New Decree implementing Law on Real Estate Business 2014

Decree 76/2015 has just been issued to implement the Law on Real Estate Business 2014 and will take effect from 1 November 2015. The main body of Decree 76/2015 only has 15 pages and 16 articles which seems to address only a few areas of the Law on Real Estate Business 2014. In particular,

  • It is now clear that the requirement of having a minimum paid up capital of VND 20 billion only applies to real estate developers and does not apply to companies providing real estate services (e.g. property management services or real estate consultancy services).

  • Decree 76/2015 even goes further to remove the requirements for setting up a company in Vietnam to provide property management services. This should be a good news for many hotel offshore managers who under the Law on Real Estate 2005 may be required to set up a company in Vietnam to provide property management services..

  • Decree 76/2015 provides for various sample contracts (sale or lease of real properties in different context). Decree 76/2015 also make clear that these sample contracts are for reference only.

  • Decree 76/2015 also provides for more guidance regarding procedures and documents required for affecting a transfer of real estate project in whole or in part. For example, Decree 76/2015 provides detailed guidance as to which documents could be used to evidence the financial capacity of the purchaser. This may include (i) audited financial report, (ii) confirmation by bank account balances or (iii) valuation certificate for in-kind capital. Decree 76/2015 also provide expressly the transfer of land use right associated with transfer of a real estate project will need to comply with land regulations.