Home » CASE L.T GROUP SETS UP REAL ESTATE BUSINESS COMPANY IN VIET NAM

CASE L.T GROUP SETS UP REAL ESTATE BUSINESS COMPANY IN VIET NAM

Posted on

20 August, 2021

Vietnam has not committed to opening for foreign investors to carry out real estate business in Vietnam, especially countries that are not part of any international trade agreements or organizations. Aplus Law’s Attorneys have successfully advised investors in the construction of real estate projects in Vietnam.

[MAIN CONTENTS]

The Scandinavian Peninsula L.T. Group wants to invest in real estate projects in Ho Chi Minh City. L.T. Corporation has reached out to Aplus Law to ask for legal issues to apply for approval of its project.

[LEGAL ISSUES]

For a foreign investment project, there will be legal issues that need to be addressed as follows:

  • Is the nationality of such enterprises in the investment agreements of Vietnam with that country?
  • Industry of business investors is prohibited or restricted
  • How do I transfer money and withdraw funds safely?

[ATTORNEY’S SOLUTION]

After the attorney took over the case checked the legal status of L.T. Corporation. According to the agreements that Vietnam has signed, the Scandinavian Peninsula is not a member or a bilateral agreement with Vietnam.

In order to enjoy the investment rights committed by Vietnam to countries that are members of trade organizations or countries with which Vietnam has bilateral agreements with Vietnam, investor nationality must be those countries.

Aplus Law has advised L.T. Group to overcome its citizenship weakness by setting up a subsidiary in Singapore or HongKong, which are places where there are no restrictions on foreign investment where any country can set up a subsidiary there. L.T. Group chose Singapore to set up a subsidiary and took this subsidiary to apply for a project in Vietnam.

Regulations on the scope of investment in the real estate sector in Vietnam are specified in Article 11 of the Law on Real Estate Business, under which foreign investors are entitled to carry out projects of rent or construction works for sublease; For land recognized by the State to use right land shall be invested in the construction of houses or construction works for sale, lease or lease-purchase; Receive the transfer of all or part of the real estate project of the investor to build a house or construction work for sale, lease or purchase;

Article 11. Scope of real estate business of domestic organizations, individuals, Vietnamese residing abroad, foreign-invested enterprises

1. Domestic organizations and individuals are allowed to trade real estate in the following forms:

a/ Buying houses or construction works for sale, leasing or buying leasing;

b) Rent houses or construction works for sublease;

c) For land allocated by the State, investment in the construction of houses for sale, leasing or purchase; transfer of land use rights in the form of distribution or sale of background in accordance with the law on land; investment in the construction of technical infrastructure cemeteries and cemeteries for the transfer of land use rights associated with that technical infrastructure;

d/ For land leased by the State, it is invested in building houses for lease; investment in the construction of houses or construction works that are not houses for sale, leasing, or buying leasing;

dd) For land recognized by the State for land use right, investment in the construction of houses or construction works for sale, lease, or purchase leasehold;

e) For land that receives a transfer of organizations, households, and individuals, they shall be invested in building houses or construction works for sale, leasing, or purchase leasing;

g) For leased land of organizations, households, and individuals, they shall be invested in building houses or construction works for leasing in accordance with the purpose of land use;

h) Receiving the transfer of all or part of the real estate project of the investor to build a house or construction work for sale, lease, or purchase lease;

i) Receiving the transfer or lease of land use rights of organizations, households, and individuals for investment in the construction of technical infrastructure for transfer or lease of land that already has such technical infrastructure.

2. Vietnamese residing abroad are allowed to trade real estate in the following forms:

a) Forms specified in Points b, d, g, and h Clause 1 of this Article;

b) For land allocated by the State, it is invested in building houses for sale, lease, or purchase leasehold;

c) For leased and transferable land in industrial zones, industrial clusters, export processing zones, hi-tech zones, economic zones, they may invest in building houses or construction works for business in accordance with the purpose of land use.

3. Foreign-invested enterprises may trade real estate in the following forms:

a) Forms specified in Points b, d, h Clause 1 and Point b Clause 2 of this Article;

b) For land leased in industrial zones, industrial clusters, export processing zones, hi-tech zones, economic zones, investment in building houses or construction works for business in accordance with the purpose of land use.

Based on the provisions of Vietnam’s real estate law, Aplus Law has advised L.T. Group to apply for a license to trade real estate in Vietnam with 3 areas allowed by the Law.

After the investment certificate is issued, the investor is allowed to transfer money to Vietnam according to the registered capital. In case of withdrawal of funds only apply after two years and the company guarantees full payment of debts in Vietnam.

Article 87. Increase and decrease in charter capital

      1. One member limited liability company raises charter capital through the company owner contributing additional capital or raising additional capital of others. The owner of the company decides the form of increase and the level of charter capital increase.
      2. In the case of raising charter capital by raising additional capital contributions of others, the company must organize management according to the type of limited liability company of two or more members or joint-stock company. The organization of management of the company is carried out as follows: a) In case of management organization of two or more members limited liability companies, the company must notify the change of enterprise registration within 10 days from the date of completion of the change of charter capital;b) In case of conversion into a joint-stock company, the company shall comply with Article 202 of this Law.
      3. Limited liability company limited to charter capital reduction in the following cases:

a) Refund part of the capital contributed to the owner of the company if the company has been operating business continuously for 02 years or more from the date of registration of the enterprise and ensure full payment of debts and other assets obligations after repaying the capital contribution to the owner;

b) The charter capital is not paid in full and on time by the owner of the company in accordance with Article 75 of this Law.

L.T. Group wishes to withdraw funds in advance 2 years in case of unforeseen risks in the investment environment. With this requirement, Aplus Law also advised investors to contribute capital in the form of the parent company to the subsidiary for a period of 2 years and receive capital back at any time.

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