Proposal to amend the Law on Investment, remove major bottlenecks in the real estate market, amend Vietnam investment law, amend investment law in Vietnam, amend investment law 2020 in Vietnam

Vietnam: Proposal to amend the Law on Investment, remove major bottlenecks in the real estate market

(Vietnam) If the amendments to the Investment Law 2020 are approved as proposed by the Ministry of Planning and Investment, hundreds of projects will undo the bottleneck in investor selection procedures.

Official Letter No. 6278/BKHĐT-PC has just been sent by Deputy Minister of Planning and Investment Tran Duy Dong to the Ministry of Justice on September 17, 2022, to implement the Prime Minister’s direction in Official Letter No. 6505/VPCP- PL dated September 15, 2021, on the draft Law amending and supplementing a number of articles of the Law on Public Investment, the Law on Investment in the form of public-private partnership, the Law on Investment, the Law on Bidding, the Law on Electricity, the Law on Enterprises Industry, Law on Supporting Small and Medium Enterprises, Law on Customs.

Proposal to amend the Investment Law 2020

In it, the Ministry of Planning and Investment gives its opinion on the amendment of point c, clause 1, Article 75 of the Law on Investment 2020 – a regulation that has a great impact on the real estate market, especially investors in the commercial housing projects.

In Clause 1, Article 75 of the Law on Investment amended in 2020, it is stated: “Article 75. Amending and supplementing a number of articles of the law related to business investment.

  1. Amending and supplementing a number of articles of the Law on Housing No. 65/2014/QH13 which has been amended and supplemented with a number of articles under Law No. 40/2019/QH14 as follows:

c) To amend and supplement Clause 1, Article 23 as follows: 1. Having the lawful right to use residential land and other types of land permitted by a competent state agency to change the land use purpose to residential land.”

To concretize this content, on March 26, 2021, the Government issued Decree 30/2021/ND-CP amending Decree 99/2015/ND-CP. In particular, specify the cases of being selected as the investor of a commercial housing project or an urban area project with housing when “a) Has the lawful right to use residential land; b) Having the lawful right to use residential land and other types of land permitted by a competent state agency to change the land use purpose to residential land; c) Receive the transfer of residential land use rights in accordance with the land law for the construction of commercial houses.

With this regulation, commercial housing projects are almost 100% closed because only projects related to residential land will investors be recognized as housing construction project investors, the rest other land but not “sticky” to any residential land (as in the case of only agricultural land use rights or non-agricultural land without residential land), investors cannot be selected.

Meanwhile, most of the land funds for housing development that real estate investors own are agricultural land, non-agricultural land, production, and business land. Although these land lots have been granted has the authority to approve construction plannings, master plans, and land use plans of provinces and cities over time with residential land purposes, but the project cannot be implemented due to not having a few square meters of current residential land.

This has caused hundreds of commercial housing projects in the country not to be recognized as investors, causing great damage to businesses, and at the same time reducing the supply of housing projects and one of the reasons for the rise in house prices.

Previously, in Official Letter No. 5179/BKHĐT-PC dated August 6, 2021, to the Ministry of Justice, the Ministry of Planning and Investment also informed that, excluding other localities, there were about 82 Hanoi projects, Ho Chi Minh City has about 126 commercial housing projects blocked by this regulation.

The Ministry of Planning and Investment proposes to amend and supplement Point c, Clause 1, Article 75 of the Law on Investment in the direction: “Amend and supplement Clause 1, Article 23 as follows: “ 1. Having the right to use residential land or other types of land in accordance with master plans and plans on land use approved by competent state agencies in accordance with the law on land.

If approved, this is an extremely important amendment that can remove major bottlenecks for commercial housing projects when businesses only need to own a land fund “in line with the master plan, use land use”, but not the origin of residential land or a part of residential land will be recognized as an investor.

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