What is real estate trading? Requirements on real estate trading in Vietnam 2022

What is real estate trading? Requirements on real estate trading in Vietnam 2022 (Internet image)

1. What is real estate trading?

According to Clause 1, Article 1 of the Law on Real Estate Trading 2014, real estate trading means capital investment

- In building, purchasing, and receiving real estate for sale, for transfer,

- For lease, for sublease, or for lease purchase;

- Provision of real estate brokerage services;

- Real estate trading floor services;

- Real estate counseling services or real estate management for profit purposes.

2. Requirements in terms of organizations or individuals conducting real estate trading in Vietnam 2022

Requirements in terms of organizations or individuals conducting real estate trading in Vietnam include:

Any organizations or individuals wish to conduct real estate trading shall set up enterprises or cooperatives (hereinafter referred to as enterprises) and have legal capital not smaller than VND 20 billion, excluding: Any organizations, households and individuals who conduct small-scale or irregular transactions of real estate sale, transfer, lease-out, and lease purchase shall not be required to set up enterprises, but they shall make tax declaration as prescribed.

(Article 10 of the Law on Real Estate Trading 2014)

Specifically, the conditions of organizations and individuals trading real estate are guided in Article 4 of Decree 02/2022/ND-CP as follows:

* Organizations and individuals shall meet the following criteria to conduct real estate trading:

- They must establish an enterprise in accordance with the law on enterprises or a cooperative in accordance with the law on cooperatives, with a line of business in relation to real estate trading (hereinafter referred to as enterprise);

- They must publicize on the enterprise's website, at the head office of the project management board (for projects on real estate trading and investment), at the real estate exchange (for the case of business through the real estate exchange) information about

+ The enterprise (including name, address of head office, contact phone number, name of the legal representative),

+ Information about real estate to be put on market as prescribed in Clause 2, Article 6 of the Law on Real Estate Trading 2014, information on mortgage of houses, construction works, real estate projects to be put on market (if any),

+ Information on the number, type of real estate products being traded, quantity and types of real estate products sold, transferred, lease-purchased and the quantity and types of remaining products that are still being traded.

If any information that has been publicly at this point changes later, it must be promptly updated upon the change;

- Trading of eligible real estate as prescribed in Article 9, Article 55 of the Law on Real Estate Trading 2014.

* In case an investor is selected as the investor of a real estate project according to law, such investor must have an equity of not less than 20% of the total investment capital for the project with a land use scale of less than 20 hectares, not less than 15% of the total investment capital, for the project with a land use scale of 20 hectares or more.

In performing real estate trading, the project investor must meet the eligibility criteria specified in Clause 1 of Article 4 of Decree 02/2022/ND-CP.

The equity is determined based on the results of the most recent audited financial statements or the results of independent audit reports of the operating enterprise (made in the year or preceding year); in case of a newly established enterprise, the equity shall be determined according to the actual contributed charter capital as prescribed by law.

Diem My

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