A Thorough Guide to Vietnam's 2023 Law on Real Estate Business: Key Amendments and Their Practical Impact
NEXORA Lawfirm, Managing Attorney
Attorney admitted in Vietnam
Mediator, Insolvency Administrator, Outside Corporate Auditor
Table of Contents
01 - Vietnam's 2023 Law on Real Estate Business: enactment and analysis of its impact
02 - Revised scope of application: clearer classification of real estate transactions
03 - The new legal definition of a "real estate project"
04 - Clarifying which real estate assets are subject to transaction
05 - Strengthened disclosure obligations for real estate transactions
06 - Minimum equity requirement applicable to all developers
07 - Clarifying real estate business by foreign-invested economic organizations
08 - Transfers and lease-back of floor area within buildings now formally permitted
09 - Temporary restrictions on real estate transactions where an administrative violation exists
NEXORA LAWFIRM has for many years supported Japanese companies engaged in real estate development, sales, and leasing in Vietnam, and has responded swiftly to amendments in real estate business legislation. This article provides an accessible explanation of the key points of the 2023 amendments to the Law on Real Estate Business that affect foreign investors, developers, and leasing companies. It covers changes to project approval, housing sales licensing, sales methods, and contract requirements, and organizes the practical points to be aware of. If you are researching topics such as "Vietnam real estate law amendment," "real estate project registration requirements," "Japanese developer Vietnam law," or "Vietnam housing sales license," please read on.
01 - Vietnam's 2023 Law on Real Estate Business: enactment and analysis of its impact
On November 28, 2023, Vietnam's National Assembly formally passed the "2023 Law on Real Estate Business." This Law is intended to increase transparency in Vietnam's real estate transaction market and address legal issues that had long remained unresolved.
The 2023 Law on Real Estate Business provides a new framework for commercial activities in Vietnam involving real estate development, sale, lease, and brokerage, and is expected to have a significant impact on the real estate investment environment going forward.
This article explains, in turn, the key amendments introduced by the 2023 Law on Real Estate Business and their practical implications.
02 - Revised scope of application: clearer classification of real estate transactions
The 2023 Law on Real Estate Business largely maintains the basic scope of application found in the 2014 Law on Real Estate Business, while newly introducing provisions that expressly exclude certain categories of transaction. This provides clearer legal guidance on which real estate transactions are subject to regulation under this Law.
The following classification serves as a reference for determining whether a real estate transaction falls within the scope of the Law.
Type of real estate
Within scope
Excluded (expressly)
Public assets (State-owned assets)
✖ Out of scope
● Excluded as public assets
Land use rights (with infrastructure in place, for business purposes)
● Within scope
–
Housing (existing and to be completed)
● Within scope
● Housing supplied by the Vietnam General Confederation of Labour for workers is excluded
Buildings (education, healthcare, commercial, lodging, industrial, and other uses generally) and their floor area
● Within scope
–
Real estate development projects (sale on a project basis)
● Within scope
–
In this way, the 2023 Law expressly excludes certain public-sector housing supply projects and transactions in State assets, clarifying in law the distinction from private commercial transactions.
🔹 Exclusions based on the nature of the transaction
The 2023 Law on Real Estate Business clearly defines the scope of real estate transactions excluded from its application based on the nature of the transaction. Compared with the 2014 Law, this is intended to clearly exclude from the scope of the Law transactions for non-commercial purposes and transfers of real estate carried out through judicial procedures.
Specifically, the following types of transactions are excluded from the scope of the 2023 Law on Real Estate Business:
Transfers of real estate carried out pursuant to a court judgment, arbitral award, or decision of an administrative authority (including transfers of ownership through legal procedures such as inheritance, division, merger, or consolidation)
Transfers of housing or buildings not for business purposes (sales of buildings or floor area by individuals or organizations for non-commercial purposes)
Sale, lease, or lease-purchase contracts for housing or buildings that qualify as "small-scale"
However, it is worth noting that these exclusions do not apply to the "sale of land use rights." In other words, even where a transaction is small in scale, the transfer of land use rights remains subject to regulation under the Law on Real Estate Business.
03 - The new legal definition of a "real estate project"
The 2023 Law on Real Estate Business codifies the concept of a "real estate project" and defines it more comprehensively and specifically than before. Under the new Law, a real estate project refers to "a construction investment project, approved by a competent authority in accordance with law, for the development and sale, for business purposes, of housing, buildings, or land use rights with infrastructure in place."
This definition encompasses a diverse range of real estate development projects, including the following:
Housing construction investment projects (apartment buildings, detached houses, etc.)
Urban development projects
Rural residential land development projects
Construction projects for buildings for specific purposes, such as education, healthcare, sports, culture, offices, commerce, services, tourism, lodging, or industry
Construction projects for mixed-use buildings combining the above functions
Technical infrastructure construction projects (roads, electricity, water supply, etc.)
Infrastructure development projects for industrial parks, industrial clusters, and hi-tech parks
04 - Clarifying which real estate assets are subject to transaction
The 2023 Law on Real Estate Business introduces clearer and more flexible provisions than before regarding the scope of real estate assets subject to commercial transactions. The main points are summarized below.
✅ Assets that have passed acceptance inspection may also be traded as "completed assets"
Under this Law, a "completed house or building" refers to a building that has passed the acceptance inspection appropriate to its intended use and has become fit for use. This goes a step further than the 2014 Law's definition based on "having commenced use," and represents a significant change in that an asset may be treated as tradable once it has passed acceptance inspection, even prior to handover. This gives developers greater flexibility to monetize assets at an earlier stage.
✅ The scope of land use rights subject to transaction is now more limited
The 2023 Law on Real Estate Business moves away from treating all types of land use rights as subject to regulation, and now limits the scope of real estate transactions, within a real estate project, to land use rights on which infrastructure has already been developed. This restricts the use of agricultural land or undeveloped land for real estate business, thereby enhancing the legality and transparency of projects.
✅ Tourism, lodging, and mixed-use buildings are also covered
This Law also expressly recognizes tourism facilities, lodging facilities, and mixed-use facilities as subject to real estate transactions. This signals a move toward giving a degree of legal standing to forms of real estate development that have drawn significant attention in recent years, such as condotels and officetels, and will serve as a foundation for legal certainty in future practice.
✅ Transactions in floor area within a building are also legalized
Furthermore, the 2023 Law on Real Estate Business clearly recognizes units of floor area within a building (e.g., office floors, retail units) as tradable assets, and confirms the legality of partial sale and lease within office buildings and commercial facilities. This gives a legal basis to contracts for floor area units that had frequently been used in practice, substantially reducing the associated risk.
05 - Strengthened disclosure obligations for real estate transactions
The 2023 Law on Real Estate Business substantially strengthens disclosure obligations as a precondition for making real estate available for transaction in the market. This is an extremely important amendment from the standpoint of transaction transparency and consumer protection.
✅ The scope of information required to be disclosed has been expanded
First, the scope of information and documents subject to disclosure is set out in more detail and more comprehensively than under the previous law. Real estate businesses (in particular, project developers) are required to publish the following key documents on their official websites and elsewhere:
The approval document for the investment policy decision
The approved detailed master plan (1/500 scale)
The land allocation or lease decision
The construction permit
Disclosure of these legal documents allows investors and purchasers to verify the legality and reliability of a project in advance.
✅ Registration on the Government's official information system is also mandatory
In addition to disclosure on their own websites, real estate businesses are also required to register and publish the relevant information on the Government-operated "Housing and Real Estate Market Information System." This ensures transparency and centralized access to information under a unified oversight framework.
✅ Disclosure is a "condition for commencing transactions"
Another point clarified by the Law is that completion of disclosure is a condition for formally selling or leasing real estate. In other words, a real estate transaction conducted without disclosing the required information is not legally permitted and may expose the party to liability for unlawful conduct.
06 - Minimum equity requirement applicable to all developers
The 2023 Law on Real Estate Business establishes a clear minimum equity (owner's capital) requirement for companies conducting business through real estate projects. This measure is intended to ensure the financial soundness of developers and enhance the feasibility of projects.
Specifically, the following standards are established:
For a project with a land use area of less than 20 hectares: owner's equity of at least 20% of total investment must be secured
For a project with a land use area of 20 hectares or more: owner's equity of at least 15% of total investment must be secured
Furthermore, where a single company is simultaneously carrying out multiple real estate projects, it is expressly provided that the above equity requirement must be satisfied individually for each project.
✅ A note on a potentially misleading "strict interpretation" ✅
Some legal commentators take an extremely strict interpretation of this provision, holding that shareholders or capital providers must maintain the project company's equity ratio at 20% at all times, under any circumstances. However, this understanding is considered to lack practical rationality.
This is because, even after a project has been completed and all real estate products have been sold, such an interpretation would still require the equity ratio to be maintained, which could run counter to the original legislative intent.
This provision concerns the "minimum equity required to carry out the project," and is not a matter of "legal capital (charter capital)" that underpins a company's overall creditworthiness. Accordingly, a flexible application based on the literal wording and practical context is called for.
07 - Clarifying real estate business by foreign-invested economic organizations
The 2023 Law on Real Estate Business more clearly defines the rights and scope of real estate business available to economic organizations with foreign investment capital (hereinafter, "foreign-invested economic organizations") than under the previous law.
✅ Business use of land with infrastructure already in place is now formally recognized
Under the new Law, foreign-invested economic organizations are expressly permitted, through real estate projects, to engage in commercial activities such as development, transfer, lease, and sub-lease of land on which infrastructure has already been developed. This gives a legal basis to the practice of foreign investors involved in developing industrial parks and technology zones.
Under the current Law on Real Estate Business (the 2014 version), real estate transactions by foreign-invested companies were limited to "housing and buildings," and there was no explicit provision regarding the transfer or lease of land use rights. In practice, however, a great deal of industrial infrastructure development had already been carried out by foreign investors on the basis of other legislation, such as the Land Law, and this amendment can be understood as something close to a formal confirmation of existing practice. Even so, it carries significant meaning from the standpoint of ensuring legal consistency.
✅ Terminology unified: change to "foreign-invested economic organization"
This amendment also revises terminology, with the term "economic organization with foreign investment capital" now used consistently. This is thought to be a measure to align terminology with the definitions under the 2020 Investment Law.
By contrast, the previous 2014 Law used the term "enterprise with foreign investment capital," whose legal definition was unclear and had been a source of confusion in practice.
08 - Transfers and lease-back of floor area within buildings now formally permitted
Building on the approach taken under the current Land Law, the 2023 Law on Real Estate Business takes a step toward formally recognizing individual transactions in floor area within a building. Provided that certain conditions are met, it becomes possible to transfer, or enter into a lease-back (lease plus buy-back) arrangement for, a portion of a building — that is, a unit of floor area.
As a statutory condition, the building in which the floor area subject to transfer is located must have been constructed on the basis of one of the following types of land use rights:
Land use rights granted by the State for consideration (paid as a lump sum), or
Land leased under an arrangement in which the rent is paid as a lump sum.
While this new provision is expected to make the Law easier to adapt to market practice, the following concerns have also been raised:
The 2023 Law on Real Estate Business has not been sufficiently reconciled with the amended Land Law. Under the new Land Law, cases in which the State leases land on a lump-sum basis are expected to be significantly restricted, and in reality many commercial/service land plots are subject to "annual payment" land lease arrangements. As a result, there is a risk that many development projects will fall outside the scope of the current provision.
That said, the 2023 Law on Real Estate Business also requires that financial obligations relating to land (such as land rent and use fees) be clearly stipulated in the sale contract, and it is possible that the payment method itself (annual or lump-sum) may ultimately not be treated as decisive.
09 - Temporary restrictions on real estate transactions where an administrative violation exists
Under Article 19, Clause 1, Point p of the 2023 Law on Real Estate Business, where a real estate developer has violated the Investment Law, the Construction Law, the Land Law, the Housing Law, the Law on Real Estate Business, or tax legislation and is subject to an administrative penalty, that developer may not enter into a contract for the sale, lease, or lease-back of housing or buildings until the penalty has been fully resolved.
This provision applies to developers found to have committed violations such as the following:
Deficiencies in licensing for investment activities
Violation of construction standards or unlicensed construction
Violation of land use legislation
Breach of obligations relating to a real estate business license
Deficiencies in tax filing or payment
The aim is to prevent real estate that is subject to an ongoing administrative penalty from being placed on the market, thereby safeguarding consumer protection and confidence in the real estate market. In order to resume transactions, the developer concerned must complete all corrective measures required under the administrative penalty and be formally confirmed as having done so.
This system is positioned as a framework that deters wrongdoing while institutionally guaranteeing the transparency and safety of real estate transactions.