What are the eligibility requirements to engage in real estate business in Vietnam under the Law on Real Estate 2023?
What are the eligibility requirements to engage in real estate business in Vietnam under the Law on Real Estate 2023?
Pursuant to Article 9 of the Law on Real Estate 2023, eligibility requirements to engage in real estate business are as follows:
Eligibility requirements to engage in 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 (hereinafter referred to as “real estate enterprise”), except the cases in clauses 3 and 4 of this Article.
An organization or individual providing real estate services shall comply with the provisions of clause 5 of this Article.
2. A real estate enterprise shall be required to meet the following requirements:
a) 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;
b) It must maintain safe ratios of outstanding credit balance and outstanding bonds to the owner's equity;
c) 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.
3. An individual engaging in a small-scale real estate business shall not be required to establish a real estate enterprise but must declare and pay taxes in accordance with regulations of law.
4. 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 shall not be subject to the provisions of this Law but must declare and pay taxes in accordance with regulations of law. The organization or individual that sells or offers lease purchase of housing, building or its floor area must also follow certification or notarization procedures as prescribed in clause 5 Article 44 of this Law.
5. 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 this Law.
6. The Government shall elaborate points b and c clause 2 of this Article; provide guidelines for determination of small-scale real estate business as prescribed in clauses 3 and 4 of this Article.
Thus, any organization or individual that wishes to engage in real estate business must establish an enterprise, or cooperative or cooperative union, and at the same time, a real estate enterprise shall also 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.
What are the eligibility requirements to engage in real estate business in Vietnam under the Law on Real Estate 2023? (Image from the Internet)
What are the rules of real estate business in Vietnam under the new Law?
Pursuant to Article 4 of the Law on Real Estate 2023, it is stipulated as follows:
Real estate business rules
1. Openness and transparency; parties to a contract shall have the freedom to negotiate on the basis of respect for their legitimate rights and interests under the contract and compliance with regulations of law.
2. Real estate or real estate project to be put on the market must meet relevant conditions set out in this Law.
3. Real estate to be put on the market must be located outside protected areas which are determined in accordance with regulations of law on national defense and security.
Thus, real estate business under the new law is regulated as above.
Vietnam: When does the Law on Real Estate 2023 come into force?
Pursuant to the provisions of Article 82 of the Law on Real Estate 2023 clearly states:
Effect
1. This Law comes into force from January 01, 2025.
2. The Law on Real Estate Business No. 66/2014/QH13, as amended by the Law No. 61/2020/QH14, (hereinafter referred to as “Law No. 66/2014/QH13”) ceases to have effect from the date of entry into force of this Law, except the provisions of clauses 2, 3, 5, 6, 7, 9, 12 and 13 Article 83 of this Law.
Thus, the Law on Real Estate 2023 comes into force from January 1, 2025.
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