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Conditions and Procedures for Establishing a Foreign-Invested Real Estate Company – Latest Update

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Establishing a real estate company with foreign capital in Vietnam is a complex process. With the rapid development of the real estate market, it is essential to fully understand the conditions and procedures to ensure compliance with Vietnamese legal regulations. This article provides an overview of the latest regulations, helping foreign investors better understand the necessary steps to realize their business plans in the real estate sector in Vietnam.

What Is Real Estate Business?

Conditions and Procedures for Establishing a Foreign-Invested Real Estate Company – Latest Update

Pursuant to Article 3 of the Real Estate Business Law 2023, real estate business is defined as:

“Real estate business refers to activities aimed at generating profit through the investment of capital to create housing, construction works, or land use rights with technical infrastructure in real estate projects for sale, transfer; lease, sublease, lease-purchase of housing and construction works; lease, sublease of land use rights with technical infrastructure in real estate projects; transfer of real estate projects; and real estate brokerage services.”

Scope of Real Estate Business Activities in Vietnam

Pursuant to Clauses 4 and 5, Article 10 of the Real Estate Business Law 2023, foreign-invested enterprises are permitted to engage in real estate business within the following scope:

– Lease housing and construction works for sublease;
– For land leased by the State, invest in constructing housing for lease; invest in constructing houses and non-residential construction works for sale, lease, or lease-purchase;
– Receive transfer of all or part of a real estate project from the project investor to construct houses and construction works for sale, lease, or lease-purchase;
– For land leased in industrial zones, industrial clusters, export processing zones, hi-tech zones, or economic zones, invest in constructing houses and construction works for business in accordance with the land use purpose.

In addition, foreign-invested companies may provide the following services: real estate brokerage services; real estate trading floor services; real estate consulting services; or real estate management services for profit.

Thus, foreign investors establishing an enterprise engaged in real estate business are permitted to operate within the above scope.

Forms for Foreign Investors to Establish a Real Estate Business Company in Vietnam

Conditions and Procedures for Establishing a Foreign-Invested Real Estate Company – Latest Update

– Establishing a real estate business company with foreign capital, including:
– Establishing a real estate business company with 100% foreign capital.
– Establishing a real estate business enterprise with less than 100% foreign capital.
– Foreign entrepreneurs purchasing shares or capital contributions from members or shareholders of an existing real estate business company licensed in Vietnam.

Conditions for Establishing a Real Estate Business Company with Foreign Capital in Vietnam

Regarding Capital Contribution Ratio

Foreign investors may contribute capital to establish a real estate business enterprise in Vietnam with a capital ratio ranging from 1% to 100%. Vietnamese enterprise law does not impose specific restrictions on the capital contribution ratio for foreign investors.

Minimum Required Capital

Pursuant to the Real Estate Business Law 2023, enterprises engaged in real estate business must have legal capital of VND 20 billion. This ensures that the enterprise has sufficient financial capacity to implement large-scale real estate projects and mitigate financial and legal risks.

  • Legal capital: The enterprise must have this amount upon registration of establishment for real estate business. This capital must be proven through financial statements and other relevant documents during the enterprise establishment process.
  • Capital sources: Capital may come from contributing members, shareholders, or bank loans, but must be legally valid and accurately recorded in the enterprise registration dossier.

Business Lines

The real estate business sector has specific codes and conditions. If the enterprise wishes to engage in additional sectors, it must meet the specific conditions of those sectors (for example, if engaging in real estate brokerage, the enterprise must have a real estate brokerage practice certificate upon establishment…).

Scope of Business Operations

For real estate business with foreign investment capital, the enterprise is only permitted to operate in the following specific areas:

1. Construct housing for lease, sale, or lease-purchase on land allocated by the State.
2. Lease housing or construction works to sublease to others.
3. Transfer real estate projects (in whole or in part) from project investors to construct works and housing for sale, lease, or lease-purchase.
4. Construct houses or construction works for business in accordance with the land use purpose on leased land in industrial zones, export processing zones, hi-tech zones…
5. Invest in constructing houses or non-residential construction works for lease on land leased by the State.

Conditions Regarding the Principal Office Address of the Real Estate Business Company

The principal office of the real estate business company must meet the following conditions: be located in the territory of Vietnam, have a clear address, and be at a location with commercial business functions such as office buildings or private houses.

The principal office of the company may not be located in apartment buildings, collective housing, or locations designated for residential use.

Conditions Regarding the Legal Representative of the Company

Pursuant to Article 12 of the Enterprise Law 2020, the legal representative of a real estate business company is an individual and must satisfy the following conditions:

  • May be a Vietnamese citizen or a foreigner.
  • At least 18 years of age and have full civil act capacity.
  • Not fall within the categories prohibited from managing or establishing enterprises.
  • Not required to be a contributing member or shareholder of the company.

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Dossier and Procedures for Establishing a Real Estate Business Company with Foreign Capital – Latest Update

Establishing a Real Estate Business Company with Foreign Capital in Vietnam

**Step 1:** Apply for Investment Policy Approval

Depending on the scale and characteristics of the investment project, the investment policy decision shall be issued by the Prime Minister, the National Assembly, or the provincial People’s Committee.

The dossier for investment policy decision under the jurisdiction of the provincial People’s Committee includes the following components:

  • Application for implementation of the investment project;
  • Certified copy of citizen identity card, citizen identity card, or passport if the investor is an individual;
  • Certified copy of establishment certificate or equivalent document confirming legal status if the investor is an organization;
  • Investment project proposal including: investor; objectives, scale; location, duration, progress; capital and mobilization plan; labor demand; proposed investment incentives; socio-economic impact assessment and efficiency;
  • Certified copy of financial statements for the two most recent years or commitment of financial support from the parent company or financial capacity guarantee from the investor;
  • Proposed land use demand;
  • Explanation of technology use (if any).

The dossier for investment policy approval shall be submitted to the Department of Planning and Investment where the principal office is planned to be located. The Department of Planning and Investment receives the dossier and forwards it to the Ministry of Planning and Investment, and solicits opinions from relevant agencies. Thereafter, the Department of Planning and Investment prepares the project appraisal dossier and submits it to the Prime Minister, provincial People’s Committee, or National Assembly for investment policy decision. Upon receipt of the decision, the investor will be issued the Investment Registration Certificate.

**Step 2:** Establish a real estate business company with foreign capital

The dossier for establishing a foreign-invested real estate business enterprise includes:

  • Application for enterprise registration;
  • Enterprise charter;
  • List of members;
  • Certified copy of citizen identity card or passport of individual members; certified copy of business registration certificate of organizational members; certified copy of citizen identity card of the legal representative of that organization;
  • Power of attorney for the person carrying out procedures to establish a foreign-invested real estate business company;
  • Investment Registration Certificate issued to foreign investors.

Submission location: Department of Planning and Investment.

**Step 3:** Public disclosure of enterprise registration information

Enterprise registration information must be publicly disclosed on the National Enterprise Registration Portal within 30 days from the date of issuance of the Enterprise Registration Certificate.

**Step 4:** Engrave the seal and announce the seal sample

Capital Contribution, Share Purchase, or Capital Contribution Purchase in a Vietnamese Real Estate Business Company

**Step 1:** The foreign investor registers capital contribution, share purchase, or capital contribution purchase in the economic organization

The dossier for registration of capital contribution includes:

  • Application for registration of capital contribution, share purchase, including the following contents: information on the economic organization in which the foreign investor intends to contribute capital or purchase shares; ratio of charter capital ownership by the foreign investor after contribution or purchase;
  • Certified copy of citizen identity card, citizen identity card, or passport if the investor is an individual; certified copy of establishment certificate if the investor is an organization.

Submission location: Department of Planning and Investment where the company has its principal office.

Processing time: Within 15 working days from receipt of a complete and valid dossier, the Department of Planning and Investment shall issue a written notice approving capital contribution.

If the dossier is invalid, the investor will receive a written notice stating the reasons.

**Step 2:** Carry out capital contribution, transfer, purchase, or sale of capital contributions or shares in a real estate company in Vietnam

  • After receiving the notice approving capital contribution, the foreign investor and the Vietnamese real estate business enterprise owner shall complete the capital contribution, sign the capital contribution, transfer, purchase, or sale contract in accordance with the law.
  • To facilitate capital contribution, the investor should open an investment account at a Vietnamese bank, then transfer the contributed capital through this account.

**Step 3:** Carry out procedures for change of members, shareholders, and company type

After receiving capital contribution or selling or transferring capital contributions or shares to a foreign investor, the Vietnamese real estate business enterprise must carry out procedures for changing members or shareholders of the company. In addition, if the capital contribution changes the company type, the enterprise must also carry out procedures for amending the enterprise registration as prescribed.

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Consultation Services for Procedures to Establish a Real Estate Business Company with Foreign Capital – Latest Update at BKC Law

The consultation service for procedures to establish a real estate business company with foreign capital at BKC Law provides the most comprehensive and updated solutions for investors. We support clients from selecting the appropriate investment form, preparing necessary dossiers, to guiding the implementation of related legal procedures. Our team of experts closely monitors changes in legal regulations, ensuring that clients receive accurate and timely information. With extensive experience, we are committed to accompanying you to optimize the establishment process and develop your business in the Vietnamese market.

To receive free legal consultation at BKC Law, please contact our lawyers using the following information:

Telephone: 0901 3333 41
Email: info@bkclaw.vn
Branch in District 1: 9th Floor, Diamond Plaza Building, 34 Le Duan Street, District 1, Ho Chi Minh City
Branch in Binh Tan: 41 Ten Lua Street, Binh Tan District, Ho Chi Minh City

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