Process of establishing an FDI real estate business in Vietnam

Establishing an FDI company doing real estate business in Vietnam is the key to a potential business opportunity for you with the real estate market gradually stabilizing and developing strongly. Please follow Long Phan’s following article to be provided with the latest regulations on necessary conditions, forms and procedures, and introduce professional consulting solutions from Long Phan.

Conditions for FDI companies to do real estate business in Vietnam

Article 9 of the Law on Real Estate Business 2023 stipulates specific conditions for FDI enterprises that want to participate in the Vietnamese real estate market. Accordingly, to do real estate business, it is necessary to establish an enterprise according to the provisions of law on enterprises and must meet the following conditions:

• Not during the period of being banned from real estate business activities, suspended, or suspended under a court judgment or decision or decision of a competent state agency;
• Ensuring the ratio of outstanding credit debt and outstanding corporate bonds to equity;
• Real estate businesses through real estate projects must have equity of not less than 20% of total investment capital, and for projects with a land use scale of less than 20 hectares, not less than 15% of total capital. Investment in projects with a land use scale of 20 hectares or more and must ensure the ability to mobilize capital to implement the investment project; In case a real estate business simultaneously implements many projects, it must have enough equity allocated to ensure the above ratio of each project to implement all projects.

In what form can FDI companies do real estate business?

The Law on Real Estate Business 2023 regulates real estate business forms for FDI companies. Article 10 of the Law on Real Estate Business 2023 distinguishes two cases based on meeting foreign investment conditions.

Case 1: Economic organizations with foreign investment capital that must meet the conditions and carry out investment procedures prescribed for foreign investors according to the provisions of the Law on Investment are allowed to do real estate business. Real estate in the following forms:

• Investing in housing construction, construction works associated with land use rights for sale, lease, or lease purchase through real estate projects implemented in accordance with the form, purpose and land use term according to regulations provisions of land law;
• Investing in the construction of technical infrastructure in real estate projects to transfer, lease, or sublease land use rights with technical infrastructure in accordance with the form, purpose, and land use term according to the law regulations of land law;
• Rent houses, construction works, and construction floor areas in construction projects for sublease;
• Receive the transfer of all or part of a real estate project to continue investing in construction and business.

Case 2: If an economic organization with foreign investment capital does not belong to case 1, it is allowed to do real estate business in the following forms:

• Investing in housing construction, construction projects for sale, lease, or lease purchase;
• Investing in the construction of technical infrastructure in real estate projects to transfer, lease, or sublease land use rights that already have technical infrastructure;
• Buy, rent-purchase houses, construction projects, construction floor areas in construction projects for sale, lease, lease-purchase;
• Receive transfer of land use rights with technical infrastructure in real estate projects for transfer or lease;
• Renting houses, construction works, and construction floor areas in construction projects for sublease;
• Rent land use rights with technical infrastructure in real estate projects for sublease;
• Receive transfer of all or part of a real estate project to continue investing in construction and business.

Procedures for establishing an FDI real estate company in Vietnam

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Procedures for establishing an FDI real estate company in Vietnam include two main stages: applying for an Investment Registration Certificate and registering to establish a business.

Documents needed to prepare for each stage are as follows:

Stage 1: Apply for an Investment Registration Certificate

Pursuant to Clause 1, Article 33 of the Law on Investment 2020, the application file for an Investment Registration Certificate includes:

• Document requesting implementation of investment project;
• Documents on the investor’s legal status;
• Documents proving the investor’s financial capacity;
• Proposing investment projects;
• In cases where the law on construction stipulates the preparation of a pre-feasibility study report, the investor may submit a pre-feasibility study report instead of the investment project proposal;
• In case the investment project does not request the State to allocate land, lease land, or allow a change of land use purpose, submit a copy of land use rights documents or other documents determining the right to use the location for implementation current investment project;
• Content explaining the technology used in investment projects for projects subject to appraisal and consultation on technology according to the provisions of law on technology transfer;
• BCC contract for investment projects in the form of BCC contract;
• Other documents related to the investment project, conditions and capacity requirements of the investor according to the provisions of law (if any).

Stage 2: Register to establish a business

After being granted the Investment Registration Certificate, the investor prepares business establishment registration documents, including:

• Application for business registration;
• Company charter;
• List of company members (for LLCs with two or more members, Partnerships), list of shareholders (for Joint Stock Companies);
• Copies of legal documents of individuals and organizations contributing capital to establish the company;
• Copy of Investment Certificate;
• Copy of legal documents of the legal representative.

Implementation steps

The process of establishing an FDI real estate company in Vietnam is carried out according to the following steps:

Step 1: The investor applies for an Investment Registration Certificate and submits the application to the Department of Planning and Investment. In case the investment project is implemented in 02 or more provincial administrative units, the investor submits documents to the Department of Planning and Investment of a province or centrally run city where the investor implements the project. Investing, placing or planning to locate an executive office.

Step 2: Register to establish a business

• After being granted an Investment Registration Certificate, the investor submits an application to register a business at the Business Registration Office under the Department of Planning and Investment where the company is headquartered.
• Within 03 working days from the date of receiving complete documents, the Business Registration Office reviews the validity of the documents and issues a Business Registration Certificate.

Consulting services and guidance on establishing FDI real estate companies in Long Phan

With a team of experts with extensive experience in the field of consulting on establishing FDI real estate companies in Vietnam. Long Phan is ready to support customers in shortening time, optimizing costs and ensuring full compliance with legal regulations when performing this procedure. Long Phan’s consulting and support services include:

• Consulting on real estate business conditions for foreign investors.
• Consulting on real estate business forms for foreign investors.
• Support in preparing documents to apply for Investment Registration Certificate.
• Consulting on procedures for registering to establish FDI enterprises.
• Support in carrying out post-establishment registration procedures (seal registration, bank account opening, tax registration).
• Consulting on legal compliance in real estate business activities.

Establishing an FDI real estate company in Vietnam opens up golden opportunities to access a rapidly growing market. This is an important first step for your first journey. Therefore, please contact Long Phan immediately via hotline 0906735386 to receive detailed advice and launch your real estate investment project.