Establishment of foreign invested real estate company is a common activity. In recent times, the real estate market has gradually become more vibrant and may return to its golden age. In fact, it is not difficult to encounter real estate buying, selling or transferring activities in the market. To better understand, please follow the following content

1. Regulations on real estate business activities

We can understand real estate business activities as individuals, organizations or enterprises investing capital to carry out activities affecting real estate (land, houses, assets or other construction works attached to land) such as: construction, purchase, sale, receipt or transfer; leasing, sub-leasing, real estate; or brokerage, consulting, management services or activities on the real estate trading floor for the purpose of making a profit.

According to current law, individuals, organizations or enterprises conducting real estate business activities must comply with certain specific principles, such as:

– Equality before the law; the parties freely agree through contracts based on respect for the rights and legitimate interests of the parties, not violating the provisions of law.

– Meeting all conditions according to the provisions of the Law on Real Estate Business on real estate put into business.

– Must be honest, public and transparent in the process of real estate business activities.

– For areas considered outside the scope of national defense and security protection of the State according to the planning and land use plan approved by competent authorities, individuals and organizations have the right to conduct real estate business activities.

In addition to complying with the principles, real estate business entities must not violate the prohibitions specifically stipulated in the Law on Real Estate Business, such as:

• Do not trade in real estate that does not meet the legal conditions
• Invest in real estate projects that are not in accordance with the planning or land use plan approved by competent state agencies.
• For real estate information: not disclosing, not disclosing fully or not being truthful about information.
• Carrying out fraudulent and deceptive activities in real estate business.
• For financial obligations to the State: not performing or not performing fully the obligations
• Collecting fees, charges or other amounts related to real estate business contrary to the provisions of law…..

2. Procedures for establishment of foreign invested real estate company

Step 1: Apply for an investment registration certificate for the investment project

If the investment policy approval decision is not required, the investor shall apply for an investment registration certificate at the competent investment registration agency.

Accordingly, the investor shall prepare and submit 01 set of documents to the competent authority for settlement:

• Department of Planning and Investment
• Management Board of Industrial Parks

Place of submission: in the province/city where the Investor implements the investment project.

Processing time: Within 15 working days from the date of receiving the complete dossier, the competent State agency deciding on the investment registration shall consider and issue a Certificate to the investor. In case the investment registration agency refuses to approve the investment, it must prepare a document stating the reasons for refusal.

Step 2: Carry out the procedure to apply for a Certificate of Business Registration

Prepare documents including:

• Application form for business registration according to regulations; Company Charter; For LLCs with two or more members, a list of members is required, and for Joint Stock Companies, a list of founding shareholders must be submitted.
• Documents proving the legal status of individuals and organizations contributing capital to establish the company (Citizen identification card/passport/personal identification card if individual; Business registration certificate/establishment decision or equivalent document for organizations; ID card, citizen identification card or passport with authorization letter for the capital manager in Vietnam in case of authorizing a third party to represent the procedure.
• Copy of the previously issued Investment Certificate.

Processing time: Within 03 – 07 working days from the date of receipt of complete documents. In case of refusal, the requester must be responded to in writing and clearly stated the reason.

3. Conditions for foreign-invested enterprises to conduct real estate business in Vietnam

Currently, our Party and State have been implementing an open-door integration mechanism with countries and regions around the world, so there have been many positive impacts that have affected the development of the country’s socio-economic situation. Among them, the appearance and operation of foreign-invested enterprises in our country today. However, with distinct characteristics compared to domestic enterprises, our country’s law has issued a number of specific regulations for groups of subjects in carrying out business and investment activities in many fields.

According to the provisions on prohibited acts in real estate business activities in Article 8 of the Law on Real Estate Business 2014, there are no provisions prohibiting foreign-invested enterprises from participating in real estate business activities in our country. Therefore, this entity is allowed to do real estate business when meeting the conditions prescribed by current law.

To be able to do real estate business in Vietnam, foreign-invested enterprises need to meet the prescribed conditions, specifically as follows:

• Conditions on establishing an enterprise (Article 75 of the Investment Law 2020): Accordingly, establishing an enterprise or cooperative is mandatory for foreign investors when carrying out investment activities in this real estate business on a large scale and regularly.
• Conditions related to the scope of real estate business: Pursuant to Clause 3, Article 11 of the Law on Real Estate Business:
  • Renting houses or other construction works for the purpose of subleasing;
  • Investing in the construction of houses for rent; constructing houses and works that are not houses for sale, for rent or for hire-purchase on land leased by the State.
  • For real estate projects of investors building houses and construction works for sale, lease, or hire purchase: permission to receive the transfer of the entire or part of the project.
  • Investing in the construction of works that are houses for sale, lease, or hire purchase on land allocated by the State.
  • Investing in the construction of houses and construction works for business purposes in accordance with the land use purpose for leased land, which are types of land such as: industrial park land, industrial clusters, high-tech zones, economic zones, export processing zones, etc.

4. Policies on real estate investment and business

To encourage the development of real estate business activities, our Party and State have issued a number of policies, such as:

• Encouraging organizations and individuals of all economic sectors to carry out real estate investment and business activities in a manner consistent with the socio-economic development goals of the country in each period and in each specific locality.
• The State encourages relevant individuals and organizations and has policies on tax exemption and reduction and land use fees, land rent, in addition to credit incentives for individuals and organizations investing in the construction of social housing projects and other investment incentive projects.
• Investing in the construction of technical infrastructure works outside the project fence as well as encouraging organizations and individuals to invest; For technical infrastructure works within the fence of projects with investment incentives, investment and construction support will be provided.
• The State invests and encourages investment in urban public service projects and social infrastructure works within the scope of real estate investment projects.
• When fluctuations occur and to ensure the interests of investors and customers, the State will issue mechanisms and policies to stabilize the real estate market.

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