“2014 Law on Real Estate Business (2014 LOREB”) coming in force from 1st July 2015, provides with new legal points that real estate enterprises, local and foreign investors should be noted.“
Dear Valued Clients,
2014 Law on Real Estate Business (2014 LOREB”) coming in force from 1st July 2015, provides with new legal points that real estate enterprises, local and foreign investors should be noted.
Legal capital of minimum VND 20 billion
Under 2014 LOREB, the legal capital of real estate enterprise must not be less than VND 20 billion while the current provision on the same is VND 6 billion. Unqualified real estate enterprise is required to increase its chapter capital within 01 year from the effective date of 2014 LOREB (i.e 01st July 2015). Therefore, the real estate enterprise with the chapter capital of less than VND 20 billion should take necessary actions to increase its capital for purpose of legal compliance.
Notable provisions in term of real estate business contracts
2014 LOREB lists and provides with the main contents, rights and obligations of parties in the main kinds of real estate contracts, including house/building sale and purchase contract, house/building lease contract, house/building lease-purchase contract, lease/sub-lease land use right contract, and contract of whole or partly real estate project transfer.
Due to new provisions applicable to the above mentioned contracts, with more favor to the buyers and investors, the real estate enterprise should review and revise the contracts for the purpose of legal compliance of 2014 LOREB and minimization of potential risks.
Separation of Investment Registration Certificate and Enterprise Registration Certificate
Under 2014 Law on Investment (“2014 LOI”), a new foreign investor is required to register its investment project(s) for issuing an Investment Registration Certificate by Vietnamese authority prior to submission of dossier to licensing authority for the Enterprise Registration Certificate under 2014 Law on Enterprise (“2014 LOE”). Therefore, the provision of current Law on Investment: “The investment certificate shall concurrently be the business registration certificate.” will be abolished from the effective date of 2014 LOI and 2014 LOE (i.e 1 July 2015).
It is noted that the current foreign invested enterprise granted with Investment Certificate prior to 01th July 2015 is entitle to continuously implement their investment certificate.
We hereby would like to keep you informed with the latest news for your reference and action. Should you have any question regarding the above, please do not hesitate to contact us.
PLF Law Firm