50% Or 100% Foreign Ownership Limit In Public Companies Involving Real Estate Business In Vietnam?
The State Securities Commission (SSC) seems to take the view that public companies involving real estate business are subject to a 50% foreign ownership limit. However, we think that the SSC’s view is not consistent with the law and the foreign ownership limit in a public company involving real estate business should be 100% not 50%.
Under various international treaty (CPTPP or AFAS), Vietnam does not undertake to impose any foreign ownership limit to real estate business. Vietnam only limits the scope of operation of foreign-invested companies involving in real estate business (e.g. limitation on the ability to purchase houses for lease). This means that under these treaties, the foreign ownership limit in real estate business in general is 100%.
Article 139.1(a) of Decree 155/2020 provides that In the case of a public company operating in a business investment industry or trade for which an international treaty of which Vietnam is a member regulates foreign ownership, the provisions of such treaty apply. Accordingly, the foreign ownership limit in a public company involving in real estate business is 100%.
Similarly, since the Law on Real Estate Business 2014 imposes no foreign ownership limit to foreign invested enterprises, under the Law on Real Estate Business 2014, the foreign ownership limit in real estate busienss is 100%. Article 139.1(b) of Decree 155/2020 provides that in the case of a public company operating in a business investment industry or trade for which the relevant law regulates foreign ownership, then the provisions of such law apply. Accordingly, the foreign ownership limit in a public company involving in real estate business is 100%.