Currently, the investment and business activities of foreigners entering Vietnam increase. However, it is not allowed that foreigners can make investments in any field. So, will foreigners be allowed to make investment into real estate business which brings high profits.
Article 3 of Decree 76/2015 / ND-CP detailing the implementation of a number of articles of the Law on Real Estate Business specifies that
Organizations and individuals dealing in real estate must establish enterprises in accordance with the law on enterprises or cooperatives in accordance with the law on cooperatives (hereinafter referred collectively to as enterprises) and must have legal capital must not be lower than VND 20 billion, except for the following cases:
a) Organizations, households and individuals that sell, transfer, lease or lease-purchase small-sized and irregular real estate specified in Article 5 of this Decree;
b) Organizations and individuals dealing in real estate services are stipulated in Chapter IV of the Law on Real Estate Business.
Thus, the law does not stipulate that foreigners are allowed to trade in real estate in Vietnam. In order to operate in this field, foreigners must first meet the general condition of establishing a business in Vietnam with a minimum legal capital of VND 20 billion. The establishment of a foreigner’s business in Vietnam must comply with the investment law. Under the provisions of investment law, foreign investors can establish new economic organizations, make capital contributions, buy shares, and contribute capital to economic organizations operating in the business sector of real estate.
The law does not stipulate prohibiting foreign organizations and individuals from operating in real estate business, however, regulating the scope of their activities. According to Article 11 of the Law on Real Estate Business 2014, the scope of operation of foreign invested enterprises shall be as follows:
- Renting houses and construction works for sublease;
- For land leased by the State, investors may build houses for lease; investment in construction of houses and construction works other than houses for sale, lease or lease purchase;
- Receival of the transfer of all or part of the investor’s real estate project to build houses or construction works for sale, lease or lease-purchase;
- For land allocated by the State, investors may build houses for sale, lease or lease-purchase;
- For leased land in industrial parks, industrial complexes, export processing zones, hi-tech parks and economic zones, to invest into the construction of houses and construction works for business purposes according to the land use purposes.
Thus, foreign individuals and organizations can fully operate in real estate business but only in certain areas permitted by the real estate business law. And business investment must comply with specialized laws.
In order to be more clear about the implementation of real estate investment in Vietnam by foreign individuals and organizations, customers can contact us to receive the most specific advice.
Hnlaw & Partners Law Firm
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