Conditions for real estate business in Vietnam from March 1, 2022

Conditions for real estate business in Vietnam from March 1, 2022

Organizations and individuals that want to do real estate business must meet certain conditions. Recently, the Government issued Decree 02/2022/ND-CP, leading to changes in the conditions for real estate business in Vietnam from March 1, 2022.

Conditions for real estate business in Vietnam

Article 4 of Decree 02/2022/ND-CP stipulates that organizations and individuals trading real estate in Vietnam must satisfy the following conditions:

(1) Must establish an enterprise or cooperative.

(2) Information must be made public.

Information that must be disclosed includes:

  • Information about the enterprise, including name, head office address, contact phone number, name of the legal representative)
  • Information about real estate put into business as prescribed in Clause 2, Article 6 of the Law on Real Estate Business 2014, information about mortgage of houses, construction works, real estate projects put into business (if any), information on the quantity and type of real estate products being traded, the quantity and type of real estate products sold, transferred, leased and purchased and the remaining quantity and types of products that are still being traded.

Note: The publicly available information specified at this point that changes later must be promptly updated as soon as there is a change.

Place of information disclosure:

  • Real estate investment projects must be publicized on the enterprise’s website and at the head office of the Project Management Board.
  • In case of business through the real estate exchange, it must be disclosed at the real estate exchange.

(3) Only trade in real estate that fully meets the conditions specified in Article 9, Article 55 of the Law on Real Estate Business 2014.

Conditions of real estate put into business

Houses and construction works put into business must fully meet the following conditions:

  • Having registered ownership of houses and construction works attached to land in the certificate of land use right. For existing houses and constructions in real estate investment and business projects, only a certificate of land use rights is required in accordance with the provisions of the law on land.
  • There is no dispute over land use rights, ownership of houses and construction works attached to the land.
  • Not being distrained to ensure judgment enforcement.

Types of land permitted to trade in land use rights must fully meet the following conditions:

  • Have certificates.
  • There is no dispute over land use rights.
  • The land use right is not distrained to secure judgment enforcement.
  • During the land use term (within the land use term).

Real estate formed in the future to be put into business must meet the following conditions:

Having papers on land use rights, project dossiers, construction drawing designs approved by competent authorities, construction permits in case permits and papers on acceptance of construction completion, papers on construction of corresponding technical infrastructure according to the project schedule.

If it is an apartment building or a mixed-use building that is intended to be built in the future, there must be a record of acceptance and completion of the foundation of that building.

Before selling or leasing-purchase houses to be formed in the future, the investor must notify in writing the provincial-level housing management agency that the house is eligible for sale or lease-purchase.

(4) Capital conditions

  • Capital conditions only apply to cases where the investor is selected to be the investor of a real estate project according to the provisions of law.
  • The investor selected to be the project investor must have equity of not less than 20% of the total investment capital for projects 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.

The determination of equity is 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 the preceding year). If the enterprise is newly established, the equity shall be determined according to the actual contributed charter capital.

Note: Organizations, households, and individuals that sell, transfer, lease, or lease-purchase real estate on a small-scale or irregular basis below are not required to have the above 04 conditions:

  • Agencies or organizations selling houses and construction works, transferring land use rights due to bankruptcy, dissolution or division in accordance with law.
  • Agencies or organizations that sell, transfer, lease, lease-purchase real estate as public property in accordance with law.
  • Credit institutions, foreign bank branches, asset management companies of credit institutions (AMCs), asset management companies of Vietnamese credit institutions (VAMC) that sell houses, construction works, transfer of land use rights, transfer of real estate projects being used as guarantees or mortgages for debt recovery in accordance with the law.
  • Organizations, households and individuals selling houses, construction works, transferring land use rights according to court decisions or decisions of competent state agencies when settling disputes, complaints and and denunciation.
  • Organizations, households and individuals that sell, lease, lease-purchase houses and construction works under lawful ownership, transfer, lease or sublease land use rights under lawful use rights.
  • Organizations, households and individuals that sell, lease, lease-purchase or transfer real estate they invest in and build but are not real estate construction investment projects for business in accordance with the law. 

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