Can Overseas Vietnamese Establish Real Estate Intermediary Enterprises?

Overseas Vietnamese establish real estate intermediary enterprises is a legal question of interest to many investors in the context of increasing demand to participate in the real estate market in Vietnam. The following article by Long Phan Consulting Company will specifically analyze current legal regulations to clarify rights, conditions, and legal notes for Overseas Vietnamese when establishing real estate intermediary enterprises in Vietnam.

Types of real estate intermediaries

According to Clause 2, Article 3 of the Law on Real Estate Business 2023, real estate service business includes the following services:

1. Real Estate Trading Floor.
2. Real Estate Brokerage.
3. Real Estate Consultancy.
4. Real Estate Management.

These services play a role as direct support links for the process of transferring, leasing, and operating commercial real estate. Apart from these services, current laws do not recognize other forms of intermediaries participating directly in the process of establishing and executing real estate transactions if they do not fall into one of the types prescribed in Clause 2, Article 3 of the Law on Real Estate Business 2023.

Therefore, any intermediary activity in the real estate sector wishing to be considered legal must be organized and operated under one of the above service types and fully meet business conditions according to specialized laws.

>>> See more: What Conditions Must Overseas Vietnamese Meet When Conducting Real Estate Business?

Conditions for organizations and individuals when engaging in real estate intermediary services

According to Article 9 of the Law on Real Estate Business 2023, organizations and individuals must establish an enterprise according to the Law on Enterprises or a cooperative/union of cooperatives according to the Law on Cooperatives, except for two cases:

1. Individuals doing small-scale real estate business (must declare tax).
2. Organizations/individuals selling/leasing housing/construction works not for business purposes or below the small-scale level (must declare tax; individuals selling/leasing-purchasing must notarize/authenticate contracts).

Additionally, real estate enterprises must meet the following conditions:

• Not legally banned/suspended from real estate business operations.
• Ensure credit debt and corporate bond debt ratios over equity.
• For project-based business: Equity must be ≥20% of total investment (projects <20 ha) or ≥15% (projects ≥20 ha); ensure capital mobilization capacity; allocate sufficient equity if implementing multiple projects.

Can overseas Vietnamese establish real estate intermediary enterprises?

From the analysis of real estate intermediary service types and business conditions above, it can be affirmed that the law does not prohibit Overseas Vietnamese from establishing real estate intermediary enterprises in Vietnam. However, being allowed or not depends on the legal status of the Overseas Vietnamese and meeting market access conditions under investment, enterprise, and real estate business laws.

Based on Clause 1, Article 17 of the Law on Enterprises 2020, individuals and organizations, regardless of nationality, have the right to establish and manage enterprises in Vietnam, unless prohibited by law. Therefore, Overseas Vietnamese, in principle, have the right to establish real estate intermediary service enterprises.

• Overseas Vietnamese holding Vietnamese nationality: They are considered domestic investors. Establishing a real estate intermediary enterprise is similar to domestic citizens; they do not have to perform procedures for granting an Investment Registration Certificate. They only need to meet the general conditions of the Law on Real Estate Business 2023.
• Overseas Vietnamese holding foreign nationality: They are identified as foreign investors under the Law on Investment 2020. Besides meeting real estate service business conditions, they must comply with market access conditions for foreign investors. specifically, they must apply for an Investment Registration Certificate under Article 36 of the Law on Investment 2020 before registering the enterprise. The ability to do business in services like brokerage, trading floors, consultancy, or management also depends on whether that industry is on the list of restricted market access, as well as capital ownership ratio conditions.

>>> See more: Overseas Vietnamese Land Investment: A Guide

Real estate brokerage consulting services at Long Phan Consulting Company

Long Phan Consulting Company provides comprehensive legal solutions for investors in the real estate sector, ensuring the safety and efficiency of capital flows. Our team of experts has a thorough understanding of regulations regarding real estate investment and business in Vietnam. We accompany our clients from the initial idea stage to the stable operation of their businesses. Below are the specific services that clients will receive when using Long Phan’s legal consulting services:

• Providing ongoing advice on corporate legal matters, drafting and reviewing real estate service contracts.
• Providing consulting services for corporate restructuring and mergers and acquisitions (M&A) of real estate service businesses.
• Providing advice on business conditions and professional requirements for real estate brokerage; assisting with procedures for issuing, renewing, and managing real estate brokerage licenses in accordance with the law.
• Authorized representatives handle administrative procedures and liaise with government agencies.

Frequently Asked Questions

Below are some frequently asked questions about establishing a real estate brokerage business; please refer to them:

For overseas Vietnamese holding dual citizenship (Vietnamese and foreign), which status should they choose to establish a business more easily?

Overseas Vietnamese holding dual citizenship have the right to choose to apply for investment conditions and administrative procedures as domestic or foreign investors. If they choose to use their Vietnamese citizenship (using a Vietnamese passport or citizen identification card), individuals will not have to apply for an Investment Registration Certificate (IRC) and will not be subject to market access restrictions applied to foreign investors, making the business establishment process faster and simpler.

(Legal basis: Clause 2, Article 5 of the 2020 Investment Law.)

Can overseas Vietnamese work as independent brokers without establishing a business?

No. The 2023 Real Estate Business Law stipulates that individuals practicing real estate brokerage must possess a professional certificate and must operate within a real estate exchange service business or a real estate brokerage service business. This regulation ends the freelance brokerage model in order to enhance transparency and accountability in transactions.

(Legal basis: Clause 2, Article 61 of the 2023 Law on Real Estate Business.)

Can overseas Vietnamese investors contribute capital or purchase shares in established real estate intermediary businesses?

Yes. Instead of establishing a new legal entity, overseas Vietnamese holding foreign citizenship have the right to contribute capital, purchase shares, or acquire equity in existing economic organizations in Vietnam that are engaged in real estate services. If the foreign investor’s ownership stake exceeds 50% or falls under the category of investment in conditional business sectors, the investor must register the capital contribution, share purchase, or equity acquisition with the investment registration authority before changing members/shareholders.

(Legal basis: Articles 24, 25, and 26 of the 2020 Investment Law.)

What are the physical infrastructure requirements for businesses providing real estate brokerage services?

Businesses operating real estate brokerage services must have a stable name and address, and technical facilities that meet operational requirements. Specifically, the brokerage office must have a suitable area for brokerage, trading, and information disclosure; technical equipment must ensure the listing, searching, and storage of real estate information. The brokerage office cannot operate entirely virtually but must have a physical location for government agencies and customers to contact.

(Legal basis: Clause 4, Article 55 of the 2023 Law on Real Estate Business.)

Is it mandatory for the legal representative of a real estate intermediary business to be a Vietnamese citizen?

Not mandatory. The legal representative of the business can be a foreigner or a Vietnamese expatriate holding foreign citizenship. However, the business must tell guarantee. There must always be at least one legal representative residing in Vietnam. If the sole representative leaves Vietnam, they must authorize another person in writing to exercise their rights and obligations.

(Legal basis: Article 12 of the 2020 Enterprise Law.)

>>> See more: Online Temporary Residence for Overseas Vietnamese

Conclusion

Establishing a real estate intermediary enterprise for Overseas Vietnamese is fully feasible and legally protected when complying with the Law on Investment and Law on Real Estate Business 2023.

Clients needing in-depth advice on licensing procedures, capital structure, and establishment dossiers, please contact Long Phan Consulting Company via Hotline 1900636389 for optimal solutions from our expert team.