Prohibited acts in real estate business in Vietnam under the Law on Real Estate Business 2023

Prohibited acts in real estate business in Vietnam under the Law on Real Estate Business 2023 (Internet image) 

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Prohibited acts in real estate business in Vietnam under the Law on Real Estate Business 2023

According to Article 8 of the Law on Real Estate Business 2023, prohibited acts in real estate business in Vietnam include:

-  Put the real estate that does not meet the conditions set forth in this Law on the market.

- Forge documents or deliberately falsify information on the real estate or the real estate project to be put on the market.

- Fail to disclose information on the real estate or the real estate project to be put on the market as prescribed in this Law.

- Commit fraudulent or deceitful acts in real estate business.

- Receive payment for sale or lease purchase of off-plan housing, off-plan buildings or their floor areas against the provisions of this Law; use money received from buyers or tenant-buyers of off-plan housing, off-plan buildings or their floor areas against regulations of law.

- Partially fulfill or fail to fulfill financial obligations to the State.

- Issue or use practicing certificates for real estate brokers against the provisions of this Law.

- Collect, manage or use charges, fees and other amounts related to real estate business against regulations of law.

Eligibility requirements to engage in real estate business in Vietnam

Pursuant to Article 9 of the Law on Real Estate Business 2023, the eligibility requirements to engage in real estate business are as follows:

(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 (3) and (4).

An organization or individual providing real estate services shall comply with the provisions of (5).

(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.

(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 the Law on Real Estate Business 2023.

(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.

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