LEGAL UPDATE VOL 50, SEPTEMBER 2022

LEGAL UPDATES VOL 50, SEPTEMBER 2022

VOL 50, SEPTEMBER 2022

Dear Valued Clients and Partners,

ADK Vietnam Lawyers would like to introduce to you the Legal Updates, Vol 50 of September 2022 with new legal provisions with notable contents as follows:

1. Foreign organizations and individuals may purchase and own residential houses in Vietnam

The Ministry of Construction is drafting the Law on Residential Housing (amended) (hereinafter referred to as “Draft”). One of the notable provisions in the Draft is that foreign organizations and individuals (hereinafter referred to as “Foreign entities”) are able to purchase and own residential houses in Vietnam.

Accordingly, the Draft has made the following recommendations:

(i) Areas where Foreign entities are allowed to acquire and own residential houses in Vietnam: They may own residential houses in the project on commercial residential house construction and the project on residence urban areas, except for projects located in areas that the Ministry of National Defense and the Ministry of Public Security determine to ensure national defense and security.

(ii) Quantity of apartments owned by Foreign entities:

- They may purchase, hire purchase, receive as a donation, inherit and own up to 30% of the total quantity of apartments of an apartment building (including mixed-use apartments);

- In an area whose population is equivalent to a ward-administrative division (hereinafter referred to as “Area”), where there is more than one apartment buildings for purchase or hire-purchase, they may own up to 30% of the quantity of apartments of each apartment building, and up to 30% of the total quantity of apartments of all such apartment buildings.

(iii) Except for the case in the Area where there are many commercial residential house construction projects in which Foreign entities already owned a sufficient quantity of separate houses:

- In case there is only 01 commercial residential house construction projects in the Area, Foreign entities may own up to 10% of the total quantity of separate houses and up to 250 houses of them;

- In case there are 02 or more projects in the Area, Foreign entities are only allowed to own up to 10% of the total quantity of separate houses in each project and up to 250 houses in the total quantity of such projects.

2. Amending the Law on Real Estate Business in order to promote the development of real estate market in Vietnam

The Ministry of Construction is drafting the Law on Real Estate Business (amended) (hereinafter referred to as “Draft”). In the Draft, some notable provisions include:

(i) Addition of real estate allowed to be put on the market: According to Article 5 of the Draft, such new types of real estate include condotels, resort villas and officetel.

(ii) Additional conditions for organizations and individuals conducting real estate business: Pursuant to Article 10.1 of the Draft, in addition to amendments and supplements in order to suit the Investment Law 2020 and Decree 02/2022/ND-CP, the Draft has added 02 (two) conditions:

- Having full capacity for legal and civil act; not being banned, suspended or temporarily suspended or not being in the process of conducting procedures for bankruptcy or dissolution of the organization;

- In case an investor is selected is selected, recognized and assigned as the investor of a real estate project in accordance with the Law, such investor must have an equity of not less than 20% of the total investment capital for the project with a land use scale of less than 20 hectares, not less than 15% of the total investment capital for the project with a land use scale of 20 hectares or more.

(iii) Specifying types of residential houses and construction works allowed to be put on the market. In detail, Article 13 of the Draft provides that:

- Available residential houses to be put on the market include all types of houses in accordance with Law on Residential Housing, except for residential houses for settlement, official residential houses and social residential houses built invested by the State using capital resources from state budget and state-owned residential houses;

- Available construction works to be put on the market include civil works according to Law on Construction, condotels, resort villas and officetels.

3. Vietnam aims to promote the development of renewable energy sources

The Ministry of Industry and Trade is collecting suggestions on the draft National Energy Development Strategy to 2030 with a vision to 2045 (hereinafter referred to as “Strategy”). With the strategic objective of "zero" mitigation by 2050, one of the development orientations set out by the Strategy is the encouragement and promotion of the renewable energy sector. Specifically:

(i) To give priority to the use of wind energy, solar energy for power generation and replace fossil fuel as much as possible;

(ii) To encourage investment in the construction works of power plants from municipal waste, biomass and solid waste in parallel with environmental protection and circular economy development;

(iii) To form and develop renewable energy centers in advantageous regions and localities;

(iv) To research, assess the overall potential and build orientations for the development of geothermal energy, wave energy, tidal energy, ocean current energy; and

(v) To promote the development of renewable energy forms including biofuel, hydrogen fuel and fuel cell for transportation and other purposes.

We hope you found this brief legal update informative.

Kind regards./.

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