Comments on Draft on Law on Real Estate Business – Part 1

Please download the pdf version here.

In May 2023, Ministry of Construction and VCCI jointly held a Seminar on Draft of new Law on Real Estate Business (Draft Real Estate Business Law) to collect opinions and comments from enterprise community and experts. The Draft Real Estate Business Law appears to be the latest version having been published before it is submitted to the National Assembly. The new Law on Real Estate Business is scheduled to be adopted by the National Assembly in November 2023. We will try to highlight some notable changes introduced by the Draft Real Estate Business Law in this post and subsequent posts.

This post is written by Nguyen Hoang Duong and Nguyen Quang Vu.

Read MoreInfo
Comment
Written by Nguyen Quang Vu On In ,

Should Foreign Investors Contribute Capital To Foreign Direct Investment (FDI) Enterprise In An Amount Denominated In A Foreign Currency Or In VND?

Introduction

An FDI enterprise is an enterprise which is established by foreign investors with or without domestic investors. It is a common practice for foreign investors to contribute capital to an FDI enterprise in a foreign currency, such as USD, with the amount denominated in that particular foreign currency recorded in the FDI enterprise's Enterprise Registration Certificate (ERC) and/or Investment Registration Certificate (IRC). The difference in exchange rate between the date of the IRC and the date of actual contribution often leads to a disparity between the VND amount converted from the contributed capital in foreign currency and the VND amount recorded in the IRC. Different

In such cases, it remains uncertain whether the foreign investors will be considered to have fully fulfilled their capital contribution because it is not clear which amount should be used to determine if the FDI enterprise's charter capital has been fully contributed: (i) the VND amount after being converted from the foreign currency, or (ii) the actual contributed amount in foreign currency (see analysis below). Different authorities may have different views on this issue.

Read MoreInfo
Comment
Written by Nguyen Quang Vu On In ,

Environment Permits Under The Environment Protection Law 2020 in Vietnam

The Environment Permit (Giấy phép môi trường) is a new concept under the Environment Protection Law 2020. In essence, an Environment Permit consolidates most of the environment permits or licences under the previous environment laws into a single document which would help the relevant authorities and businesses to monitor and record all the environmental aspects of an investment project. 

Projects subject to Environment Permit

Except for some certain emergency public investment projects, an Environment Permit is required for all investment projects which have potential adverse effect on the environment and which generate wastewater, dust and emissions or hazardous waste which must be treated or managed (the Regulated Projects).

Timing

Regulated Projects which have not started commercial operation by 1 January 2022, and which have an approved Environment Impact Assessment Report must obtain the Environment Permit before commissioning the environmental protection works of the Regulated Project.

Regulated Projects which have not started commercial operation by 1 January 2022, and which do not have an approved Environment Impact Assessment Report must obtain the Environment Permit before issuance of the mining licence (for mining project), the approval of the field development plan (for oil exploration project), the approval of the feasibility study (for PPP project or construction project), and the investment decision for other projects.

Read MoreInfo
Comment
Written by Nguyen Quang Vu On In ,

Comparison: Investment inside vs. outside an industrial park/industrial cluster in Vietnam

As Vietnam is on its way to become a new global manufacturing hub, many investors now consider the country as a new destination for their manufacturing business. However, finding the right location to implement the proposed project may be a vexed question.

In general, the following options are available for the investor:

  • Option 1: Acquisition of land inside industrial manufacturing-oriented zones, which include industrial park (IP) and industrial cluster (IC); and

  • Option 2: Acquisition of land outside the industrial manufacturing-oriented zones.

In this article, we discuss and compare the available options based on specific criteria and from both legal and practical perspectives to assist investors in making their best decision.

With respect to the industrial manufacturing-oriented zones, the law distinguishes between IP and IC based on certain criteria. In addition, the legal frameworks applied to investment in the IP and IC may sometimes be different. Accordingly, doing investment inside the IP and IC will be discussed separately as two potential options, where applicable.

Read MoreInfo
Comment
Written by Lawyers VNLaw On In , ,