“From January 2019, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership referred to as the CPTPP Agreement takes effect for Vietnam. This agreement opens up opportunities for Vietnam to strengthen mutually beneficial links among member economies and promote trade, investment and economic growth in the Asia-Pacific region.”
In fact, foreign capital registered in real estate business in Vietnam always accounts for a high proportion of the total FDI capital in all economic sectors. Specifically, in 2019, it reached 3.88 billion USD, accounting for 10.2%, ranked second place. Until May 2020, the accumulation of FDI capital in Real estate business activities had reached 58.32 billion USD, accounting for 15.49% of total FDI, second only to the processing and manufacturing industry.
In addition, the new provisions of the new Law on Investment 2020 and the draft of the decree on guiding the new Law on Investment contain some major changes in the conditions for conducting real estate business activities of enterprises in general, and of foreign-invested enterprises in specific. This shows that the path of foreign investors entering the real estate market in Vietnam has been more open than before.
According to the Law on Real Estate Business 2014
The condition for a business to conduct real estate business was to establish a business and have a legal capital of more than 20 billion VND, but now the legal capital issue has been removed by the Investment Law 2020.
For activities belonging to the “business of real estate services” including real estate brokerage services, real estate transaction floors, real estate consulting, real estate management, it is considered as conditional business activities, in which:
(i) Must have at least 02 people with a real estate brokerage practice certificate;
(ii) A real estate trading floor operator must have a real estate brokerage practice certificate;
(iii) A real estate trading floor must have a stable operation regulation, name and address for more than 12 months;
(iv) Real estate trading floor must have a minimum area of 50m2 and technical equipment to meet operational requirements;
For foreign investors, real estate business is an industry that has not been committed in Vietnam’s WTO commitments. But please note that:
Notes for current regulations
For real estate projects which were approved or granted an investment registration certificate in accordance with the Law on Investment, the authority and procedures for transfer of all or a portion of the project must comply with regulations of the Law on Investment.
For real estate projects other than those mentioned above, the competence to permit the transfer of all or a portion of real estate projects is as follows:
The legal information that we provided above will hopefully help foreign investors and foreign-invested enterprises to understand the current regulations on real estate business to build appropriate business plan and ensure the legal compliance.