Answer:

Under the current laws of Vietnam, there has been no restriction on the ratio of shares that a foreign investor may hold in a real estate company. Therefore, you can set up a 100% foreign owned real estate company in Vietnam.

It is provided for in Article 50 of the Law on Investment that foreign investors investing in Vietnam for the first time must have an investment project and perform the procedures for application for an investment certificate; the investment certificate shall also be the business registration certificate. Thus, in order for you to set up a 100% foreign owned real estate company in Vietnam, you must have a specific real estate project.

Pursuant to Article 10 of the Law on Real Estate Business, a foreign investor shall be permitted to conduct real estate business within the following scope:

-          To invest in the creation of houses and buildings for sale, lease out or grant of hire purchase;

-          To invest in upgrading land and to invest in infrastructure works on the leased land in order to lease out land with completed infrastructure.

Under Article 8 of Law on Real Estate Business, any company conducting real estate business must have a legal capital - the minimum amount of capital that is required by laws for a company to be established. Article 3 of Decree 153/2007/ND-CP of the Government dated October 15, 2007 detailing and guiding the implementation of the Law on Real Estate Business sets this legal capital at VND 6(six) billion.

Additionally, subject to each specific real estate project, the investors must also satisfy the condition on their own capital for setting up the project. In particular:

-          For a project on new urban centers and project on technical infrastructure works of industrial parks, their own capital must not be lower than 20% of total investment capital of such project;

-          For a project on residential housing complexes, their own capital must not be lower than 15% of total investment capital of the project occupying less than 20 hectares of land, or must not be lower than 20% of total investment capital of the project occupying 20 hectares or more.

Answer:

According to Decree No.23/2007/ND-CP dated 12 February 2007 of the Government providing regulations for implementation of Commercial Law regarding purchase and sale of goods and activities directly related to the purchase and sale of goods by enterprises with foreign owned capital in Vietnam and commitments of Vietnam when joining WTO, as from 1 January 2009, an investor, who is a legal entity/individual of a country or territory participating in an international treaty of which Vietnam is a member and in such treaty Vietnam has undertaken to open the market on activities of purchase and sale of goods and activities directly related to purchase and sale of goods, may apply for setting up a 100% foreign owned company engaging in distribution activities.

A foreign owned company which has been licensed to conduct distribution activities shall be permitted to exercise distribution activities as follows:

-          To conduct wholesaling, retailing, franchising and agency for trading goods manufactured in Vietnam and goods imported into Vietnam, except for goods in the list of goods not permitted to be distributed;

-          With respect to goods in the list of goods permitted to be distributed pursuant to a schedule, the foreign owned company shall be permitted to conduct wholesaling, retailing, franchising and agency for trading of goods in accordance with the schedule as stipulated.

The foreign owned company which has been licensed for wholesaling only shall not be permitted to directly sell goods to end-users.

The foreign owned company which has been licensed to establish a retail sale outlet shall not be permitted to conduct retailing outside the retail sale outlet which has been licensed. The establishment of retail sale outlets in addition to the first retail sale outlet shall be considered on a case by case basis and shall depend on the number of retail sale outlets, market stability, population density in the province/city where the retail sale outlet is to be set up, and consistency of the investment project with the master plan of such province/city.

Answer:

It is provided for in Item 1, Article 81 of Decree No.181/2004/ND-CP dated October 29, 2004 of the Government on the implementation of the Land Law (“Decree 181”) that “Purchasers of dwelling houses attached to the right to use residential land under investment projects on construction of dwelling houses for sale, which are executed by overseas Vietnamese, foreign organizations or foreigners shall be granted the stable and long ­term land use right certificates”. Therefore, clients who buy dwelling houses in your project shall have the right to use the land with stable and long term use despite the definite term of your land use right.

In case the amount of the lump sum rent paid by you is equal to the amount of land use fee payable as if your land use right had been allocated with collection of land use fee as stipulated in Item 1, Article 32 of Decree 84/2007/ND-CP dated May 25, 2007 of the Government promulgating additional provisions on issuance of land use right certificates, land recovery, exercise of land use rights, order and procedures for compensation, assistance and resettlement when the State recovers land and resolution of complaints about land, you or your clients shall not be required to pay the monetary difference between leased land and stable and long-term land use. Otherwise, according to Item 2, Article 81 of Decree 181, you have to pay to the State the difference between the land use fee and land rent already paid to the State as follows:

-          The land use fee is calculated at the land prices set by the provincial/municipal People's Committees at the time of payment of the difference;

-          For villas, the difference amounts must be paid at the time of selling the houses;

-          For apartments, the difference amounts must be paid at the time of project completion at the latest.