Tightening Conditions for Real Estate Business in Vietnam – Real Estate and Construction
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The Vietnamese Ministry of Construction is holding consultations with organizations, individuals and experts on the draft decree on Vietnamese Real Estate Law.
The notable point is that the draft regulation is stricter than the conditions for real estate business when it is proposed that organizations and individuals must set up companies or cooperatives in the same sector to do real estate business.
As a result, when setting up a real estate company, companies should disclose information including name, registered office address, legal representative, phone number and information relating to real estate set up in the company. on the company web portal, the web portal of the provincial housing authority where the company registers its activity and where real estate is invested in the company.
In the case of being an investor of a real estate project, in addition to the above provisions, the owner’s own funds must be at least 20% of the total investment capital for projects whose occupancy scale of soil is less than 20 hectares. For projects of a scale of 20 hectares or more, this level is 15%.
The draft decree on Vietnamese real estate law
The draft decree also mentions more specifically organizations, households and individuals carrying out small-scale and irregular real estate activities. Accordingly, small real estate business is defined as cases of sale, rental, hire-purchase of houses and construction work, transfer, hire or sublet of land use rights below the area for the construction of houses and works prescribed by the Provincial Committee.
Irregular real estate affairs include cases such as the sale or transfer of houses and construction work due to bankruptcy or dissolution; sale, transfer, hire-purchase of real estate belonging to the State when this is authorized by the competent public bodies; Credit institutions sell or transfer houses, works, projects under guarantee or mortgage to collect the debt.
According to the draft decree, these groups are not required to meet the above conditions but must declare and pay taxes in accordance with the regulations.
In addition, the Ministry of Construction is also collecting opinions for the draft decree sanctioning administrative offenses in the construction field. This draft decree provides a number of new points on fines in real estate matters, construction offenses, remedial measures, and penalties for illegal construction.
This project has increased the level of fine from 1.5 to 2 times compared to the level of fine specified in Decree No.139 / 2017 / ND-CP (Decree 139) stipulating the sanction of administrative offenses in the activities of investment in construction. In particular offenders in the field of construction order and real estate affairs, with fines of up to VND 1 billion.
In addition, the draft decree increases the fine up to VND 800 million for certain acts of real estate activity such as the transfer of all or part of a project without guaranteeing the prescribed requirements or conditions, the handing over of houses and construction works to clients when the investment in housing construction has not been completed, construction works and technical and social infrastructure works according to the schedule indicated in the approved project, connection with the common infrastructure system in the region is not yet secured; illegally mobilize or appropriate capital; using capital raised from organizations or individuals or money advanced from buyers, tenants and tenants to purchase future real estate for improper purposes, as promised.
The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.
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