Can foreign-invested enterprises engage in real estate trading under Vietnamese law?
Can foreign-invested enterprises engage in real estate trading under Vietnamese law?
Pursuant to Article 8 of the 2014 Law on Real Estate Trading in Vietnam stipulating prohibited acts as follows:
Prohibited acts
1. Real estate trading does not satisfy requirements prescribed in this Law.
2. The real estate projects are not complied with planning approved by competent agencies.
3. Failure to disclose, or untruthfully disclose about the real estate.
4. Fraud and deception in real estate trading.
5. Illegal mobilization of funds; illegal use of mobilized capital of organizations or individuals and option fee of off-the-plan real estate buyers or lessees for improper purposes.
6. Failure to fulfill or completely fulfill financial obligations to the State.
7. Grant and use of real estate broker license in contravention of the provisions of this Law.
8. Collection of charges, fees and money amounts related to real estate trading in contravention of the provisions of law.
There is no regulation prohibiting foreign-invested enterprises from engaging in real estate trading in Vietnam.
Thus, foreign-invested enterprises are not prohibited from engaging in real estate trading in Vietnam.
Can foreign-invested enterprises engage in real estate trading under Vietnamese law?
In what forms can foreign-invested enterprises engage in real estate trading?
Pursuant to Article 11 of the 2014 Law on Real Estate Trading in Vietnam, the scope of real estate trading is as follows:
Scope of real estate trading conducted by Vietnamese organizations, individuals, overseas Vietnamese or foreign-invested enterprises
1. Any Vietnamese organizations and individuals may conduct real estate trading under following forms:
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b) Rent buildings for sublease;
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d) Build houses on the land which is leased by the State for lease; build houses or constructions other than houses on such land for sale, for lease, or for lease purchase;
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h) Receive total or a part of real estate project from investors to build buildings on it for sale, for lease, or for lease purchase;
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2. Overseas Vietnamese may conduct real estate trading in the following forms:
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b) Build houses on land which is allocated by the State for sale, for lease, or for lease purchase;
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3. Foreign-invested enterprises may conduct real estate trading in the following forms:
a) Forms prescribed in Point b, d, h Clause 1 and Point b Clause 2 of this Article;
b) Build buildings on land which is leased out or transferred in industrial parks, industrial complexes, export-processing zones, hi-tech zones, or economic zones for trading for the proper land use.
Thus, foreign-invested enterprises are only allowed to conduct real estate trading under following forms:
+ Rent buildings for sublease;
+ Build houses on the land which is leased by the State for lease; build houses or constructions other than houses on such land for sale, for lease, or for lease purchase;
+ Receive total or a part of real estate project from investors to build buildings on it for sale, for lease, or for lease purchase;
+ Build houses on land which is allocated by the State for sale, for lease, or for lease purchase;
+ Build buildings on land which is leased out or transferred in industrial parks, industrial complexes, export-processing zones, hi-tech zones, or economic zones for trading for the proper land use.
What is the land use term in case a foreign-invested enterprise leases land for the purpose of implementing an investment project?
Pursuant to Article 127 of the 2013 Land Law of Vietnam stipulating the land use term as follows:
Land use term upon change of land use purpose
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2. For organizations, overseas Vietnamese or foreign-invested enterprises implementing investment projects outside industrial parks, industrial clusters, export processing zones or hi- tech zones, when the land use purpose is changed, the land use term shall be determined on the basis of the investment project as prescribed in Clause 3, Article 126 of this Law.
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Referring to Article 126 of the 2013 Land Law of Vietnam stipulating land used for limited term as follows:
Land used for limited term
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3. The term for land allocation or land lease to organizations for the purpose of agriculture, forestry, aquaculture or salt production; to organizations, households or individuals for the purpose of trading and services or for non-agricultural production establishments; to organizations for implementing investment projects; to overseas Vietnamese and foreign-invested enterprises for implementing investment projects in Vietnam, shall be considered and decided on the basis of the investment projects or applications for land allocation or land lease, but must not exceed 50 years.
For large investment projects with slow recovery of capital, projects in areas with difficult socio-economic conditions or with especially difficult socio-economic conditions which require a longer term, the term of land allocation or land lease must not exceed 70 years.
For projects on construction of houses for sale or for a combination of sale and rent or for lease- purchase, the land use term shall be determined in accordance with the duration of the project. Those who buy houses associated with land use rights may use land for a long and stable term.
Thus, foreign-invested enterprises can lease land in Vietnam for a term of 50 years, 70 years or determined according to the term of the project, depending on the nature and scale of the project.
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