Establish foreign-owned real-estate trading company

In Vietnam, real-estate is a potential investment field, especially in crowded cities such as Ho Chi Minh City, Hanoi, Da Nang, Binh Duong… to which many foreign investors pay attention. Real-estate products which Vietnam customer have high demands are diverse, from apartments, private houses in different segments to offices or business locations…

The Schedule of Specific Commitments in Services of Vietnam in WTO does not regulate on real-estate trading. Besides that, in accordance with the Law on Investment, the Law on Enterprise and the Law on Real-Estate Trading, foreign investors are able to establish foreign-owned real-estate trading company in Vietnam without any limitation on capital contribution. However, the Law No. 03/2016/QH14 regulates that real-estate trading is a conditional business sector. Therefore, foreign investors who plan to establish a foreign-owned real-estate trading company in Vietnam should research carefully to satisfy those conditions. Understanding the laws of the target market is the key to success. To give our Clients a hand in the investment process, Viet An Law Firm collects and provides some basic information as follows:

Conditions to be satisfied when establishing foreign-owned real-estate trading company in Vietnam:

• Investors shall establish a company with a minimum legal capital is 20 billion VND;
• Business scope of foreign-owned real-estate trading company in Vietnam:
  • Rent buildings for sublease;
  • On the land which is leased by the State: Build houses for sale; build houses or constructions other than houses for sale, for lease or for lease purchase;
  • Receive total or a part of real-estate project from investors to build houses, constructions for sale, for lease or for lease purchase;
  • Build house on land which is allocated by the State for sale, for lease, for lease purchase;
  • Build houses, constructions on land which is leased in industrial parks, industrial complexes, export-processing zones, hi-tech zones or economic zone for trading for the proper land use.

Foreign investors can invest in real-estate in Vietnam by the two following options:

Option 1: Establish foreign-owned real-estate trading company in Vietnam (it could by 100% foreign-owned company or not)

Step 1: Foreign investors apply for issuance of decisions on investment policies by the People’s Committee of provinces

Depending on the scale and other features of the investment project, the competence of issuance of decisions on investment policies shall belong to the National Assembly, the Prime Minister or the People’s Committee of provinces.

An application for issuance of decisions on investment policies by the People’s Committee of provinces includes:

• A written request for permission for project execution;
• Individual investors: copies of ID or passport of each individual;
• Organization investors: copies of Establishment Certificate or equivalent paper confirming the legal status;
• Project proposal specifying: the investors, project’s objectives and scale; capital and capital rising method; location, duration and schedule of the project; labor demand;
• Copies of financial statements in the current 02 years or financial support commitment of the parent company or financial institutions; guarantee for investors’ financial capacity, description of investors’ financial capacity; request for investment incentives; assessment of socio-economic effects of the project;
• Land use demand. If the project does not use land allocated or leased by the State or does not require the State to change land use purpose, the copies of the lease agreement or equivalent papers proving that investors have rights to use the location shall be submitted;
• If the project use any technology in the List of technologies restricted from transfer, investors have to submit the explanation on technology transfer.

If the project is subjected to decisions on investment policies by the Prime Minister, besides the documents mentioned above, investors need to supplement the following documents:

• Land clearance and relocation plan (if any);
• Preliminary assessment of environmental impacts and environmental protection measures;
• Assessment of socio-economic effects of the project.

If the project is subjected to decisions on investment policies by the National Assembly: besides the documents required as those subjected to decisions on investment policies by the People’s Committee of provinces and the Prime Minister, investors need to supplement the Special policies proposal (if any).

Submit the application at: The Department of Planning and Investment.

The process: After the Department of Planning and Investment receives the application, the Department shall send them to the Ministry of Planning and Investment; simultaneously, to relating state-agencies (for example, land state-agencies) for advice. Then, the Department or the Ministry of Planning and Investment will make an assessment report to submit to the People’s Committee of provinces, the Prime Minister or the National Assembly to ask for decisions on investment policies. When those competence agencies approve, investors will be granted the Investment Registration Certificate within 05 working days.

Expected duration lasts from 35 – 40 days.

Step 2: Establish foreign-owned advertisement company in Vietnam

Apply for the Business Registration Certificate:

An application includes:

• A written request for business registration;
• The Articles of Associates;
• The list of members of the multi-member limited liability company or the list of partners of partnership;
• Notarized copies of ID or valid passport of each individual member; notarized copies of the Business Registration Certificate/Establishment Certificate of each organization member; notarized copies of ID or valid passport of each legal representative of each organization;
• Power of attorney (Clients grant to Viet An);
• Certificate of Investment Registration of foreign investors.

Submission place: The Department of Planning and Investment.

Duration: 03 – 06 working days.

Announce the business registration contents:

• Business registration information must be announced publicly on the National Portal of Business Registration within 30 days from the date of issuance of the Business Registration Certificate. The contents of the announcement are all the information stated in the Business Registration Certificate.
• Notice: In accordance with Clause 1 Article 26 of the Decree 50/2016/NĐ-CP, if the company does not announce or lately announce the business registration information on National Portal of Business Registration, they are fined an amount of money from 1.000.000 VND to 2.000.000 VND.

Engrave the seal and publish the seal sample:

• The company can authorized Viet An Law Firm or can engrave the seal by itself then announce the seal sample to the Department of Planning and Investment. The company is allowed to decide about the appearance, quantity and the contents of the deal but it must contain the name and the code of the company.

Option 2: Contribute capital, purchase shares, purchase capital contributions to Vietnamese real-estate trading company

If foreign investors choose this option, they do not have to apply for Investment Registration Certificate and save more time.

The procedures for shares/capital contribution purchase are:

Step 1: Foreign investors register to contribute capital, purchase shares/capital contributions to the company

Application includes:

• Application for capital contribution, shares/capital contributions purchase indicating: the information of the target company, the foreign capital contribution after completing the procedures;
• Copies of the ID or passport of each individual investor; copies of Establishment Certificate or equivalent papers confirming the legal status of each investor who is an organization.

Submission place: The Department of Planning and Investment.

The process: If the capital contribution, shares purchase, capital contribution purchase of foreign investors comply with the regulations on investment forms and foreign capital contribution, within 15 days from the date of receipt of the valid application, the Department of Planning and Investment will grant a written announcement. If the application does not satisfies conditions, the Department of Planning and Investment will grant a written announcement providing reasons and explanation.

Step 2: Transfer the shares, capital contributions and change the shareholders or members of the company

Foreign investment services in Viet An Law Firm:

• Consult about regulations on foreign investment in Vietnam;
• Consult about procedures, process relating to foreign investment in Vietnam;
• Consult about each business sector and its conditions;
• Draft the application for Business Registration Certificate/Investment Registration Certificate/registration for capital contribution/shares purchase/capital contributions purchase;
• Represent for Clients to prepare and submit the application to the state agencies when Clients authorize;
• Consult about after-establishing issues such as tax, labor, contracts, social insurance…

If you need more detailed information about regulations and procedures to establish foreign-owned real-estate trading company in Vietnam as well as other legal issues relating to company and investment in Vietnam, please feel free to contact Viet An Law Firm!