Small-scale real estate businesses are no longer required to establish a company from January 1, 2025 in Vietnam

What types of real estate and real estate projects in Vietnam are allowed to be traded?

According to Article 5 of the Law on Real Estate Business in 2023 (effective from January 1, 2025), the types of real estate and real estate projects that are allowed to be traded include:

1. Existing housing and housing to be built in the future.

2. Existing buildings and buildings to be built in the future, including buildings with functions for educational, medical, sports, cultural, office, commercial, service, tourism, accommodation, industrial purposes, and buildings with mixed functions.

3. Floor area in a building under the provisions of Clause 2 of this Article.

4. Land use rights that have technical infrastructure in a real estate project.

5. Real estate projects.

Small-scale real estate businesses are no longer required to establish a company from January 1, 2025 in Vietnam - Source: Internet

Small-scale real estate businesses are no longer required to establish a company from January 1, 2025 in Vietnam

Clause 3 Article 9 of the Law on Real Estate Business in 2023 (effective from January 1, 2025) stipulates the conditions for organizations and individuals when doing real estate business as follows:

Conditions for organizations and individuals when doing real estate business

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3. Individuals doing small-scale real estate business do not have to establish a real estate business enterprise but must declare and pay taxes in accordance with the law.

4. Organizations and individuals selling houses, buildings, floor area in a building for non-business purposes or selling, renting, or leasing houses, buildings, floor area in a building below the small-scale level are not subject to the provisions of this Law but must declare and pay taxes in accordance with the law; in the case of individuals selling, renting, or leasing houses, buildings, floor area in a building, they must also perform notarization or certification in accordance with the provisions of Clause 5 Article 44 of this Law.

Article 10 of the Law on Real Estate Business in 2014 stipulates:

Conditions for organizations and individuals doing real estate business

1. Organizations and individuals doing real estate business must establish a business or cooperative (hereinafter referred to as a business) and have a charter capital of not less than VND 20 billion, except for the cases specified in Clause 2 of this Article.

2. Organizations, households, and individuals selling, transferring, renting, or leasing small-scale real estate, not regularly, do not have to establish a business but must declare and pay taxes in accordance with the law.

3. The Government shall specify this Article.

Therefore, from January 1, 2025, individuals when doing small-scale real estate business do not have to establish a company but still have to declare and pay taxes.

Compared to the current regulations, the subject of small-scale real estate business that does not have to establish a company has changed. It is no longer two subjects of organizations and households.

What forms of real estate business are available to domestic organizations and individuals in Vietnam?

According to Clause 1 Article 10 of the Law on Real Estate Business in 2023 (effective from January 1, 2025), the forms of real estate business available to domestic organizations and individuals include:

- Investing in the construction of houses, buildings for sale, lease, or lease purchase;

- Investing in the construction of technical infrastructure in a real estate project for the transfer, lease, or sublease of land use rights that have technical infrastructure;

- Buying, leasing houses, buildings, floor area in a building for sale, lease, or lease purchase;

- Receiving the transfer of land use rights that have technical infrastructure in a real estate project for transfer, lease;

- Leasing houses, buildings, floor area in a building for sublease;

- Leasing land use rights that have technical infrastructure in a real estate project for sublease;

- Receiving the transfer of the entire or part of a real estate project to continue investing in construction and business.

What are the conditions for a company to be able to do real estate business in Vietnam?

According to Clause 2 Article 9 of the Law on Real Estate Business in 2023 (effective from January 1, 2025), a company that does real estate business must meet the following conditions:

- Not being in a period of being prohibited from doing real estate business, being temporarily suspended, or being discontinued from operating according to a court judgment, decision of the Court, or decision of the competent state agency;

- Ensuring the ratio of outstanding loans, outstanding corporate bonds to equity;

- A real estate business enterprise through a real estate project must have a charter capital of not less than 20% of the total investment capital for a project with a land use area of less than 20 hectares, not less than 15% of the total investment capital for a project with a land use area of 20 hectares or more and must ensure the ability to mobilize capital to implement the investment project;

In the case of a real estate business enterprise that simultaneously implements multiple projects, it must have enough charter capital to be allocated to ensure the above ratio for each project to implement all projects.

Best regards!