What are the requirements for transferee of the entire or partial real estate project in Vietnam?
What are the requirements for transferee of the entire or partial real estate project in Vietnam?
Pursuant to the provisions of Clause 2, Article 40 of the Law on Real Estate 2023, the transferee of the entire or partial real estate project must satisfy the following requirements:
General requirements for real estate business
(1) Any organization or individual that wishes to engage in real estate business must establish an enterprise, or cooperative or cooperative union, in accordance with the Law on Enterprises or the Law on Cooperatives respectively, whose business lines include real estate business
Except for the cases where a real estate enterprise establishment is not required:
+ An individual engaging in a small-scale real estate business
+ An organization or individual that sells housing, building or its floor area for non-commercial purposes or conducts sale, lease or lease purchase of housing, building or its floor area of an ultra-small scale
Any organization or individual that wishes to provide real estate services must establish an enterprise, or cooperative or cooperative union, in accordance with the Law on Enterprises or the Law on Cooperatives respectively (hereinafter referred to as “real estate service enterprise”), and meet relevant requirements laid down in Law on Real Estate 2023
(2) A real estate enterprise shall be required to meet the following requirements:
- It is not subject to any court’s judgment or decision, or a competent authority’s decision, on prohibition or suspension of real estate business;
- It must maintain safe ratios of outstanding credit balance and outstanding bonds to the owner's equity;
- The real estate enterprise approving a real estate project must ensure that its owner's equity shall not be lower than 20% of total investment of that project, if the area of land used is less than 20 ha, or 15% of total investment of that project, if the area of land used is 20 ha or higher, and that it is capable of raising capital for implementing that project. If a real estate enterprise implements several real estate projects at the same time, its owner's equity must be sufficient to fund all of such projects at the abovementioned percentage.
Special requirements for transferee of the entire or partial real estate project:
- Covenant to continue construction and operation of the received partial or entire project according to approved contents of the project
- If there are any changes in such approved contents of the project, the provisions of clause 3 Article 39 of Law on Real Estate 2023 shall apply.
What are the requirements for transferee of the entire or partial real estate project in Vietnam? (Image from the Internet)
What are the rules for transferring entire or partial real estate project in Vietnam?
Pursuant to the provisions of Article 39 of the Law on Real Estate 2023, the rules for transferring entire or partial real estate project are as follows:
- A real estate project investor is entitled to transfer a part or whole of the project to another investor to continue investment in, construction and operation of the project for the period approved by a competent authority.
- The transfer of entire or partial real estate project does not cause any change to the planning or project objectives; must ensure legitimate rights and interests of relevant parties.
- Upon completion of transfer of entire or partial real estate project, the transferee shall inherit all rights and obligations of the project investor transferring the project and become the investor of the received project or part of project. The transferee shall not be required to re-prepare the project dossier, construction planning and re-apply for a building permit, if there are no changes in the contents of the project. If there are changes in the contents of the project, the transferee shall make corresponding adjustments in accordance with regulations of law.
- Transfer of entire or partial real estate project must meet the conditions set out in Article 40 of the Law on Real Estate 2023 and be bound by provisions on forms, purposes and duration of land use, and land registration set out in the Land Law.
What is the State policies for real estate business in Vietnam?
Pursuant to the provisions of Article 7 the Law on Real Estate 2023, there are State policies for real estate business as follows:
- The State encourages organizations and individuals of all economic sectors to invest and engage in real estate business in conformity with the national and local socio-economic development objectives set out in each period.
- The State encourages and provides organizations and individuals with incentive policies for investment in social housing and real estate projects given investment incentives.
- The State shall invest in, and encourage organizations and individuals to make investment in, technical infrastructures outside the project perimeter; assist in construction of technical infrastructures within the perimeters of real estate projects given investment incentives.
- The State shall invest in, and encourage organizations and individuals to make investment in, urban public utility works and social infrastructure works within the scope of real estate projects.
- The State shall adopt policies for regulating the real estate market with an aim to ensuring its healthy, safe and sustainable growth.
- The State shall adopt policies for facilitating non-cash payment for real estate transactions.
- The State encourages the conduct of sale and purchase, transfer, lease, sublease and lease purchase of housing, buildings and LURs through the real estate trading floor.
Law on Real Estate 2023 comes into force from January 1, 2025.
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