LEGAL UPDATE: Did you know that a new law on Real Estate Business Law (“REB Law”) has been passed by the National Assembly of Vietnam on 25 November 2014 and will come into effect as of 1 July 2015.
Below are highlights of some very key changes:
1. Rights of foreign individuals and organizations to purchase properties in Vietnam
The new REB Law allows all foreigners who are granted a Vietnamese visa to purchase residential properties (condos and landed housing) in Vietnam, and such properties can be sub-leased, inherited and collateralized. It is unclear whether any duration of a visa will suffice or not.
There is no limit on the number of units a foreigner can purchase, but the total number of units owned by foreigners may] not exceed 30% of the total units in one condominium complex, or not exceed 250 landed property units in one particular administrative (or the equivalent of) ward.
The new REB Law also allows all foreign investment funds, banks, Vietnamese branches, and representative offices of overseas companies to purchase properties in Vietnam for their offices.
Further, foreign individuals and organizations are allowed to purchase, rent and rent for hire purchase from real estate companies the houses and buildings. In particular, they shall be allowed to rent properties for their own use, to purchase, rent and rent for hire purchase the houses in accordance with the provisions of the Housing Law.
2. Other highlights on conducting REB
2.1 Increased legal capital for conducting REB
Companies conducting REB must have the legal capital of at least VND20 billion (approximately USD940,000).
2.2 Properties to be built in the future for sell, lease, etc.
An investor may sell, lease, lease for hire purchase the houses and buildings to be builtin the future if the following documents are available on:
(i) land use right, (ii) project file, (iii) drawings of design of execution already approved by a competent authority, (iv) construction permit (if required), and (v) documents on the check & acceptance of the completion of construction of all the technical infrastructure facilities in accordance with the schedule of the project.
In the case of an apartment building or mixed-use building complex for residential purposes to be built in the future, the minutes of check & acceptance of completion of the foundation of such building is required. Further, the developer must be guaranteed by a financial institution or a credit institution licenced to operate in Vietnam that it will complete the works before selling, leasing or leasing for hire purchase such houses and buildings.
