Consultancy Services for Acquiring Restaurants and Hotels on State-Leased Land in Vietnam

Our consultancy services for acquiring restaurants and hotels on state-leased land support investors in adhering to legal regulations and mitigating risks associated with transferring assets linked to public land. Given the intricate legal processes and stringent requirements, expert guidance is crucial for investors to secure their interests, thereby optimizing time and costs when taking ownership of potentially lucrative commercial real estate.

Acquisition Strategies for Restaurants and Hotels on State-Leased Land

The acquisition of restaurants and hotels can be executed through various methods, tailored to the investor’s specific needs. Currently, prevalent approaches for restaurant and hotel acquisitions include:

• Acquiring the physical assets of the restaurant or hotel.
• Acquiring the entire capital contribution or all shares of the company that owns the restaurant or hotel.

Asset Acquisition: Restaurants and Hotels

This method involves the investor directly transacting for the tangible assets situated on the land. This approach encompasses the transfer of ownership for the building structures and associated equipment. Asset acquisition must comply with specific conditions regarding registration procedures and asset transfer protocols.

Advantages:

• The investor does not inherit the legal liabilities of the previous owner.
• Full autonomy in renovating and upgrading the physical facilities.
• Complete freedom to establish a new brand identity.

Disadvantages:

• Foreign investors are not permitted to acquire buildings outright for real estate business purposes.
• The land lease procedure with the State must be re-initiated, a potentially time-consuming process.
• New business licenses must be obtained, and conditions for fire prevention, safety, and food hygiene must be met.
• Higher procedural costs and longer timelines.

Asset acquisition involves numerous complex administrative steps. Investors must register the investment project, establish a business entity, sign a transfer contract, complete land lease procedures with the State, obtain a Land Use Rights Certificate, and then fulfill all prescribed business conditions for hotel operations.

Acquisition of Entire Capital Contribution/Shares of the Restaurant/Hotel Owning Company

This strategy involves acquiring ownership of the enterprise by purchasing its shares or capital contribution. According to Article 51 of the Enterprise Law 2020, investors can acquire the entire charter capital of the company currently owning and operating the restaurant or hotel. This method allows for the continuation of all existing business operations and licenses.

Advantages:

• Inheritance of all assets, rights, and obligations of the legal entity owning the hotel.
• No need to redo land lease procedures with the State.
• Existing business licenses remain valid and in effect.
• Simpler and shorter procedural execution.
• Lower implementation costs.

Disadvantages:

• Inheritance of all debts and financial obligations of the enterprise.
• Responsibility for any pre-existing legal issues.
• Potential risks related to undisclosed tax liabilities and debts.

The capital contribution acquisition process typically involves: signing a principle agreement, conducting legal due diligence, registering the capital contribution acquisition with the Department of Planning and Investment, and completing procedures to amend the enterprise registration details. This option is generally considered more favorable due to simpler procedures, the inheritance of legal documents, and lower legal service fees.

Key Considerations for Acquiring Restaurants and Hotels on State-Leased Land in Vietnam

In practice, any form of restaurant or hotel acquisition presents certain challenges that can prolong the implementation period, potentially delaying the investor’s business strategy. Therefore, investors should note the following issues to avoid unnecessary risks:

• Potential land law violations by the current land user and whether the land is subject to State revocation.
• The consensus of all co-owners of the restaurant or hotel.
• Complications in administrative registration procedures during the transaction.
• Changes in legal policies governing restaurant and hotel business operations on leased land.

Land User Violations and State Land Revocation Risks

When acquiring restaurants or hotels on state-leased land, investors may face the risk of land revocation. According to Article 81 of the Land Law 2024, the State has the right to revoke land if the land user violates land laws. Such violations include using land for an improper purpose, failing to fulfill financial obligations, or allowing the land to be abandoned.

In many instances, particularly in prime locations, previous land users may have violated terms of their land lease contracts. Without thorough legal due diligence, investors could bear the consequences of these prior violations.

To mitigate this risk, investors should:

• Thoroughly inspect the legal status of the land use rights.
• Verify the fulfillment of financial obligations to the State.
• Check for any administrative violation records (if any).
• Compare the designated land use purpose with actual business operations.

Lack of Consensus from Co-owners During Sale

If the restaurant or hotel is owned by multiple shareholders or capital-contributing members, a lack of unanimous consent can lead to serious legal disputes. As per Article 52 of the Enterprise Law 2020, capital transfer in a limited liability company with two or more members or a joint-stock company must adhere to specific procedures and conditions.

Risks arise when some co-owners disagree with the transfer or have differing opinions on the value and terms of the transfer. Experience shows many completed transactions are later challenged in court due to a lack of consent from all owners.

To minimize this risk, investors should:

• Carefully review the company’s charter and agreements among shareholders/members.
• Request an official resolution from the Members’ Council/General Meeting of Shareholders regarding the transfer.
• Ensure all relevant parties sign the contract or provide legitimate letters of authorization.
• Notarize and authenticate all related documents.

Obstacles in Administrative Registration Procedures During Acquisition

Acquiring restaurants and hotels on state-leased land requires navigating numerous complex administrative procedures. These can include investment registration, business registration, land lease and land use purpose conversion procedures, registration of land changes, and obtaining conditional business licenses.

Practical difficulties that may arise include:

• Delays in processing procedures at state agencies.
• Multiple requests for supplementary documentation.
• Inconsistent guidance from different agencies.
• Changes in legal regulations during the implementation process.

Changes in Legal and Regulatory Policies for Hospitality Businesses on Leased Land

The restaurant and hotel industry is governed by various legal documents. Changes in these regulations can directly impact business operations post-acquisition. Policy changes may include:

• Adjustments to land lease terms.
• Changes in land lease fees.
• Additional environmental and fire safety requirements.
• Revisions to hotel classification standards.
• Amendments to tax and fee regulations.

Hotel operations must comply with numerous conditions related to security, order, fire prevention and safety, environmental protection, and food safety. These conditions may be subject to increasingly stringent adjustments.

Long Phan Consulting Company’s Consultancy Services for Acquiring Restaurants and Hotels on State-Leased Land

Acquiring restaurants and hotels demands a thorough understanding of specific regulations. Utilizing professional consultancy and support services will help minimize unforeseen risks.

Scope of Consultancy Services for Acquiring Restaurants and Hotels

Long Phan Consulting Company, with its team of experienced investor support specialists, is committed to partnering with clients throughout the entire process of acquiring restaurants and hotels.

Long Phan Consulting Company offers comprehensive support services, including:

• Advising on the most suitable acquisition method based on your specific needs.
• Conducting detailed legal due diligence on the actual condition of the acquired assets.
• Performing legal due diligence on the state-leased land plot, reviewing records, financial obligations, etc.
• Assisting clients in drafting and negotiating sale and purchase agreements for restaurants and hotels.
• Supporting the execution of administrative procedures during the transfer.
• Advising on tax obligations arising from the transaction.
• Assisting in resolving post-acquisition issues.

Service Delivery Process for Acquiring Restaurants and Hotels on Leased Land

Long Phan Consulting Company employs a professional 5-step service delivery process. This ensures that the acquisition of restaurants and hotels on state-leased land proceeds smoothly and in compliance with the law. Each step is executed by highly qualified and experienced professionals.

Step 1: Initial Consultation and Information Gathering

We first receive your request, then analyze your needs and investment objectives to clearly understand your transaction goals. Subsequently, our expert team gathers basic information about the target asset and provides preliminary advice on feasible acquisition options for your initial assessment.

Step 2: Legal Due Diligence of Land, Assets, and Enterprise

We conduct a detailed examination of the legal status of the land and related assets, verifying ownership and the validity of legal documents. Concurrently, financial and tax obligations are thoroughly reviewed, and any disputes or claims are investigated to ensure transparency and mitigate transaction risks.

Step 3: Strategic Advisory and Drafting of Sale and Purchase Agreement

Based on the due diligence results, we propose the optimal acquisition strategy for you, analyze potential legal risks, and suggest appropriate preventive measures. This is followed by drafting the sale and purchase agreement and related legal documents, then negotiating and finalizing the contractual terms to ensure clear rights and obligations for all parties.

Step 4: Support for Transaction Execution and Administrative Procedures in the Sale

We guide you through notarization and authentication procedures as required by law and assist in completing investment registration and business registration procedures if relevant. Additionally, we coordinate support for land use rights transfer procedures and registration of ownership changes with competent authorities.

Step 5: Post-Transaction Support

After the transaction is complete, we continue to partner with you by providing guidance on obtaining necessary business licenses, advising on handling emerging legal issues, assisting in dealings with relevant state agencies, and addressing any queries, as well as updating you on legal changes related to investment and asset ownership.

After-Sales Policy and Customer Care

Long Phan Consulting Company is committed to providing professional after-sales service and customer care following the completion of restaurant and hotel acquisitions. Our after-sales policy is built on the principle of long-term partnership with clients and support in resolving issues arising during business operations.

Long Phan Consulting Company’s after-sales services include:

• Consultation on legal issues arising within the agreed period.
• Assistance in liaising with competent state authorities.
• Updates on relevant legal changes upon client request.
• Advice on legal compliance in business operations.

Addressing Other Requests During Service Provision

Long Phan Consulting Company understands that each acquisition of a restaurant or hotel on state-leased land has unique characteristics. Therefore, we offer services to address and support other client requests throughout the service provision process.

Additional support services include:

• Consultation on tax issues arising during the acquisition process.
• Assistance in negotiations with relevant parties (banks, business partners).
• Advice on organizational structure and post-acquisition management.
• Consultation on developing legal compliance strategies.
• Advice on labor issues post-acquisition.
• Support in handling urgent emerging issues.

Contact Information for Consultancy Services for Acquiring Restaurants and Hotels on State-Leased Land

Clients can contact Long Phan Consulting Company through various convenient channels:

• Consultation Hotline: 1900.63.63.89
• Zalo: 0906.735.386 – Long Phan
• Email: info@longphanpmt.com
• Facebook: Long Phan Investment Consulting and Legal Services Co., Ltd.
• Head Office Address: 17 Street No. 3, Truong Tho Ward, Thu Duc City, Ho Chi Minh City.

Conclusion

Acquiring restaurants and hotels on state-leased land in Vietnam requires a profound understanding of Vietnamese law and practical experience. Long Phan Consulting Company, with its team of dedicated specialists, is ready to partner with you through every stage of the acquisition process, from legal due diligence to post-transaction procedures. Contact us immediately via our hotline: 1900.63.63.89 for detailed consultation and to receive optimal solutions for your transaction.