Guidance on capital mobilization through bond Issuance for housing investment and construction projects in Vietnam

Guidance on capital mobilization through bond Issuance for housing investment and construction projects in Vietnam (Image from Internet)

1. Guidance on capital mobilization through bond issuance for housing investment and construction projects in Vietnam

According to the provisions of Clause 1, Article 44 of Decree 95/2024/ND-CP on capital mobilization through bond issuancefor housing investment and construction projects in Vietnam:

- The project investor needing to raise capital must meet the conditions for issuing bonds and comply with the order and procedures for issuing bonds as prescribed by the law on securities and corporate law. In the case of capital mobilization from foreign investors, there must also be compliance with regulations on foreign investors contributing capital, purchasing shares, and stakes in economic organizations as prescribed by the investment law;

- The housing construction project investor must be selected according to the provisions of housing law;

- In cases where the investor has mortgaged part or all of the project, or mortgaged housing in the project, and registered the mortgage according to regulations, if bonds are issued to raise capital for investing in the mortgaged project part or housing, procedures must be undertaken to deregister the mortgage or reduce the mortgaged assets as prescribed by the law on the registration of security measures before issuing bonds as stipulated in Clause 1, Article 44 Decree 95/2024/ND-CP.

Note: capital mobilization through the issuance of sharesfor housing investment and construction projects in Vietnam must meet the conditions for issuing shares and comply with the order and procedures for issuing shares as prescribed by the law on securities. (According to Clause 3, Article 44 Decree 95/2024/ND-CP)

2. Conditions for capital mobilization through loan from credit institutions, financial organizations operating in Vietnam

The conditions for capital mobilization by loan from credit institutions, financial organizations operating in Vietnam are stipulated in Article 46 of Decree 95/2024/ND-CP including:

- In cases of capital mobilization by borrowing from credit institutions operating in Vietnam for housing investment and construction projects, the project investor must have a decision on land allocation or land lease from a competent authority or have land use rights according to the provisions of the land law.

If the housing construction investment project falls under the category of investment policy approval simultaneously with the approval of the investor as the project’s investor, an investment policy approval document from a competent authority is required.

- In cases of borrowing according to the lending mechanisms stipulated by the Government of Vietnam or the Prime Minister of Vietnam, compliance with these lending mechanisms is required.

- In cases of capital mobilization by borrowing from public financial institutions and non-public financial institutions operating in Vietnam, the project requiring the loan must have an approved feasibility study report or technical-economic report according to the provisions of construction law and meet other loan conditions as stipulated by the lending financial institution.

- In cases of capital mobilization by borrowing from the Social Policy Bank, compliance with the provisions of the law on the development and management of social housing is required.

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