In the context of Vietnam joining many free trade agreements, and significant impact of the US-China trade war, the wave of relocation of production facilities from abroad, especially from Chinese investors to Vietnam becomes increasingly strong, expanding the industrial real estate market, office buildings accompanied with strong demand for building residential areas and services for workers across the country.
Foreign investment in Vietnam’s real estate market has exponentially grown over the recent years. Investors from China, Singapore, Korea,… show special interest in office buildings / apartment buildings in downtown areas, or big land in industrial zones or near seaports.
The law of Vietnam currently allows foreign investors to set up a 100% foreign-owned real estate company or purchase 100% of the shares or capital contribution in a local real estate company. However, the scope of business activities in this field as for foreign-owned companies is somewhat narrower than local ones.
According to the regulations of law, inclusive but not limited to the following:
– The Investment Law No. 67/2014/QH13 in 2014;
– The Enterprise Law No. 68/2014/QH13 in 2014;
– The Real Estate Business Law No. 66/2014/QH13 2014;
– Other relevant legal documents.
Here below are some conditions for establishing a foreign-owned real estate company in Vietnam:
Foreign investors (including organizations or individuals) doing real estate business must set up a company and there is no minimum capital requirement in real estate trading and some real estate services (including real estate brokerage, real estate trading floors, consultancy and management).
1. Business of real estate company in Vietnam
Foreign-owned enterprises may conduct real estate trading in the following forms:
• To rent houses, buildings for sublease;
• To build houses on the land which is leased by the State for lease; build houses or constructions other than houses on such land for sale, for lease, or for lease purchase;
• To acquire total or a part of real estate project from investors to construct buildings on it for sale, for lease, or for lease purchase;
• To build houses on land which is allocated by the State for sale, lease, or lease purchase;
• To construct buildings on land which is leased out or transferred in industrial parks, industrial complexes, export-processing zones, hi-tech zones, or economic zone for sale with the proper purpose of land use.
2. Real estate brokerage service
Foreign-owned companies are entitled to provide real estate brokerage services and must have at least 2 people who have a real estate brokerage certificate.
Real estate brokerage service operation:
• To look for partners who meet requirements given by clients for agreement negotiation and conclusion.
• To act as an authorized representative to perform work related to procedures for real estate sale, transfer, lease, and sublease or lease purchase.
• To provide information and support contracting parties in negotiation and conclusion of agreement on real estate sale, transfer, lease, sublease or lease purchase.
3. Real estate trading floor service
Foreign-owned companies are entitled to provide real estate trading floor services and must have at least 02 people who have a real estate brokerage certificate, one of whom must be the manager of a real estate trading floor.
Real estate trading floor operation:
• To conduct real estate sale, transfer, lease, sublease or lease purchase transactions.
• To organize real estate sale, transfer, lease, sublease or lease purchase; publicly provide or post information about real estate to potential clients; check documents on the real estate eligible for transactions; to act as a broker between contracting parties in negotiation and conclusion of agreement on real estate sale, transfer, lease, sublease, or lease purchase.
4. Real estate consultancy and management services
Foreign-owned companies are entitled to provide real estate consultancy and management services in accordance with the law.
5. Procedures for establishing a 100% foreign-owned real estate company
(1) Applying for an investment registration certificate;
(2) Applying for business registration certificate;
(3) Making the stamp of the company;
(4) Opening a company bank account;
(5) Paying license tax and completing initial tax and accounting procedures.
Completion time: about 20 – 30 working days.
For further information on our legal services, please feel free to contact us!