LEGAL UPDATE: Did you know that the Government of Vietnam has recently removed one of the major obstacles for developers of urban residential projects?
On 5 November, the Government issued Resolution 164 abolishing the requirement that urban residential developers must obtain an investment approval in addition to the in-principle approval/decision that they are already required to obtain.
Why is this significant?
1. Until such approval is obtained, construction could not commence.
2. There is usually a large time gap between the in-principle approval/decision and investment approval. During this time, developers were required to invest in projects and complete a number of requirements set out in the in-principle approval/decision without any certainty that they would obtain the investment approval.
3. In addition, the requirements to obtain both approvals are virtually the same.
Thus, abolishing this additional license will facilitate the construction of projects and eliminate a major risk for developers that they may not obtain the final approval.
The real estate market does need support given the impacts of COVID-19.
As lawyers, we are delighted to see this change as this approval has always been the road block to financing, M&A real estate deals as it is always a CP to closing; and it was frustrating to have to advise that developers did not have 100% exclusive rights to the project until the investment approval is obtained when in fact they do.
Our detailed write-up and the English translation are in the links below.
DN Legal, 27 September 2020