What are the most noticeable subjects that foreign-invested enterprises need to comprehend when operating in Vietnam?

What are the most noticeable subjects that foreign-invested enterprises need to comprehend when operating in Vietnam?

Due to its amazing potential for growth and high-profit opportunities, the real estate industry is one that draws the interest of many international investors. Nonetheless, this is on the list of conditional business lines for foreign investors, so they must satisfy all the requirements prescribed in Vietnam’s Law on Investment in order to be permitted to run the investment projects. In the following article, HTC Vietnam Law Firm will point out some important things when foreign investors decide to invest in this sector.

1. Types of real estate to be put on the market

Types of real estate to be put on the market in accordance with the Law on Real Estate Trading include:

- Existing buildings of organizations or individuals;

- Off-the-plan buildings of organizations or individuals;

- Buildings which are public properties to be put on the market permitted by competent agencies;

- Types of lands whose land-use rights are permitted to be transferred, leased, sublet as prescribed in law on land.

2. Notes for foreign investors when executing real estate trading investment projects:

- Complying with regulations of law on the scope of real estate trading conducted by foreign-invested enterprises;

- Foreign investors who want to conduct real estate trading projects in Vietnam must establish a foreign-invested business organization; capital contribution, purchase of shares or stakes to a Vietnamese business organization;

- Any real estate projects by foreign investors are entitled to conduct must be approved by Vietnam's competent agencies. Projects must also ensure to meet requirements in terms of quality, safety, orientation,...

- Real estate trading is on the list of conditional business lines. Currently, Law does not stipulate legal capital for enterprises carrying out this sector but investors need to note: In case an investor is selected as the investor of a real estate project according to law, such investor must have an equity of not less than 20% of the total investment capital for the project with a land use scale of less than 20 hectares, not less than 15% of the total investment capital, for the project with a land use scale of 20 hectares or more.

- Must conform to requirements and must have a business registration for each specific real estate trading service. For instance, in the case if an enterprise providing real estate brokerage services is allowed to conduct as prescribed in law, it will need to apply for all kinds of business licenses or provide sufficient practice certificates and must ensure that there are at least 2 people with real estate broker license.

- Since Vietnam's Enterprise Law does not limit the specific investment capital for foreign investors in the real estate sector, it is possible for them to invest in a real estate enterprise in Vietnam with a fixed rate of investment capital ratio from 1% to 100%.

Legal consulting services on the establishment of a foreign-invested real estate business

The HTC Vietnam Law Firm would like to provide the following consultation on matters relating to the registration of establishment of foreign-invested enterprises in the field of real estate business as follows:

- Consulting on issues related to the selection of the type of enterprise, and procedures for business registration;

- Consulting on issues related to business registration procedures in the field of real estate business;

- Guiding customers to draft and complete documents related to business registration procedures;

- Drafting dossiers of enterprise registration, for conditional business lines for foreign investors;

- Representing the Client to work with the competent agencies.

Service Quality Commitment

The following are HTC Vietnam Law Firm’s Principles of Operation: Conscientious - Effective - Reliable. HTC Vietnam Law Firm assures service quality, specifically as follows:

- Ensure that the work is carried out according to the agreed schedule, in accordance with the law, and in accordance with the code of ethics and Codes of Conduct of Vietnamese lawyers.

- Give priority to customers' interests, and make every effort to provide customers with the best quality of service.

- Respect the confidentiality of information that clients provided and information pertaining to the clients.

We are looking forward to a long-term cooperation.

Best Regards!

(Writer: Trịnh Minh Phương/200. 28/04/2022

Translator: Nguyễn Thị Liên)