Are credit institutions allowed to deal in real estate in Vietnam?

Are credit institutions allowed to deal in real estate in Vietnam? (Internet image)

Regarding this issue, LawNet would like to answer as follows:

1. Are credit institutions allowed to deal in real estate in Vietnam?

Specifically, Article 132 of the Law on Credit Institutions 2010, credit institutions may not deal in real estate, except in the following cases:

- They purchase, invest in and own real estates used as their business buildings and offices or warehouses in direct service of then- professional operations;

- They lease part of their own business buildings which are not yet used;

- They hold real estate as a result of debt handling. Within 3 years after issuing a decision to handle a security asset being real estate, credit institutions shall sell, transfer or purchase this real estate so as to ensure the ratio of investments in fixed assets and the use purposes of fixed assets specified in Article 140 of the Law on Credit Institutions 2010.

2. Requirements in terms of real estate to be put on the market in Vietnam

Pursuant to Article 9 of the Law on real estate trading 2014, the requirements in terms of real estate to be put on the market are as follows:

- A building to be put on the market shall satisfy the following requirements:

+ The ownership of the building on land is registered in the Certificate of land use right (hereinafter referred to as Certificate of land). Regarding an off-the-plan building in the real estate project, it is only required to have the Certificate of land as prescribed in regulations of law on land.

+ There is no dispute about the land and ownership of the building on land.

+ The building is not distrained.

- Types of land permitted to be put on the market shall satisfy the following requirements:

+ There are Certificates of land as prescribed in regulations of law on land.

+ There is no dispute about the land.

+ The land is not distrained;

+The land use term is still unexpired.

3. Scope of real estate trading in Vietnam

According to Article 11 of the Law on real estate trading 2014 stipulates the scope of real estate trading in Vietnam:

- Any Vietnamese organizations and individuals may conduct real estate trading under following forms:

+ Purchase buildings for sale, for lease, or for lease purchase;

+ Rent buildings for sublease;

+ Build houses on land which is allocated by the State for sale, for lease, or for lease purchase; transfer the land which is divided into smaller lots for sale as prescribed in law on land; build technical infrastructures of cemetery on that land for transfer of both the land and the technical infrastructures;

+ Build houses on the land which is leased by the State for lease; build houses or constructions other than houses on such land for sale, for lease, or for lease purchase;

+ Build houses on land which is recognized by the State for sale, for lease, or for lease purchase;

+ Build buildings on land which is transferred from organizations, households or individuals for sale, for lease, or for lease purchase;

+ Build buildings on land which is leased from organizations, households or individuals for lease according to proper land use.

+ Receive total or a part of real estate project from investors to build buildings on it for sale, for lease, or for lease purchase;

+ Receive or rent land from organizations, households or individuals to build technical infrastructures on it for transfer or lease of both the land and the infrastructure.

- Overseas Vietnamese may conduct real estate trading in the following forms:

+ Forms prescribed in Point b, d, g and h Clause 1 of Article 11 of the Law on real estate trading 2014;

+ Build houses on land which is allocated by the State for sale, for lease, or for lease purchase;

+ Build buildings on land which is leased out or transferred in industrial parks, industrial complexes, export-processing zones, hi-tech zones, or economic zone for trading for the proper land use.

- Foreign-invested enterprises may conduct real estate trading in the following forms:

+ Forms prescribed in Point b, d, h Clause 1 and Point b Clause 2 of Article 11 of the Law on real estate trading 2014;

+ Build buildings on land which is leased out or transferred in industrial parks, industrial complexes, export-processing zones, hi-tech zones, or economic zone for trading for the proper land use.

Ho Quoc Tuan

>> CLICK HERE TO READ THIS ARTICLE IN VIETNAMESE