Foreign Investment Restrictions and Business Conditions for Real Estate Business in Vietnam
2. Scope of Activities of Real Estate Businesses (Distinctions within Real Estate Business)
3. Conditions Applicable to Real Estate Project Development Businesses
17. Industry Category 13. Real Estate No. 1
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1. Overview of Regulations
Business: Real Estate Business
Official Business Name under Vietnamese Law
CPC Code
VSIC Code
Business relating to real estate or land use rights held as owner, user, or lessee
None
6810
*Definition of Real Estate Business
Real estate business refers to activities carried out for profit by investing capital to create and sell or transfer houses, structures, or land use rights with infrastructure within a real estate project. It also includes leasing, subleasing, or hire-purchase of houses or structures; leasing or subleasing land use rights with infrastructure within a real estate project; and transferring real estate projects.
Investment and Business Conditions
Conditions under WTO Commitments
Conditions under Vietnamese Domestic Law (Law on Real Estate Business No. 29/2023/QH15)
The real estate business is open to foreign investors and foreign-invested enterprises; however, cross-border service provision is not permitted. To conduct real estate business in Vietnam, a local entity must be established. Foreign individuals may not conduct real estate business in Vietnam as sole proprietors.
Foreign investors may hold up to 100% ownership on a stand-alone basis.
Because there is no longer a restriction on the charter capital of a real estate business company, such a company may in principle be established with any amount of charter capital. (See the Q&A on Market Entry and Investment: Charter Capital for further reference.)
Restrictions on the Scope of Business for Foreign-Invested Enterprises
Foreign-invested real estate businesses may only engage in the following scope of activities.
Investing in the construction of houses or structures on land use rights created through real estate projects, for the purpose of sale, lease, or hire-purchase
Investing in the development of infrastructure within a real estate project, for the purpose of transferring, leasing, or subleasing land use rights with infrastructure
Leasing houses, structures, or part of the floor area within a structure, and subleasing the same
Acquiring all or part of a real estate project and continuing to invest in, construct, and operate the project
2. Scope of Activities of Real Estate Businesses (Distinctions within Real Estate Business)
Real Estate Subject to the Transaction
Scope of Real Estate Business
a. Houses and buildings
Leasing for the purpose of subletting
b. Land allocated by the State
Investment in house construction for the purpose of sale, lease, or hire-purchase
c. Land leased from the State
Investment in house construction for the purpose of lease
Investment in building construction for the purpose of sale, lease, or hire-purchase
d. Land leased within industrial parks, industrial clusters, export processing zones, and high-tech parks
Investment in building construction for business operations consistent with the designated land use purpose
Other Business Activities
e. Acquisition of all or part of another investor's real estate project, for the purpose of investing in the construction of houses or structures for sale, lease, or hire-purchase
3. Conditions Applicable to Real Estate Project Development Businesses
Real estate project development businesses must satisfy the following conditions.
Satisfy the financial safety ratios applicable to enterprises and comply with the provisions of the Law on Credit Institutions and the law on corporate bonds.
Where an enterprise engaged in real estate business borrows from a credit institution or issues corporate bonds to implement a real estate project for which it has been approved as the investor by a government authority, the total of outstanding borrowings from credit institutions, outstanding corporate bonds, and equity capital must not exceed 100% of the total investment amount for each project.
For real estate projects with a land use area of less than 20 hectares, the total of outstanding borrowings from credit institutions and outstanding corporate bonds must not exceed four times the enterprise's equity capital; for projects with a land use area of 20 hectares or more, it must not exceed 5.67 times the enterprise's equity capital.