
The determination of equity specified in this Clause is based on the results of the most recent audited financial statements or the results of independent audit reports of the operating enterprise (made in the preceding year or year); In case it is a newly established enterprise, the equity capital shall be determined according to the actual charter capital contributed in accordance with the provisions of law.
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