Which Form of Investment - Branch or Company?

Foreign entities can set-up branch offices or set-up company in Vietnam to carry out business activities.

 

There are several main different aspects between opening a branch office or establishing a foreign owned company in Vietnam.

Conditions

Permits for establishment of Vietnam-based branches of foreign enterprise shall each have a valid term of five years.

Foreign enterprise must choose between establishing a 100% foreign capital enterprise or forming a joint-venture with domestic investor or company.

Certificate

The Branch office needs to apply and obtain the operation license of a Branch;

A foreign owned company will need to apply and obtain the investment certificate (“IC”) to operate in Vietnam.

Capital

Optional, foreign entity will decide how much money to invest in branch. The allocation capital for branch is capital for the subordinate units.

Mandatory, foreign entity will need to provide minimum capital as required by Vietnam Law in conditional investment area.

Obligation of owner

For branch office in Vietnam, owner takes full responsibility;

For company, owner takes responsibility within the capital contributed into the company in Vietnam;

Other matters

For branch office setting up in Vietnam, the procedure is less complicated compared to those for the establishment of a 100% foreign owned company;  the branch office is able to carry out trading and some other activities as stipulated by Vietnam laws and the WTO commitments which Vietnam enters. The business lines of a branch have to be aligned with the business lines of the headquarter of the foreign entity.

Setting up foreign owned company would be more complicated than the setting up of the branch office, however this form of investment has more flexibility and freedom as it is an independence Vietnam entity recognized under Vietnam laws

We are a law firm in Vietnam with international standard, local expertise and strong international network. We focus on customers’ needs and provide clients with a high quality legal advice and services. For advice or services request, please contact us via email ant@antlawyers.vn, or call us +84 24 730 86 529.

 

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Da Nang strengthens external relations, promotes investment attraction and international cooperation

On October 30th, 2020, representatives of Da Nang city received the delegation of the Ministry of Foreign Affairs to work, exchange and provide information on the coordination between the Ministry of Foreign Affairs and the city in the implementation of international cooperation program.

 

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Despite being affected by the COVID-19 epidemic, Da Nang still strives to implement important investment promotion activities such as: Economic promotion seminar, tourism, human resources within the framework of the visiting Vietnam and Danang of the Secretary General of the Liberal Democratic Party of Japan (January 11th to 14th, 2020), organized an online investment promotion conference “Danang – Silicon Valley of Southeast Asia”, contribute ideas and develop local implementation plans for free trade agreements that Vietnam has signed such as: Free Trade Agreement between Vietnam and the European Union, on the draft “White Book 2020” at the request of the European Business Association in Vietnam (EuroCham).

Up to now, Da Nang has established friendly and cooperative relations with 45 localities of 20 countries and territories, with 94 Cooperation Agreements were signed. Specific cooperation programs are effectively maintained and implemented, coupled with the promotion of new cooperation programs.

With its convenient location, abundant, high-quality human resources, and many development policies to attract the international investment, in the first 9 months of 2020, the city has attracted USD 140,88 million, of which, there are 66 newly licensed FDI projects with a total registered investment capital of USD 121.78 million, with 9 projects increasing capital with total additional capital is USD 15,038 million. Accumulated to date, Da Nang has 869 FDI projects with a total investment of USD 3.518 billion.

By creating opportunities for international investors in the fields of high technology, environmental protection, tourism services, etc. Danang has all the strengths from nature to people to be the first choice of international investors. Many large investors in the region and the world have chosen Danang as their investment development place when expanding their investment activities in Vietnam, especially when many investors have gradually moved their factory out of China. Danang promises to be a good destination for major investors in the world, to set up company and factory, and help them achieve the favourable benefits when investing in Vietnam.

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Da Nang cooperates with the Netherlands in the field of high-tech agriculture

On November 18, 2020, representatives of Da Nang city and experts, Dutch farming enterprises organize an online seminar “Promotion and cooperation of high-tech agriculture in Da Nang- Netherlands” to develop hi-tech agricultural cooperation relations between the two countries.

 

The Netherlands is a country with developed agriculture and high technology application in Europe and is also a country that is known to apply technologies to cope with the impacts of climate change on agriculture. Similarly, Vietnam is also an agricultural country affected by climate change, but Vietnam’s agriculture has not had the conditions to apply high technology to improve the quality of agriculture.

Currently, the high-tech agriculture is a priority for Da Nang to thrive in order to meet the needs of use and export to many countries around the world. The creation of quality and safety products is the city’s top goal. At present, Da Nang is concentrating on solutions, promulgating supportive and encouraging policies to attract investment to set up company in the field of hi-tech agriculture, completing the detailed planning of 3 agricultural regions which applying high technology. Although the land reserve for agricultural production is limited, the city always gives priority to the development of hi-tech agriculture.

Not only investing in production, planning and application of high-tech science, Da Nang hopes to receive Dutch help in choosing applied technology, export standards as well as how to use the agricultural land effectively, avoid wasting resources. In addition, attracting Dutch investors with financial ability and business experience in the field of high-tech agriculture will help Da Nang learn how to manage effectively and meet demand of the city and providing food for millions of visitors to Da Nang each year. Besides, in the future, Da Nang hopes to combine high-tech agriculture and tourism to create the highest economic efficiency for the city.

With its efforts, Da Nang hopes that in the future there will be more Dutch investors investing in the city through setting up company in Da Nang, Vietnam or cooperate with local company in the field of high-tech agriculture, thereby bringing the highest economic efficiency to the investors and the city.

We are a law firm in Vietnam with international standard, local expertise and strong international network. We focus on customers’ needs and provide clients with a high quality legal advice and services. For advice or services request, please contact us via email ant@antlawyers.vn, or call us +84 24 730 86 529

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Apply the Safeguard Measures on DAP and MAP fertilizer

DAP and MAP is complex inorganic fertilizers, with main component of nitrogen and phosphorus,  whose function of lining, dressing crops and production of NPK fertilizer.

On March 31st, 2017, Ministry of Industry and Trade (MOIT) received Dossier requesting to apply the safeguard measures on DAP and MAP fertilizer. Requesting Party is DAP Vinachem Joint Stock Company and DAP No 2 -Vinachem Joint Stock Company. 

Anti-dumping-Lawyers-in-VietnamOn April 13th, 2017, Trade Remedies Authority of Vietnam (Investigating Body) received Dossier requesting to apply globally the safeguard measures on DAP and MAP fertilizer.

On May 12th, 2017, based on Dossier requesting to apply the safeguard measures of domestic industry, regulations of World Trade Organization (WTO) and Vietnamese Law, the Ministry of Industry and Trade (MOIT) promulgated Decision No. 1682A/QD-BCT on initiation of investigation to apply globally the safeguard measures on DAP and MAP fertilizer imported into Vietnam.

Based on conclusion from preliminary investigation showing that imported goods caused significant damage to domestic industry, MOIT promulgated Decision No. issued Decision No. 3044/QD-BCT on August 04th, 2017 on applying temporary safeguard measures on goods with HS codes as follows: 3105.10.20; 3105.10.90; 3105.20.00; 3105.30.00; 3105.40.00; 3105.51.00; 3105.59.00; 3105.90.00 with temporary tax of VNĐ1,855,790 per/ton. Temporary safeguard measures shall from August 19, 2017 to March 6, 2018.

In the final investigation phase, Investigating Body held consultations with the relevant parties, assessed socio-economic impacts of temporary safeguard measures, updated data and consulted Ministries, agencies.

The final investigation conclusion showed that the amount of imported DAP and MAP fertilizers had increased both absolutely and relatively during the investigation phase. The conclusion also showed that the imported DAP and MAP fertilizers caused price pressures and price hikes on domestic goods during 2013-16 period. Phenomenon of price pressures, price hikes continues to take place in 2017 so the selling price of domestically produced fertilizer is still lower than the production cost. Domestic fertilizer production industry suffer on all aspects such as significant reduction of quantity and sales.

Accordingly, there was increase of imported goods having impact on prices. One of the three conditions is met to apply the safeguard measures according to regulations of WTO and Vietnammese law (Three conditions are: having impact on quantity and prices of imported goods; domestic industry was significantly damaged; There is causality between the increase of imported goods and the damage of domestic industry).

On November 10th, 2017, Minister of Industry and Trade promulgated Decision No. 4236/QD-BCT on extending the deadline for investigating cases of applying safeguard measures on DAP and MAP fertilizers imported into Vietnam fertilizers for more two months before issuing the final Report. This extension is necessary to gather more information relating to the case, to consider thoroughly relevant parties’ opinion, to assess comprehensively socio-economic impact

On March 02nd, 2018, Minister of Industry and Trade promulgated Decision No. 686/QD-BCT on applying official safeguard measures on DAP and MAP fertilizer imported into Vietnam (case number SG06).

On March 21st, 2018, Investigating Body posted a notice of Implementation Guide of exemption from applying the safeguard measure.

On October 12th, 2018, Investigating Body posted a notice to receive the dossier requesting for exemption from application safeguard measure.

On May 31st, 2019, Investigating Body posted a public notice to receive the dossier requesting for final review.

On July 02nd, 2019, Investigating Body received Dossier requesting for final review from DAP Vinachem Company and DAP No 2 -Vinachem Company.

On July 10th, 2019, Investigating Body issued official dispatch on requiring the Requesting Party to supplement some relevant information.

On August 02nd, 2019, Investigating Body received dossier of supplementation information at request.

On August 13th, 2019, Investigating Body confirmed that the dossier is complete, valid in accordance with regulations of requirement of final review of safeguard measure on imported DAP and MAP fertilizer.

On September 03rd, 2019, MOIT promulgated Decision No. 2700/QD-BCT on final review of the safeguard measures on imported DAP and MAP fertilizer.

On September 18th, 2019, Investigating Body issued official dispatch no. 817/PVTM-P2 on sending final-review questionnaire of the safeguard measures on imported DAP and MAP fertilizer (ER01.SG06) to domestic production company, company importing DAP and MAP fertilizer. 

On January 13th, 2020, Investigating Body held consultations with the relevant parties to present opinion relating to the case.

On February 24th, 2020, Investigating Body completed the Conclusion of final review of safeguard measure on imported DAP and MAP fertilizer.

On March 03rd, 2020, MOIT promulgated Decision No. 715/QĐ-BCT on extending the application the safeguard measures on imported DAP and MAP fertilizers. Specifically, the applicable tax rates are as follows: from 7/3/2020-6/3/2021 safeguard rates is 1.050.662 dong/ton; from 7/3/2021-6/3/2022 is 1.029.219 dong/ton; from 7/3/2022-6/9/2022 is 1.007.778 dong/ton; from 7/9/2022 onwards is 0 dong/ton.

Based on results of review, MOIT determines the extension of appling the safeguard measures on imported DAP and MAP fertilizers is necessary to continue to prevent damage of domestic industry and to ensure the efficiency of measures, helping domestic industry to have more time to justify.

On March 13th, 2020, Investigating Body posted a noticae to receive the Dossier requesting for exemption from application safeguard measure on DAP/MAP fertilizers in 2020. Enterprise shall submit the Dossier requesting for exemption at public service Portal by website  https://dichvucong.moit.gov.vn or send directly to Trade Remedies Authority of Vietnam before 5pm on April 13th, 2020.

ANT Lawyers – A Law firm in Vietnam has law offices in Hanoi, Ho Chi Minh City and Da Nang.  The lawyers at each law offices in Vietnam have consistently made valuable and important contributions to our profession through the cases we handled on daily basis to facilitate business transaction or represented our clients to access justice.

 

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What are Conditions for Cancellation of Contract?

When entering into a contract, the parties in a contractual relationship always aim for certain interests and purposes. However, in reality, the contract is not always implemented seriously and in good faith. According to Vietnam laws, parties are entitled to cancel the contract to protect rights and interests. Therefore, it is not rare for a party to request to cancel the contract in order not to be bound by the contract. However, it should be noted that the right of cancellation is only applied in some certain circumstances which stipulated by the law. This is to limit arbitrariness of cancelling the contract.

 

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The basic condition for cancelling the contract is the breach. However, it should be noted that not all breaches of contract will result in cancelling the ccontract. This is stipulated in both of general law and specialized law. According to Commercial law 2005 (“CL”), the sanction of cancelling the contract is applied in case of breaching act be a condition for the cancellation of the contract as agreed upon by the parties or in case of substantial breach of contractual obligations from a party. Specifically, contractual breach means the failure of a party to perform, to fully or properly perform its obligations according to the agreement between the parties or the provisions of CL. Substantial breach means a contractual breach by a party, which causes damage to the other party to an extent that the other party cannot achieve the purpose of the entry into the contract. Civil Code 2015 (“CC”) also stipulates correspondingly but it uses the term “serious breach”: “A party has the right to cancel the contract and shall not be liable to compensate for damage in the following cases: (i) A breaching act of one party is a condition for the cancellation of the contract as agreed upon by the parties; (ii) The other party seriously violates the obligations in the contract; (iii) Others circumstances as provided by law. Serious violation means the failure to fulfill obligations properly by a party which make the other party cannot achieve the purpose of the entry into the contract”. However, currently there is no specific guidance on identifying the substantial breach of contractual obligations and the serious breach of contractual obligations. Therefore, determining whether a party’s breach is considered as a substantial breach of contractual obligations or a serious breach of contractual obligations will be within the competence of the jurisdiction.

A lawfully concluded contract may be canceld when a party breaches its basic contractual obligations. After cancelling the contract, such contract shall be invalid from the time it is entered into, and the parties shall not have to continue performing their contractual obligations, except for their agreements on their post-cancellation rights and obligations and resolution of disputes. The parties shall have the right to claim benefits brought about their performance of their contractual obligations. If parties have indemnity obligations, their obligations must be performed concurrently. Where it is impossible to make the indemnity with benefits which one party has enjoyed, the obliged party must make the indemnity in cash. Breached parties are entitled to claim damages.

In conclusion, from the regulation of law, it can be seen that nature of contract is to benefit for the parties and not to be canceld. The cancellation is very serious so the contract can only be canceld in some certain conditions. The contract cannot be canceld as a sanction if there is no contract breach. Simultaneously, the party requesting cancellation also needs to know that such request is only accepted if there is enough foundation to affirm that the other party has substantial breach of contractual obligations or the serious breach of contractual obligations.  Parties encountering potential dispute should consult with dispute lawyers in Vietnam for proper resolution.

ANT Lawyers – A Law firm in Vietnam has law offices in Hanoi, Ho Chi Minh City and Da Nang.  The lawyers at each law offices in Vietnam have consistently made valuable and important contributions to our profession through the cases we handled on daily basis to facilitate business transaction or represented our clients to access justice

 

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Benefits of Investors in Setting up a Business in Da Nang

Da Nang is one of the five major cities in Vietnam, having a geographical location that is particularly conducive to rapid and sustainable economic development. Da Nang has important transportation routes such as the China-ASEAN international railway crossings, seaports and international airports.

 

Da Nang is one of the tourist centers of the country, has rich tourism potential including natural tourism resources and humanities. Da Nang has many famous scenic spots such as Hai Van pass, Son Tra mountain, Ba Na hills, Ngu Hanh Son, Cham Museum or My Khe beach have been voted by Forbes magazine as one of the six most beautiful beaches in the world. These conditions are favorable for the development of diversified forms of tourism such as travel, research, cultural.

Da Nang have infrastructure development, four types of roads are popular: high way, rail way, International airport and International sea way. Da Nang have the sea lanes to most major ports in Vietnam and around the world. It helps investor more convenient to travel everywhere in Vietnam and other countries. Moreover, Da Nang’s water supply, electricity supply and communication system has developed rapidly and is increasingly modernized, ranking third in the whole country after Hanoi and Ho Chi Minh City. Da Nang have Da Nang Port, which help investor in import/export activities easily.

The first advantage of the policy mechanism is that Da Nang has also had great support the mechanism and policies for socio-economic development of Da Nang. Since Da Nang was recognized as a national grade I city in 2003, Da Nang has implemented guidelines, regulatory directions and the issuance of specific regulatory mechanisms. With the support from the Central Government, Da Nang authorities have also developed appropriate policies and mechanisms to facilitate the development of the economy, such as the one-stop-shopping mechanism, so Da Nang which is considered as a locality with attracting investment policies in Vietnam. Examples: Procedures related to investment, investment locations, clearance and handover plan, the granting of business registration certificates and investment preference certificates shall be carried out under the one-stop-shopping mechanism at the provincial municipal all of them are resolved at Da Nang Administration Center. Investors shall be exempt from all expenses related to the settlement of investment procedures apart from the payment of business registration fees according to the provisions of law. When investing in Da Nang, investors not only enjoy many preferential policy from city government but also have chance to find clients from many countries or compete with other companies in Vietnam and foreign countries.

Tradition of unity, consensus of people and the dynamism and creativity of the leadership, these advantages has aroused, mobilized the strength, the most important and decisive resource for the development of Da Nang. The determination of leaders, city authorities in building programs, projects with the support of the people, investors, enterprises, ect that help investors who will invest in Da Nang have highest benefits.

ANT Lawyers – A Law firm in Vietnam has law offices in Hanoi, Ho Chi Minh City and Da Nang.  The lawyers at each law offices in Vietnam have consistently made valuable and important contributions to our profession through the cases we handled on daily basis to facilitate business transaction or represented our clients to access justice.

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Vision to develop logistics services in Da Nang

Da Nang, with its favorable geographical location, lies on the arterial North-South traffic axis in terms of road, rail, sea and air, is an important traffic gateway of the Central – Central Highlands and is the end point on the East-West Economic Corridor running through Vietnam – Laos – Myanmar – Thailand, converging types of transport from air, seaport, railway, expressway, especially with deep water ports. Therefore, Da Nang has a great potential to develop into a maritime transport center, an important logistics hub to countries in the region.

 

In the economic development orientation and in the Politburo’s Resolution No. 43-NQ/TW dated January 24, 2019 on Da Nang construction and development to 2030, a vision to 2045 defines: Danang will focus on exploiting advantages to soon become a marine economic center, forming logistics service supply chains for the Central and Central Highlands.

To comply with the Resolution, currently, in parallel with the expansion of the port, Da Nang is also actively calling for investment in logistics centers. Of which, 20 hectares in Hoa Vang district, 2 hectares in the north of Da Nang airport, 9.1 hectares in the High-Tech Park. At the same time, promote the early operation of highways Da Nang – Quang Ngai, La Son – Tuy Loan… to awaken potentials, promote trade links, connect industrial zones, economic zones in the region, thereby becoming the driving force to promote the city’s logistics services industry.

In addition, Da Nang will build a new Lien Chieu port as a transport port, Tien Sa port will be a tourist port in order to promote the central role of the international seaport city and urban seaport. According to the Department of Planning and Investment of the city, the Lien Chieu port project is currently completing the environmental impact assessment report, submitting for appraisal and approval of the subdivision planning project 1/2,000. City leaders suggested early appraisal of capital sources and capital balancing capabilities, and proposed to allocate central budget capital to support projects. In the next phases, Lien Chieu port will attract investors in logistics items. This is an important premise for Da Nang to promote the role of a key maritime route in the Central region and a logistics center in the region.

With the above orientation, it is expected that in the coming time, the market of transport services and logistics in the city will develop more vibrantly, raising the quality of services not only in the city but in the region. It is hoped that more companies will invest, set up company and apply for investment certificate in Da Nang in the area of logistics and logistics support.

ANT Lawyers – A Law firm in Vietnam has law offices in Hanoi, Ho Chi Minh City and Da Nang.  The lawyers at each law offices in Vietnam have consistently made valuable and important contributions to our profession through the cases we handled on daily basis to facilitate business transaction or represented our clients to access justice.

 

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Note on Setting up a Representative Office in Vietnam

Setting up a representative office is considered one of the simplest forms of investment in Vietnam.

 

The representative office will help the foreign trader to lease office, hire people, open bank account, and promote the business activities in Vietnam market. The chief representative if being foreigner will then could apply for work permit and temporary residence card to stay in Vietnam.  There is no income tax as the representative office therefore the liability to maintain a representative office is less hassle.  When the purpose of setting up representative office in Vietnam has been achieved, the closing down of the business shall be not as challenging as closing down a company.

According to Vietnam laws, representative office is a dependent unit, representing the foreign entity’s interests in Vietnam. Representative office is established by foreign entities to help them liaise, implement research activities, provide information and support them in seeking new partners as well as having understanding of the new market.

The foreign entity has to meet certain conditions before setting up representative office in Vietnam. It has rights and duties in accordance with Vietnam laws.

When preparing the application for license of representative office in Vietnam, the foreign entities have to note the following.

Prepare the application forms

The application forms as issued by Ministry of Industry and Trade. The application must be signed by legal representative of the foreign entity;

Notarize, legalize and authenticate documents

The foreign entity has to prepare and provide business registration certificate, audited financial report, charter, and office lease memorandum of understanding, passport of the legal representatives of the Representative Office in Vietnam. The documents issued in foreign countries have to be notarized, legalized and authenticated (apostille procedures) in accordance with Vietnam laws to be used in Vietnam. If the business registration certificate or alternative documents have expiry date for business entity’s operation, the remaining time must be at least one year;

Who should be the chief representative?

The Chief Representative of the Representative Office in Vietnam must be different from the Director of the foreign entity.

How long does it take?

It would take around 20 business days since application until receiving the business operation registration of representative office.

ANT Lawyers – A Law firm in Vietnam has law offices in Hanoi, Ho Chi Minh City and Da Nang.  The lawyers at each law offices in Vietnam have consistently made valuable and important contributions to our profession through the cases we handled on daily basis to facilitate business transaction or represented our clients to access justice.

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What Procedures for Conciliation and Settlement of Land Dispute?

Land dispute is one of the most complicated problems which arises regularly in daily life in Vietnam. Land dispute is very diverse, which may be dispute over land use right, ownership of house attached to land use right related to inheritance, divorce, transfer and transformation transaction, leasing, sub-leasing, mortgage, etc.

 

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What is land dispute?

Land dispute means a dispute over the rights and obligations of land users among two or more parties in a land relationship.

In case of conflict over land, what should parties do to settle dispute? Land dispute can be settled in two resolutions, in court or settlement procedures at state administrative agencies.

Firstly, no matter what resolution parties choose, conciliation procedure at commune-level People’s Committee of the locality where the disputed land is located is mandatory condition and procedure. In particular, if conciliation by parties can not be achieved, the parties may send a petition for conciliation to the commune-level People’s Committee of the locality where the disputed land is located. The conciliation procedure carried out at the commune-level People’s Committees shall be completed within 45 days from the date which the commune-level People’s Committees receives a petition for settlement of land dispute. The conciliation may take place only when all the disputing parties are present. If any of the disputing parties is absent for the second time, the conciliation shall be regarded as unsuccessful.

If the conciliation at a commune-level People’s Committee fails, land dispute shall be settled according to one of the following two cases. Firstly, the land dispute in which the party possesses a certificate or any of the papers prescribed in Article 100 of Land law and the dispute over assets attached to land shall be settled by the People’s Court. Secondly, regarding the land dispute in which the party does not possess above papers, the parties may choose between the following two options of settlement: filing a written request for dispute settlement with a competent People’s Committee or filing a lawsuit with a competent People’s Court in accordance with the law on civil procedures.

Regarding the second case, when the party choose to settle at competent People’s Committee, the chairperson of the district-level People Committee is responsible for the settlement of disputes among households, individuals and communities. If the parties disagree with the settlement decision, they are entitled to claim with the chairperson of the provincial-level People’s Committee or to file a lawsuit at a People’s Court in accordance with the law on administrative procedures.

In case one party is an organization, a religious institution, an overseas Vietnamese or a foreign-invested enterprise, the chairperson of the provincial-level People’s Committee is responsible for the settlement. If the parties disagree with the settlement decision, they are entitled to file claim with the Minister of Natural Resources and Environment or to file a lawsuit with a People’s Court in accordance with the law on administrative procedures. It should be noted that the legally effective decision on dispute settlement must be strictly abided by the parties. If the parties fail to comply, the decision shall be enforced.

The settlement of land disputes in which the disputing parties have no certificate or any of the papers prescribed in Article 100 of the Land Law and Article 18 of Decree 43/2014/ND-CP detailing a number of articles of the land law shall be based on the following grounds: Evidences on the origin and use process of the land presented by the disputing parties; Actual land areas currently used by the parties in addition to the disputed land area and the average land area per household member in the locality; Conformity of the current use status of the disputed land with land use plans already approved by competent state agencies; Preferential treatment policies toward persons with meritorious services to the State; Regulations on land allocation, land lease and land use rights recognition.

It is suggest to consult with land dispute lawyers in Vietnam for advice and reprentation at early stage for dispute avoidance or dispute resolution.

 

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Real Estate Legal Matters in Vietnam

 In general, it is not permitted to own land in Vietnam as a private entity because the land belongs to the people and the State of Vietnam thereby operates as the administrator. 

However an ownership of a right to use land is permitted according to Vietnamese Law.  This so-called Land Use Right (“LUR”) Certificate provides the means to lease land from the State for Vietnamese and foreign people.  This LUR Certificate entitles the land users to protect their legitimate rights and interests.  The sale of a house or real estate is in fact the transfer of the rights for house ownership combined with the transfer of the land from the seller.  The right to use land can be directly acquired by different ways that are: lease from the state; sub-lease from a developer of a zone; transfer from another land user; allocation from the state.  The legal grounds for Land and House Law of Vietnam are stipulated in the Law on Housing 2005 of Vietnam as well as in the Law on Land 2003.  The rights and entitlements of holders of house ownership and the holders of the LUR Certificate are settled in this law.

According to Article 12 of the Law on Housing 2005, the name of the individual who holds the house ownership shall be written in the house ownership right certificate and his/her rights are stipulated in Article 21 that include for example the rights to posses; use; sell; lease; donate; exchange; lend or to let other people stay temporarily in the house.  As stipulated in Article 106 of the Law on Land 2003, the one who holds the LUR and house ownership certificate is entitled to exercise the full range of rights over the land/house. As such, land use rights and ownership of assets on the land are combined in the Certificate of Land Use Right and House Ownership Right (LURC).

But the possibilities to acquire land or houses depend on the individual/organization that wishes to do so, because Vietnamese, overseas Vietnamese and Foreigners do not have the same rights.  Especially for foreigners, it was often quite challenging to acquire land or houses in Vietnam. Before the year of 2009, foreigners could not legally acquire property but only could make a joint venture with a Vietnamese company. But the Resolution No. 19/2008(ND-QH12, effective January 2009, started to entitle foreigners to own houses in Vietnam under the conditions that the foreigner 1) is hired by an enterprise that currently operates in Vietnam and 2) must have at least a temporary residence card to purchase and own an apartment unit in Vietnam. This five-year piloting program that would end in 2014 is now discussed by the Vietnamese Prime Minister to continue this program after the first five years to support the real estate market and to make it more attractive for foreigners.

Even though about 80,000 expats live and work in Vietnam, only more than 400 cases of foreigners buying houses in Vietnam could be registered. Of course, this might be due to the difficulties for foreigners to buy houses before this pilot program . But this Resolution No. 19, which was guided by Decree No. 51/2009/ND-CP, still does not make it easy to operate in the real estate market in Vietnam for foreigners because of the complicated procedures to register ownership. After the first 5 years, the government stated to have the plan to review the pilot policy and the Ministry of Construction also opened up for the idea to allow foreigners to buy houses no matter if they work and do business here or if they want to buy real estates in Vietnam.

As the Vietnam’s real estate situation seems to stand before a turning point, it is necessary to keep up to date with all legal changes and developments. Due to the fact that Vietnamese law has special provisions for every organization or individual who wishes to operate with land and real estates related to House Law, it is inevitable to know about this legal circumstances in Vietnam.

ANT Lawyers – Law firm in Vietnam that could assist in different land and house related projects and matters such as land ownership, house purchase or sale and is aware of the differences between provisions on house law for foreigners and Vietnamese. Our professionals could advise clients about possibilities and potential risks concerning real estate laws, housing laws in Vietnam and furthermore could support clients with required procedures with the Vietnamese authorities.

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