From 2021, real estate business in Vietnam does not require a minimum legal capital of 20 Billion VND

From 2021, real estate business in Vietnam does not require a minimum legal capital of 20 Billion VND​ (Illustration image)

According to the regulations in Clause 1, Article 10 of the Law on Real Estate Business 2014 guided by Section 1 Chapter II of Decree 76/2015/ND-CP, organizations and individuals engaged in real estate business in Vietnam must establish an enterprise in accordance with the law on enterprises or a cooperative according to the law on cooperatives (hereinafter referred to as enterprises) and must have a legal capital not less than VND 20 billion, except for the following cases:

- Organizations, households, and individuals selling, transferring, leasing, or lease-purchasing small-scale real estate irregularly as stipulated in Article 5 of Decree 76/2015/ND-CP;

- Organizations and individuals providing real estate services as stipulated in Chapter IV of the Law on Real Estate Business 2014.

However, at Point a, Clause 2, Article 75 of the Law on Investment 2020 (effective from January 1, 2021), it is regulated that organizations and individuals doing real estate business must establish an enterprise or cooperative (hereinafter referred to as enterprises), except for cases stipulated in Clause 2, Article 10 of the Law on Real Estate Business 2014.

Thus, Law on Investment 2020 has abolished the condition "must have a legal capital not less than VND 20 billion" for organizations and individuals engaging in real estate business. Therefore, from January 1, 2021, organizations and individuals engaged in real estate business in Vietnam are only required to establish an enterprise or cooperative and are not required to meet the condition of having a minimum legal capital of VND 20 billion, except for the following cases where it is not necessary to establish an enterprise or cooperative:

• Organizations, households, and individuals selling, transferring, leasing, or lease-purchasing small-scale real estate irregularly;
• Organizations and individuals providing real estate services as stipulated.

Additionally, the Law on Investment 2020 also amends and supplements Article 50 of the Law on Real Estate Business 2014 regarding the competence to permit the transfer of the entire or part of a real estate project, as follows:

- For real estate projects with approved investors or granted Investment Registration Certificates according to the provisions of the Law on Investment, the competence and procedures for transferring the entire or part of the project follow the provisions of the Law on Investment.

- For real estate projects not falling under the case of approved investors or granted Investment Registration Certificates according to the provisions of the Law on Investment, the competence to permit the transfer of the entire or part of the real estate project is carried out as follows:

• The People’s Committee of the province or central-affiliated city (hereinafter referred to as the provincial People’s Committee) decides to allow the transfer of the entire or part of the real estate project for projects decided by the provincial People’s Committee for investment;
• The Prime Minister of the Government of Vietnam decides to allow the transfer of the entire or part of the real estate project for projects decided by the Prime Minister of the Government of Vietnam for investment.

Ty Na

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