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Scope of real estate trading for foreign-invested companies

30/01/2021

LEGAL GROUNDS

- Law on real estate trading 2014;

- Law on Housing 2014;

- Decree 99/2015 / ND-CP on guidelines for the Law on Housing.

1. Types of real estate Foreign-invested companies are allowed to do business

For real estate business activities in Vietnam, foreign-invested companies are only allowed to carry out in the following real estate types:

- Houses, construction works;

- Land allocated by the State;

- Land leased by the State;

- Real estate projects;

- Land leased in industrial zones, industrial clusters, export processing zones, hi-tech zones, economic zones;

- Off-plan property.

2. Forms of real estate business permitted and restricted in real estate business activities (if any) for foreign-invested companies

2.1. For houses, construction works

Business form:

- Foreign-invested companies are allowed to lease to sublease houses and construction works according to the provisions of Point a, Clause 1 and Point a, Clause 3, Article 11 of the 2014 Law on Real Estate Trading.

- Foreign-invested companies are allowed to buy, rent and buy houses, construction works for using as offices, production , business and service establishments according to their functions, construction works according to the provisions of Clause 2, Article 14 of the Law on real estate trading.

Limit:

- Foreign-invested companies are not allowed to buy houses and construction works for sale, lease or lease-purchase.

- For houses, foreign-invested companies are restricted in the number of houses that can be purchased, leased, purchased and owned according to Clause 2, Article 161 of the 2014 Law on Housing, and details in Clauses 3 and 4 Article 76 of Decree 99/2015 / ND-CP as follows:

“3. Foreign organizations and individuals may own no more than 30% of the total number of apartments in a condominium; In case an area with a population equivalent to a ward-level administrative unit has many apartment buildings for sale, lease or purchase, foreign organizations and individuals are only entitled to own no more than 30% of apartments. of each apartment building and not more than 30% of the total number of apartments of all these apartment buildings.

4. In case an area with a population equivalent to a ward-level administrative unit has an investment project to build commercial houses, including separate houses for sale, lease or purchase, foreign organization, individuals may own a number of separate houses according to the following provisions:

a) In case there is only one project with less than 2,500 seperate houses, foreign organizations and individuals are only entitled to own no more than 10% of the total number of houses in that project;

b) In case there is only one project with the number of separate houses equivalent to 2,500 houses, foreign organizations and individuals may own no more than 250 houses;

c) In case there are two or more projects and the total number of detached houses in these projects is less than or equal to 2,500 houses, the foreign organization or individual is only entitled to own no more than 10% of the number of houses of each project. ”

2.2. For Land allocated by the State

Business form:

Foreign-invested companies are allowed to invest in the construction of houses for sale, lease, or lease-purchase according to the provisions of Point b, Clause 2 and Point a, Clause 3, Article 11 of the 2014 Law on Real Estate Trading.

2.3. For Land leased by the State

Business form:

- Foreign-invested companies are allowed to invest in the construction of houses for lease according to the provisions of Point d, Clause 1 and Point a, Clause 3, Article 11 of the 2014 Law on Real Estate Trading;

- Foreign-invested companies are allowed to invest in the construction of houses, construction works other than houses for sale, lease, or lease-purchase under the provisions of Point d, Clause 1 and Point a. Clause 3 Article 11 of the 2014 Law on Real Estate Trading.

Limit:

In case of building house on leased land, if the house is built on a leased land, only the right to lease the house is entitled to lease the house only (Clause 1, Article 161 of the 2014 Law on Housing).

2.4. For Real Estate Projects

Business form:

Foreign-invested companies are allowed to transfer a part or the whole to build houses, works for sale, lease, or lease-purchase according to the provisions of Point h, Clause 1 and Point a, Clause 3, Article 11 of the Law on real estate trading 2014.

Limit:

In case the investor receiving the transfer of real estate project is a foreign-invested enterprise, after obtaining the decision to permit the transfer of the project by a competent state agency, the transfer investor shall do the procedure of returning land to the State; The competent state agency  decides on land allocation or land lease to investors within 30 days from the date of receipt of complete and valid dossiers (Clause 3, Article 51 of the 2014 Law on Real Estate Trading) .

2.5. For Land leased in industrial zones, industrial clusters, export processing zones, hi-tech zones, economic zones

Business form:

Foreign-invested companies are allowed to build houses and works for business purposes in accordance with the land use purposes according to the provisions of Point b, Clause 3, Article 11 of the 2014 Law on Real Estate Trading.

Limit:

Foreign-invested companies are only allowed to build houses and works for business purposes according to the right land use purposes.

2.6. For off -plan real estate

Business form:

Foreign-invested companies are allowed to sell, lease, or lease - purchase off-plan houses and constructions but must comply with relevant regulations for the above available real estate types according to clause 2 Article 54 of the Law on Real Estate Trading 2014.

Limit:

For the payment for the purchase, sale or lease-purchase off-plan real estate, in case the seller or the lessor-purchase is a foreign-invested company, the total amount must not exceed 50% of the contract value ( Clause 1 Article 57 of the Law on real estate trading 2014).

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CÔNG TY LUẬT TNHH KHOA TÍN

Địa chỉ Văn phòng Hà Nội: Số 28 - TT2, Khu đô thị HDMon, Đường Hàm Nghi, Quận Nam Từ Liêm, TP. Hà Nội

Địa chỉ Chi nhánh Hồ Chí Minh: OP 05.32 tòa nhà Orchard Parkview, số 130-132 Hồng Hà, Phường 9, Quận Phú Nhuận, TP. Hồ Chí Minh.