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Foreign direct investment (FDI) enterprise means an organization whose members or shareholders are foreign investors, established and operating in accordance with Vietnam’s laws that carry out business investment activities. Foreign investor means an individual holding a foreign nationality or an organization established under foreign laws and carrying out business investment activities in Vietnam.
Base on the actual context of your Company, VIVA would like to send you the latest regulation regards all regulations related setting up FDI enterprise operating in real estate owned by foreigner as follow:
REAL ESTATE BUSINESS
Including 02 types of business:
AVAILABLE REAL ESTATE BUSINESS OR/ AND REAL ESTATE BUSINESS FORMED IN FUTURE
Charter Capital: minimum 20 billion. (could be shown by the balance confirmation from bank account of investor corresponding to company’s charter capital – 20 billion )
Scope of business:
- Rent house, building for rent house.
- For land leased by the State, investor may invest to build house for lease. invest for housing construction, building construction. not include houses for sell, rent, hire-purchase.
- Take over all or a part of real estate project from investor to construct house, build construction for sell, rent, hire-purchase.
- For land allocated by State, investor can invest to build house for sell, rent, hire-purchase purpose.
Limit of receiving payment:
- Foreign enterprise that sell real estate formed in the future only allowed to receive payment equivalent or less than 50% value of contract, it could be divide into installment but the first installment payment cannot be exceed 30% value of contract.
- Having right to negotiate about payment rate, in case there is no agreement about payment rate, only allowed to collect money from buyer which was not exceed 95% the value of contract when the buyer has not been granted Land-use right certificate, ownership house and other properties associated with land.
Location of business project implementation: Real estate investment project for business purpose must comply with planning, land-use planning, urban planning, rural construction planning and must follow with implementation plan which was approved by competent state agency. (depending on locality)
The origin of land:
FDI enterprise can be assigned land under 05 forms as following:
- Receiving the investment capital which is the value of land use right.
- Receiving the land use right through receiving capital contribution by land use right applied for joint venture company.
- Receiving land use right by being allocated land from Government to conduct housing construction project for sale or for sale and lease purpose.
- Receiving land use right by rent from Government.
- Receiving land use right according to conciliation result of real estate dispute approved by competent People’s Committee.
⇒ It is prohibited buying land from Vietnamese individual.
The condition to use available real estate for business purpose
- Land use right certificate.
- There is no subject to distraint, dispute, and the land use term is still unexpired.
The condition to use real estate formed in the future:
Step 1: Having the following documents:
- Land use right documents.
- Project documents, construction drawing designs approved by competent authorities, Construction permits.
- Acceptance certificate of completion the infrastructure corresponding with the schedule of project.
- In case this is the building, mixed-use building with housing purpose which formed in the future, it must have the Acceptance Certificate of building foundation completion.
Step 2: Notify the Provincial House Management Agency (construction department) in advance 15 days when selling, hire-purchasing house formed in the future.
Other issues related to housing business
FDI enterprise has the right to own house as following:
- Invest for housing construction project in Viet Nam
- Buy, hire-purchase, receive, inherit commercial house including apartment and individual house in housing construction project except for areas under management relating to national defense and security as prescribed in regulations of the Government.
- Ho Chi Minh City has not had the plan above → It is difficult to buy house.
Condition: Must have Investment Registration Certificate
Note:
- Purchasing house from Vietnamese household, individual is not allowed.
- Purchasing house from Vietnamese organization who is not the investor is not allowed.
- Receiving, inheriting house which is not in the housing construction project is not allowed.
REAL ESTATE SERVICE BUSINESS
There are 04 types:
- Real estate brokerage service.
- Real estate consulting service.
- Real estate management services.
- Real estate trading floor services.
Condition:
- Set up business as above, the charter capital is not required.
- For brokerage service business: at least 02 person have Brokerage Operations Professional Certificate.
- For trading floor services business.
- Set up business.
- At least 02 person have Brokerage Operations Professional Certificate.
- The Manager must has Brokerage Operations Professional Certificate.
- The real estate floor trading must has operation regulation, name, address and has stable operation for over 12 months. If there is any change, it must be informed The Construction Department and customers.
- The minimum area of real estate floor trading is 50m2 and it must set up technical equipment to meet operation requirements.
Investor must obey business regulations. In addition, the investor has to submit documents to Provincial House Management Agency as stipulated by Law
Failure in strictly following regulations might cause potential risks in the future. Please do not hesitate to share with our representative to have solution for each specific situation.
Readmore:
- Foreigner working in Vietnam: Work permit – Regulation and guidance
- Foreigner working in Vietnam: Full compliance procedures for foreigners
- Foreigner working in Vietnam: Visa entry Vietnam – What you need to know
- Foreigner working in Vietnam: Compulsory insurance – Whay you need to know
- Foreigner working in Vietnam: Temporary residence card – What you need to know
- Foreigner working in Vietnam: Permanent residence card – What you need to know
- Foreigner working in Vietnam: Procedure for consular legalization foreign document
- Foreigner working in Vietnam: Counsel and support required local compliance procedures
- Foreigner working in Vietnam: Legal representative of enterprise – Roles and responsibility
- Foreigner working in Vietnam: Private banking & Wealth management for foreigners in Vietnam.
- Foreigner working in Vietnam: Personal income tax – methods of declaration and payable amount
- Foreigner working in Vietnam: Acceptance of demand for foreign workers from local competent state agencies.
