Vietnam _Land and Real Estate in Vietnam

Lawyer in Vietnam Oliver Massmann Land and Real Estate in Vietnam
The Licensing Process
Last year, a new Land Law which consolidated many of the different developments related to
land use over the years was passed. On 26 November 2014, we have also seen the passing of the
revised Law on Residential Housing and Law on Real Estate Business with provisions which
address some of the inequalities between foreign and domestic individuals and corporations.
These changes are critical to ensure that Vietnam continues to keep up with trends in the region
and to continue to attract foreign investment.
With the passing of the above laws, this article focuses on the licensing process faced by
domestic and foreign investors seeking to undertake real estate development projects.
1. PRE -REQUISITES FOR INVESTMENT CERTIFICATE
It is a requirement under the Law on Investment that investors have to obtain an Investment
Certificate with the business line in real estate development/investment to implement a real
estate project. However, prior to obtaining an Investment Certificate, investors are also required
to obtain the following:
(i) Decision on the appointment of investor - A decision issued by the People’s Committee
upon verification on the capability and experience of the investor as well as feasibility and
effectiveness to implement the project. The application file for such decision includes documents
proving the legal status, expert capacity, experience and financial capacity of the investors;
explanatory statement and preliminary plan on eco-technical solutions; capacity; and other
advantages of the investor if assigned to act as the developer (if any).
(ii) Basic design - A document comprising the description and basic drawings of a project.
The application file includes the explanation on basic design and basic design drawings.
(iii) 1/500 Masterplan Approval- A detailed plan of the project which includes criteria of the
project, all parameters required for land, construction and technical infrastructure, supply
sources, and environmental protection measures. The application file includes explanation about
contents of the plan, including miniature colour drawings; colour drawings of prescribed scale;
and information on construction planning issued by Department of Planning and Architecture;
and
(iv) Investment Approval- A document which sets out project scale, requirement on technical
infrastructure, implementation schedule of the project, basic rights and obligations of the
investor, and the plan on product sale. The application file includes project explanation, basic
design, decision on appointment of the investor and 1/500 Masterplan Approval.
The documents set out above are in relation to the implementation of a real estate project and are
required before an investor even knows if it is permitted to undertake a real estate project.
Investors have to incur a lot of time and costs for the purpose of preparing applications for and
obtaining such documents. It can take up to 160 days to obtain these documents not including
preparation time. These requirements cause unnecessary delays and difficulties to investors
seeking to undertake real estate development projects. Further, notwithstanding that the above
documents have been issued, an investor may still fail to obtain an investment certificate
subsequently to undertake a real estate development project.
Recommendation: Remove the requirements in items (i) to (iv) above to obtain the Investment
Certificate. The only pre-requisite necessary at the early stage is confirmation oh the parameters
for the project to be developed on the site. All other approvals can be finalised at a later stage.

An investor should only have to go through a one-step procedure in order to obtain the
Investment Certificate.
2. FIRST TIME FOREIGN INVESTORS
According to Article 34- of the current Law on Residential Housing, foreign investors seeking to
undertake development of commercial residential housing for the first time are required to have
an Investment Certificate in accordance with the Law of Investment.
Similarly, according to Article 8 of the Law on Real Estate Business, investors (both foreign and
domestic) seeking to receive assignment of a project are required to establish an enterprise
registered for real estate business. Hence, a foreign investor is also required to possess such
Investment Certificate for the purpose of receiving assignment of a project.
However, pursuant to the Article 50 of the Law on Investment, a foreign investor who
undertakes investment in Vietnam for the first time must have acquired or been assigned an
investment project in order to obtain an Investment Certificate to undertake a real estate project.
In short, an Investment Certificate is required for the purpose of an investor acquiring or being
assigned an investment project whilst an investor must have acquired or been assigned an
investment project to obtain an Investment Certificate.
Such contradicting and overlapping requirement between the abovementioned laws has made it
impossible for the first time foreign investors to undertake any real estate project. It is unclear
why the Law on Residential Housing and the Law on Real Estate Business require an investor to
secure an investment project prior to obtaining an Investment Certificate when the licensing
authorities would have examined the capability of an investor when evaluating the investor’s
application for an Investment Certificate. The licensing authorities would be provided with the
necessary information on the financial capability, experience and expertise of the investor during
the application procedure for the Investment Certificate.
This requirement merely adds unnecessary procedures which hinder real estate developers and
adds to the confusion of the licence issuing authorities.
Recommendation: We suggest that the requirement for an investor to possess an investment
certificate prior to being permitted to conduct a commercial residential housing project and to
receive assignment of a project be removed.
3. LAND USE RIGHTS CERTIFICATE (LURC) FOR PART OF CONSTRUCTION
WORKS
Pursuant to Article 32of Decree 43/20U/ND-CP making detailed provisions for implementation
of a number of articles of the Law on Land, the investors shall be issued an LURC upon the
completion of sate and purchase of residential property and the whole of construction works. It is
not clear whether an LURC will be issued for parts of the construction works ,e.g. part of a floor
or an entire floor and not the entire construction works, except in the case of individual
apartments in a high rise apartment building. The law does not however prohibit the sale of part
of construction works. There appears to be some confusion on the part of the authorities as to
whether an LURC can be issued in such circumstances leading to uncertainty and inconsistent
application.
Recommendation: We recommend that an instruction be given to all provincial authorities
confirming that LURCs can be issued for part of an entire construction works which is to be
implemented according to the request of the rightful parties.
4. SUBSEQUENT PROJECT LICENSING

According to the Law on Investments, an investor is required to obtain an Investment Certificate
for each project that an investor undertakes. For foreign invested companies, they are required to
amend their existing investment certificate to take into consideration the new project. This is
complicated as it involves combining the capital requirements, investment timelines and other
investment requirements of multiple projects. This makes it very difficult for investors to have
clear and specific requirements for a new project which do not affect other projects of an
investor. It also creates complications where a developer wishes to transfer one or more but not
all the projects that it is licensed to undertake under its Investment Certificate.
Recommendation: Provide the option to investors to receive separate investment certificates for
each project it undertakes. An investor can then choose the most efficient method of managing
the licensing requirements of multiple projects.
We have set out above some of the main licensing issues encountered by investors seeking to
undertake real estate development projects in Vietnam. Notwithstanding the recent changes in
the new laws, the issues set out above continue to limit the growth of the real estate sector in
Vietnam in general. As the issues identified are administrative in nature, we would respectfully
request that due consideration be given as to whether they are necessary.
LAND PROGRESS REPORT
Prepared by Land Sub-Group
Scoring to be rated as followings:
In progress report:
0 = issue remains; 1 = partially somewhat resolved; 2 = issue has been solved.
Priority (1 -10: highest).
Score = (Progress) x (Priority)
No. Age Issues
Suggested/Agreed
Action
Progress 0 1 2 Priority Score
No Age Issues
Suggested/Agreed
Action
Part I. Law on Land
1
Old
I
Foreign investors are
disadvantaged in
securing property
because of arduous,
discriminatory
procedures. A lease
must be negotiated
with the State and an
investment certificate
must be obtained
before a foreign
investor may
compensate the land
user.
These procedures
disadvantage foreign
investors relative to
Do away with the
requirement that leases
must be negotiated
with the State. Allow
land use rights
certificate to be issued
to foreign investors
before issuance of
investment certificate.
Not addressed. X 8

local developers.
Obtaining an
investment certificate
is a lengthy process,
and land users will
be unlikely to wait
for its issuance
before compensation.
2 Old
Decree 84, art. 32,
allows foreign
developers to secure
70-year lease terms
for residential leases,
indefinitely
extendable without
additional rent.
However,
"residential" is not a
defined term and it
remains unclear as to
what will be
considered a
"residential" project
in the
At a minimum, clarify
that the extendable 70-
year term is available
to any project with a
residential component.
Additionally, it would
be beneficial to provide
the same lease terms to
any project regardless
of its “residential"
nature.
Decree
71/2010/ND-CP
("Decree 71")
defines
developments to
include mixed use
developments with
residential
component. It is
not clear if the 70
year lease terms
apply to such
mixed use
developments or
not. This should
x 5
Important Note: This "Progress Matrix" was prepared based on the voluntary submissions of the
various Investor Groups Forum from 2011 - 2014. In terms of both the feedback and the
rankings/progress evaluations, it is not intended to be either complete or scientific. It does
nevertheless reflect many issues of concern that have come up in the various Investor Groups,
and their constructive proposals for solutions. It is hoped that it will provide a useful reference to
track and guide progress as the Government and the business community continue their
collaboration to improve the business environment though the channel of the Investor Group.
Among other things, it should be noted that many issues already fully resolved have been
dropped from this Progress Matrix to limit the size of the document, and almost all of the issues
noted are those that still need more work.
No Age Issues
Suggested/Agreed
Action
Progress 0 12 PriorityScore
context of mixed-use
development. This
uncertainty
disincentivizes highly
beneficial mixed-use
projects.
be clarified.
Article 126 of the Law
on Land 2013
("NewLand Law")
provides that the lease
term shall be 50 years
for all projects and it

may be extended by
the State. The land
user shall pay the land
use fee for the
extended term.
3 Old
The Land Law
interpretation of
"economic
organization" refers
only to local
enterprises, is
inconsistent with the
definition provided in
art. 103 of the Civil
Code.
Amend the Land Law
to clearly provide that
the term "economic
organization" refers to
"local enterprise."
This is a fundamental
legal inconsistency
that requries technical
correction to
harmonise the laws on
land development.
The New Land Law
provides definition of
"Foreign invested
enterprises'T’FIE")
and "Economic
organisations".
Accordingly, FIE
includes joint venture
enterprise, enterprise
with wholly or partly
owned by the foreign
company. Economic
organisations refer to
local enterprises only.
X 10 20
4 Old
Investment approval
for real estate projects
is impossible to
obtain under current
circular, multi-step
procedures.
Investment Law, art.
29.1 (el, requires an
Investment
Certificate in before
implementation of a
project. Decree
108/2006/ND-CP,
arts. 11.2, 46-47,
conditions the
certificate on the
presentation of
various documents,
including (under
Decree 71/2010/ND-
CP, art 7.) an
Investment Approval.
Such approval is
itself conditioned on
a Certificate of
Recognition of
Amend arts. 7, 12 of
Decree 71 as to
simplify the approval
procedure and remove
circularity. Approval
should, ideally, be a
one-step procedure.
There should be
specific procedure for
land clearance and
land compensation
process without
involvement of State.
Also, this should be
treated the same as
projects involving the
State.
VCCI's proposal to
reduce procedures for
land development
projects from five
days to three days
should be supported.
The head of the
Property Market and
Management
Administration, MOC,
points out that Decree
71 applies only to
residential projects.
Nonetheless,
circularity appears to
persist.
The New Land Law
does not adequately
address this and still
does not separate
investment and land
approval procedures.
Also New Land Law
only provides for
procedures for land
clearance and land
compensation
involving the state,
but is silent for
procedures where
investor undertakes
compensation process.
X 9 0

Investor (see Circular
16/2010/TT-BXD,
art. 6.1), which,
circularly, is
conditioned on an
Investment
Certificate (see
Decree 71, art. 12).
Article 58.3of the
New Land Law
requires that investors
must prove their
financial capacity and
make
No
Age Issues
Suggested/Agreed
Action
Progress 01 2 PriorityScore I
deposit in order to
be allocated land
or leased land by
the State for
investment
projects. Details
for such
requirements are
however not clear
under the New
Land Law. Such
conditions are
investment
requirements and
should be
separated from
land related
procedures.

5 Old
Land Compensation is
unavailable following
the recovery of leased
land, whether or not the
lease is paid in advance
as a lump sum. See Land
Law, art. 43.1 (dd).
This is at odds with the
treatment of land
allocated from the State
under art. 43.1(d), where
compensation is
available. This
distinction is unfair and
cuts against foreign
investors.
According to Article
83.5 of the Draft land
law, Land Compensation
is not applied for the
recovery of leased land,
which the lease is paid
annually, or as a lump
sum for the whole term
of lease and being
entitled to lease
exemption.
Amend the law to
provide for
compensation to all
lessees regardless of
where payment is
made annually, lump
sum or with rental
exemption.
The New Land
Lawprovides
compensation for
lump sum payment
only and not
annual payment or
rental exemption.
X 8 8
6 Old
Land Law, art. 90.4,
seems to altow
subsequent investors in
industrial zones
the choice between lease
and allocation from the
State, but art. 90.3 and
Circular 01/2005/TT-
BTNMT make it clear
that subsequent
investors may only
receive their
assignments/leases
directly from the
original developer.
Amend art. 90.4 to
remove any reference
to lease/allocation
directly from the state
in the case of
subsequent investors.
According to
Articles 149.2 and
149.3 of the New
Land Law, it is
clear that the
subsequent
investors can only
sub-lease land
from the original
developer.
X 4 8
No Age Issues Suggested/Agreed Progress 0 12 PriorityScore

Action
7 Old
Land disputes (under
Land Law, Arts. 136)'
must undergo
conciliation before a
local People’s
Committee before
referral to a court or
provincial/district
People's Committee for
final resolution. The
minutes from
conciliation must be
signed by both parties
before referral.
This process may be
abused by an
uncooperative party. A
refusal to attend
conciliation prevents the
creation of the minutes
necessary for a referral.
The law does not
currently address such a
situation.
Amend the law to
provide for the refusal
of a party to attend
conciliation, perhaps
by treating an absence
as an unsuccessful
conciliation capable of
referral.
Article 88.1 of
Decree
43/2014/ND- CP
dated 15 May
2014 ("Decree
43") provides that
if one of the
parties to the
dispute is absent
for the second
time, the
conciliation is
deemed
unsuccessful and
shall be resolved
by either the
People's
Committee and
People's Court.
X 8 16
8 Old
Land law, art. 93.3
prohibits foreign
investors from
leasing/subleasing from
individuals or households
for business/production.
No. such restriction
applies to Vietnamese
economic organizations.
Amend the land law to
allow foreign leasing
from individuals • and
households.
Not addressed in
the NewLand
Law
X 8 8
NoAgeIssues
Suggested/Agreed
Action
Progress 0 12Priority
Score
I

9 Old
Presently, the ability to mortgage
a land use right is severely
restricted for individuals,
households, and economic
organizations:
 Individuals/households
may only secure a
mortgage for production
or business purposes. See
Land Law, art. 113.7.
 Economic organizations
(both domestic and
foreign) may only secure
mortgages from on-shore
credit institutions. See
Land Law, art. 119.3(d).
These restrictions fail to recognize
the noncommercial reasons why
individuals may wish to borrow,
and fait to recognize the
importance of flexible mortgage
laws to corporate financing.
Amend the land
law to allow for
more flexible
mortgage
arrangements.
Specifically:
 Amend
113.7 to
allow
individuals
and
households
to
mortgage
their land
use rights
for non-
business
purposes.
 Amend
119.3(d) to
allow
economic
organizatio
ns to
mortgage
their land
use rights
to domestic
economic
organizatio
ns in
addition to
credit
institutions.
 Amend
119.3(d) to
allow
economic
organizatio
ns to secure
a mortgage
from
offshore
The New Land
Law has
incorporated
many of
recommendations
by removing
restrictions on
purpose of
mortgaging land;
however, law still
limitsfor
economic
organisations,
Vietnamese
residing overseas
and FIE
tomortgage to
credit institutions
authorised to
operate in
Vietnam.
x 8 8

lenders.
Land users should
be permitted to
mortgage land use
rights to domestic
economic
organisation or
individual and not
just a credit
institution, which
will create more
flexible investment
mechanism.
10 Old
There is uncertainty as to whether
the rights of real estate
(enumerated in Decree 108, art
2.11 and the "right to develop on
land” are assets attached to land.
Certainty is required to clarify
what capital contributions land
use rights holders may make with
their land.
Amend the Land
Law to include
rights of real estate
and the right to
develop projects
on land as assets
attached to land.
Not addressed in
the New Land
Law
x 4 0
11 Old
Annual land rental tariffs, under
Circular No.94/2011/TT-BTC, are
set at 1.5% of the published land
price. However, local authorities
may instead set this rate as high as
3% if the property provides
"special profits" or "outstanding
advantage." These ambiguous
terms gives the authorities a great
deal of discretion over rental
tariffs without any guidance as to
where the higher
Provide more
detailed guidance
as to where the
higher tariffs are
appropriate.
Not addressed in
the New Land
Law and Decree
46/2014/ND-CP
dated 15 May
2014 ("Decree
46") on collection
of land rent and
water surface
rent.
X 5 0
No
Age Issues
Suggested/Agreed
Action
Progress 01 2 PriorityScore
rates may be
appropriate.

12 Old
Leases obtained by
foreign invested
enterprises are almost
identical (particularly
in cost) to a land
allocation made to a
local or overseas
Vietnamese investor
(see Decree
69/2009/ND-CP, art.
13) yet the leases
made to foreign
invested enterprises
generally do not
share the stability or
longevity associated
with allocations. This
discrimination seems
unfair.
Amend the land law to
allow foreign invested
enterprises the same
terms given to local
investors.
Significant
improvement in
theNew Land Law,
where rights of lands
users are adjusted so
economic
organisationsand FIE
have more equal
rights to obtain land
allocation/land lease
from the state. Right
of land users to
obtain
allocation/lease now
based on project
rather than land users
being foreign or
domestic. In
particular, land
allocation applicable
to all entities who
invest in residential
housing projects for
sale/for sale and
lease provided
allocation is within
term of project; land
lease with one-off
payment/annual
payment applicable
for these entities that
invest in residential
projects for lease,
commercial projects
and other
agriculture/non-
agriculture projects.
However, according
to Article 127.3 of
the New Land Law,
economic
organisationsare
entitled for land use
right for use on a
stable and long term
basis upon
X 7 7

conversion of land
use purpose from
non- agricultural
land use right for use
on a stable and long
term basis to non-
agricultural land use
right for a definite
duration or from
non- aqricultural
land use right for a
No Age Issues
Suggested/Agreed
Action
Progress 0 1 2 Priority Score I
definite duration to
non- agricultural
land use right for
use on a stable and
long term basis.
This provision is
however not
applicable for FIE. -
Further, according
to Article 55.4 of
theNew Land Law,
economic
organisations are
entitled to be
allocated land for
grave

yards/cemetery for
business purpose,
which is not granted
to FIE.
13 Old
Decree 69, art. 11,
allows for the re-
determination of tand
prices, creating
investor uncertainty
regarding the full
costs of an
investment.
Furthermore, the
decree provides no
objective guidance as
to how the
recalculated prices are
determined,
compounding its
inherent problems.
Under the LandLaw
relating to land prices,
land prices are to be
determined according
to market prices.
Unfortunately, there is
a lack of transparency
and clarity on the
procedures to
determine land prices
and this has caused
great difficulties to
developers and caused
projects to be delayed
unnecessarily.
Remove the provision
completely. At a
minimum, ensure that
objective guidelines are
provided as to when
and how
redeterminations are to
occur.
Article 114 of
theNew Land
Lawprovides a price
list which is
prepared for a 5
year period and can
be adjusted when
the common market
price increases by
20% or more as
compared to the
maximum price or
decreases by 20% or
more as compared
to the minimum
price in the land
price list.We agree
that the use of a
price list provides
more certainty but a
5 year period is too
long to properly
reflect changes to
the market prices
X 8
8
i

14 Old
Circular 94, art. 8.2,
repealed provisions
allowing for land
compensation and
clearance deductions
for agreements
reached directly
between land users
and foreign invested
enterprises or
overseas Vietnamese.
This arrangement
unnecessarily
penalizes developers
for directly
negotiating their
agreements.
Amend Circular 94 to
allow for the deduction
of all legally
documented
compensation
payments against any
payments due to the
State.
Decree 46 provides
that land
compensation and
clearance shall be
deducted from the
land rent payable if
the person leasing
land from the State
voluntarily
advances the
payment for
compensation and
site clearance.
X 8 16
No Age Issues Suggested/Agreed Action Progress 0 1 2 Priority Score
15 Old
Decree .No
02/2006/ND-CP
{"Decree 021
')', art.
12.1(e) gives
developers of "New
Urban Zones" the
right to assign or
sublease their interest
in the land. However,
there are no
implementing
guidelines, and it
remains unclear how
these rights are
properly exercised.
This is an important
mechanism to encourage
healthy urban
development. Clarify the
requirements on the
assignment/subleasing of
New Urban Zones.
Marginal
progress.
Decree 02 is no
longer valid.
X 5 5

16 Old
The Investment Law
is unclear about what
percentage of foreign
ownership is required
to distinguish a
foreign invested
enterprise from a
domestic
enterprise.See
Investment Law, art.
3.6. The
determination
materially affects the
procedures for
acquiring land. See
Land Law, art. 108.
 Provide clear
guidance as to the
threshold at which
a domestic
enterprise becomes
a foreign invested
enterprise.
Definition of
"Foreign Invested
Enterprise*1
status
triggers WTO
market access and
National
Treatment
limitations, so it
should be linked to
voiting control
(i.e., the 65/75%
threshold under
the enterprise law).
 Clarify what steps
a land-holding
domestic
enterprise must
take upon
becoming a
foreign invested
enterprise.
Specifically,
address whether
land allocations
must become
leases and the
process for doing
so.
The New Land
Law has not
provided with the
threshold at which
a domestic
enterprise
becomes a foreign
invested
enterprise.
X 10 0

17 Old
Land with water
surface area is
narrowly restricted in
its use.See Land Law,
arts. 78- 80. Various
recreational,
commercial, and
residential uses are
not currently
provided for, making
investment in such
properties very
difficult.
Not necessary to set
out in the Draft Law
any limitation of the
use purpose of the
inland water surface.
Amend the Land Law to
provide a legal framework
for alternative uses for
water surfaces.
This is a technical
correction and should be
easy to make.
Clause 140 of the
Draft Law
provides that
inland water
surface shall be
leased to
Domestic Entities,
Foreign Entities
and JV Entities
for purposes of
aquaculture,
agricultural or
agricultural
combined with
non- agricultural.
Suggest removing
restrictions on
inland water
surface use
purpose and
setting out clearly
the form of water
surface lease
applicable to
investors for
clarity. Not
addressed in the
New Land Law.
X 6 0
No
Age Issues
Suggested/Agreed
Action
Progress 0 1 2 Priority
Score
1
18 Old
Difficulties of
businesses in
obtaining and1
developing land
outside of industrial
zones,
particularly in urban
centers where it
affects the services
economy.
The Government should
issue a decree or
implement other forms
of guidance to free up
more idle land for
development.
The Government is
driving
developments
toward areas
outside of the
traditional city
centers. Article 93
of the New Land
Law was
specifically
amended to allow
foreign invested
enterprises to lease
land from non-State
land use right
X 9 9

holders outside
industrial zones.
However, without
legal elaboration in
a Decree or
implementing
circular, most
provincial
authorities refuse to
allow this type of
land use except in a
few cases for port
projects.
There is still no
decree or
implementing
circular regarding
the procedures to
obtain and develop
land outside of
industrial zones.
19 Old
The Land Law's use
of "foreign investor”
is interpreted too
narrowly. Currently,
the embraces only
foreign invested
enterprises. This
interpretation is
Investment Law, Art.
3.4, and Decision No.
88/2009/QD-TTg,
which include
enterprises with
7149% foreign
ownership.
Amend the Land Law
to provide a definition
matching that of the
Investment Law.
Article 5 of New
Land Law provides
a clear definition of
enterprises with
foreign invested
capital (please see
item 3 for further
details).
X 7 7
20 New
Conversion of land
use purpose, Article
58.1 of the draft land
law, the following
types of land have
been additionally
included in those that
must get the approval
of the authorities for
It is not dear why the
requirement for
approval has been
inserted. To avoid
additional
administrative burden,
we suggest retaining the
provisions of the
LandLaw which do not
Article 57 of the
New Land Law
provides that
foregoing types of
land are required to
apply for the
approval of the
authorities for the
conversion of land
X 5 0

conversion of land
use purposes: (i)
Conversion of land
for other annual crops
to land for raising and
planting salt-water
aquatic products, salt
production, land for
raising and planting
aquatic products in
the forms of ponds,
lakes, marshes; (ii)
Conversion of forest
land for
require the approval of
the authorities for
conversion of land use
purposes.
use purposes.
No Age Issues
Suggested/Agreed
Action
production purpose to
forest land for other
purposes; and (iii)
Conversion of land for
construction of public
building works, land
used for public
purpose with business
purposes, land for non-
agricultural production
[and/or] business not
being land for
commercial, service
purpose to land for
commercial service
purpose; conversion of
land for commercial,
service purpose, land
for construction of
public building works
to land for non-
agricultural production
establishments.
In the Land Law, such
types of land are not
required to apply for
approval of the
authorities but just
need to be registered

with registration office
for land use rights.
21 New
Recovery of the
residential tand which
is under pollution or in
a threat of breaking
down and detrimental
to human lives,Article
68.1 (dd) has provided
the provisions on
recovery of the
residential land which
is under pollution or in
a threat of breaking
to human lives. It is
however unclear under
the draft land law as to
which criteria and who
is entitled to determine
if residential land is
under pollution and/or
the threat of breaking
to human lives.
Provide more
guidelines on this in the
draft land law
Article 65 of New
Land Law and
article 65 of Decree
43still not provide
the criteria and the
authority which is
empowered to
determine whether
any residential land
is affected by
pollution and/or the
threat of landslide
which may be
detrimental to
human lives. The
relevant legislation
however just
provides the order
and procedures for
land resumption in
areas with
environment
contamination
posing a threat to
human life;
residential land
likely to suffer
from landslides or
subsidence or to be
affected by some
other natural
disaster, causing a
threat to human
X h 0

life.
No Age issues
Suggested/Agreed
Action
Progress 0 12 Priority
Score
1
22 New
Land use right
certificate ("LURC")
which has been
issued with wrong
information
107.2(d) of the draft
land law, the State
shall be entitled to
withdraw the LURC
which has been
issued with wrong
information on
authority, land user,
land area, without
satisfaction of all
conditions for
issuance of LURC,
with wrong land use
purpose, land use
term or land use
source in accordance
with the land laws
unless the land user
has transferred the
land and the assets
attached with the
Clarify the action after
the land use rights
certificate is
withdrawn. There
should be a provision
for reissuance of a
corrected land use
rights certificate.
86 of Decree 43, land
user or owner of
assets attached to
land can submit an
application to request
for correction in the
case the error is due
to the fault of the land
user or owner of
assets attached to
land; or the land
registration office
requests the land user
or owner of assets
attached to land to
submit the issued
LURC for correction
in case the land
registration office
discovers an error in
the issued LURC.
X 5 10

land in accordance
with the land laws.
Note however that
the draft land law
does not mention if
the State shall issue
a new LURC in
which the wrong
information has been
corrected to the land
user especially in the
case where the
mistake is not the
fault of the land
user.
23 New
The time for
calculating for
payment of the land
use fees/land rentals
Article 109.3 of the
draft land law The
land use fees/land
rentals shall be
calculated and paid
from the date of
issuance of the
decision on land
allocation/land
rental, on conversion
of land use purpose
or recognition of
land use right by the
State. In practice,
after the issuance of
the decision on land
allocation/land
rental, it may take a
long time for the
land users to
compensate and
clear the land from
the previous land
holders. In the
circumstances, it is
not reasonable to ask
the land users to pay
Provide the time for
calculating for
payment of the land
use fees/land rentals
should be at the date of
issuance of the
decision on land
allocation/land rental,
on conversion of land
use purpose or
recognition of land use
right by the State but
payment to be made at
the time the
compensation and
clearance procedure
have been completed
Article 108 of New
Land
Lawhasrecognised
our recommendation
by providing that the
timing for calculating
land use fees/ land
rental shall be at the
dateof issuance of the
decision on land
allocation land/land
lease, on conversion
of land use purpose
or recognition of land
use right by the State.
Decree 45/2014/ND-
CP dated 15 May
2014and Decree 46
provide that the
payment of the land
use fees/land rental
with one off
paymentmust be
made within 90 days
after the notice from
the tax authority.
X 8
0

for the land use
fees/land rentals for
the time they have
not been yet handed
over the cleared
land.
No
Age Issues
Suggested/Agreed
Action
Progress 0 1 2 PriorityScore
24 New
Specific regulations
on allocation or lease
of land in relation to
specialized use forest
land
Article 77.6 of the
LandLaw provides
that "The Government
shall provide specific
regulations on
allocation of
land; on the rights,
obligations and
interests of
organizations, family
households and
individuals being
allocated specialized
use forest land; on
allocation or lease of
land in buffer zones of
land; and on lease of
land in combination
with the joint
landscape and
Provide the specific
regulations on
allocation or lease of
land in relation to
land
Article 68.2 of
Decree 43provides
the order and
procedures for land
allocation, land
lease and
conversion of land
use purposes on
specialized use
forest land for
implementation of
investment projects.
The New Land Law
however fails to
provide specific
regulations on the
rights, obligations
and interests of
organizations,
family households
and individuals
being allocated
specialized use
forest land; on
allocation or lease
of land in buffer
zones of specialized
use forest land; and
X 4 4

ecological-
environmental
tourism business."
Note however that
this provision has
been removed from
Article 138 of the
draft land law.
on lease of
specialized use
forest land in
combination with
the joint landscape
and ecological-
environmental
tourism business
25 New
Regime on land for
construction of the
apartment blocks
The draft land law
only mentions that the
Government shall
provide the specific
regulations of the
regime on land for
construction of the
apartment blocks and
land for construction
of works servicing
directly the lives of
the households in
apartment blocks.
regulations relating to
the regime on land for
construction of the.
apartment blocks.
Regime on land for
construction of the
apartment blocks
has been provided
in Article 49 of
Decree 43.
X 8 16
26 New
Land recovery due to
failure of investors to
meet implementation
schedule: draft land
law retains provision
in Article 38.12 of
Land Law that
provides that the State
will recover land if it
allocate or lease the
land for investment
project and that land
is not used for a
period of 12
Remove additional
requirements as the
State already has the
authority to make the
decision not to grant
an extension. Institute
clearer appeal
mechanism.
Article 64 of Land
Lawhas no change
in substance.
X 9 0

consecutive months or
the
No
Age Issues Suggested/Agreed Action Progress 012Priority
Score
1
actual land use
schedule is 24- months
behind schedule
recorded in investment
project, and adds an
additional requirement
that an extension shall
be granted one time for
a maximum period of
24 months. Also shall
be no compensation or
refund by the State to
investors for their
expenses/assets
attached to land as
result of land recovery.
27 New
Issues related to
compensation in draft
land law:
1. According to
Articles 71 and
72.2 of the draft
land law, the
compensation
council shall
attend to the
compensation
process.
However, it
does not specify
who comprises
in the
compensation
council.
Therefore, it is
still unclear if
1. It should be clear in the
draft land law who
comprises in the
compensation council.
The investors who are
determined and approved
inprinciple by the State
authorities as the
investor for a specific
investment project
should be entitled to
attend to the
compensation process, so
that they can observe the
process and make
complains/recommendati
ons if their rights and
benefits are affected.
2. Not clear which entities
will have the right to
determine fault and how
Not
addressed in
the New
Land Law.
x 10 0

the
representative
of the investor
can be entitled
to attend to the
compensation
process or not
2. Lack of clarity
in determination
of fault in land
compensation if
there is a
difference in
price at point of
decision versus
actual time of
payment
(Clause 95.1).
this will be done, clearer
procedures needed.
28 New
Right to receive land
use right
Discrimination between
Domestic Entities and
Foreign Entities/JV
remains in the new
provision of the Land
Law regarding receipt
of the land use right.
Foreign Entities can (i)
receive land use right
pursuant to an
agreement in a
mortgage contract for
debt settlement/ an
administrative decision
of State body resolving
a complaint or
denunciation relating to
land/judgment of
relevant enforcement
body/legal instrument
on division of land use
right in accordance w/
law and (ii) receive of
assignment of
investment capital
Discrimination between the
Domestic Entities and Foreign
Entities should be eliminated by
giving the Foreign Entities the
same rights to receive the land
use right as the Domestic
Entities. Also, the draft land law
should also set out rights of
Foreign Entities/JV Entities in
respect of land use right
received and ability to use such
right to land.
Not
addressed in
the New
Land Law.
x 8 8

being value of land use
No
Age Issues
Suggested/Agreed
Action
Progress 0 1 2PriorityScore
right. The JV can receive
assignment of land use
right by receiving capital
contribution in form of
land use right.The draft
land law however does
not set out the rights of
Foreign Entities in
respect of the land use
right reeelvad and what
they can do to deal with
such land use right
29 New
Draft land law does not
set out clear procedures
and required documents
for issuance of land
decision applicable for
land with and without
completion of clearance
and compensation.
There should be specific
procedures and required
documents for land
applicable for land with
and without completion
of clearance and
compensation. Such
procedures should
separate the requirement
on investment
procedures from land
procedures to avoid
confusion and
unnecessary delays.
Not addressed X 6 0

30 New
Clause 167.3 of draft
land law proposes for
notarization/certification
of the transactions
involving land use right
as follows:
Notarization/certification
shall be compulsory for
transactions regarding
assignment, . bequeathal,
donation, mortgage, and
capital contribution of
land use right/asset
attached to the land. Such
requirement however
shall be optional to
exchange of agricultural
land use right, lease/ sub-
lease land use right/assets
attached to land; The
draft land law also
provide that (i) the
notarization shall not be
required for transactions
regarding assignment of
land use right/asset
attached to the land if one
party is a real estate
enterprise; and (ii) the
notarization for
bequeathal shall comply
with provisions of the
Civil Code.
Notarisation/certification
shall be optional of all
transactions involving
land use rights to enable
real estate transactions to
be conducted easily
Article 167 of New
Land Law
provides that
contracts regarding
performance of
rights of a land
usermust be
notarised/certified,
except for the case
that one or more
parties
participating in the
transaction are
organizations
conducting real
estate business
activities.
X 7 7
No Age Issues
Suggested/Agreed
Action
Progress 01 2 Priority Score

31 Old
Articles. 9-10 of the
Law on Real Estate
Business ("LREB”),
restricts the conduct
of foreign
organizations and
individuals in their
real estate
transactions and
businesses. Foreign
entities may not
lease or purchase
houses or
construction
facilities for the
purpose of sale,
lease, or sublease,
and may not invest
in or lease land for
the purpose of
improvement and
subsequent lease or
sublease. These
restrictions
unnecessarily restrict
investment in
Vietnam's real estate
sector. They may
also affect the
activities of non-real
estate foreign
invested entities in
acquiring facilities
for their own use.
Remove the
restrictions in Articles.
9- 10 so that the
foreign and domestic
investors will have the
same rights and
obligations
The draft LREBissued
in 2014 (“New Draft
LREB'Iprovides to
foreign organisations
and individuals and
to
Vietnamese
residing overseas the
rights as follows:
(i) invest in
the
construction of
residential housing for
sale, sub-lease or
leasepurchase; (ii)
lease houses, buildings
for subleasing; (iii)
invest in
construction
of
construction
works which are not
residential on leased
land for sale, sub-lease
or lease purchase; (iv)
receive assignment of
whole or part of real
estate project;
(v)
invest in
construction
of
houses,
construction works on
leased land (applied to
foreign entities), oron
leased land and land
got from assignment (
applied toVietnamese
residing overseaslin
industrial zone,
industrial complexes,
export processing
zones, high tech zones
or economic zones for
business in accordance
x 8 8

with the land use
purpose, and (vi)
provide real estate
business services. Note
however that foreign
organisations and
individuals and
Vietnamese residing
overseas are still
prohibited from
undertaking the
following: (i) purchase
houses and buildings
for sale, lease, Lease-
purchase; (ii) receive
the transfer of land use
right; (iii)invest in
construction of
technical
No Age Issues
Suggested/Agreed
Action

infrastructure works on
allocated land, land
from assignment or
lease, land under
lawful using right for
assignment and lease
of land already having
technical infrastructure
thereon. The right to
invest in construction
of technical
infrastructure works on
leased land is provided
under the existing laws
but will be
removed;(iii)assign
land use right in the
allocated land in form
of land plots which is
Land Law;(iv)lease
land from other
organisations or
individuals to invest in
construction of houses,
construction works for
sell, sublease, lease
purchase; and(v)invest
in the construction of
houses, construction
works on land got
from assignment and
land under lawful
using right for sell,
lease out, lease-
purchase.

New Article 4.3 of
the draft LREB
issued in 2013 ("Old
Draft LREB”):
Removing the word
"create"
The word "create" is
used when referring
to the business
activities of foreign
owned capital
enterprises. This
suggests that
construction works
must be "created"
which could exclude
renovation works.
Remove the word
"create" for Articles
4.3, 15 and 16;
replace with
"renovation" for
Article 4.14 and
adding the word
"renovation" after the
word "creation" for
Article 10.1 (a).
TheNew Draft
LREBhas replaced the
word "create" and
"renovation" with the
word "construct".
x 5 10
No Age Issues
Suggested/Agreed
Action
Progress 0 1 2 PriorityScore I
33 New
Article 7 of the Old
Draft LREB:
Conditions applicable
to real estate m^de
available for business
The Old Draft
LREBhas no
provision on cases of
under new urban area
projects, residential
housing projects
which have been
completely
constructed but have
not been issued with a
certificate of land use
right, ownership of
residential house and
other assets attached
to the land (the
"Certificate").
However, this may be
deemed as existing
Add cases of houses and
buildings under new
urban area projects,
residential housing
projects which have
been completely
constructed but have not
been issued with a
Certificate.
Not addressed in
the New Draft
LREB
X 5 0

and not the assets to
be formed in the
future.
34 New
Articles 7.2(e),
26.4(a) and 50.1 of
the Old Draft LREB:
the term “technical
infrastructure" is not
clearly defined. This
has caused uncertainty
and lack of clarity.
Insert clear definition of
in Article 7.2(e);Article
26.4(a) and Article 50.1
Not addressed in
the New Draft
LREB
X 5 0
35 New
Articles 8.1, 18 and
19.2(b) of the Old
Draft LREB and
Articles 25.2 (c), 69,
70 and 72 of the Old
Draft LRHon legal
capital
The Old Draft LREB
requires investors to
have legal capital but
a specific amount of
legal capital is not yet
provided. Further, the
Old Draft LRH laws
also specify certain
sources of the capital
to be mobilised which
limit investors’ ability
to raise capital. In
addition, the Old
Draft LREB also
requires the placing of
a deposit in an escrow
account for
investment
commitment.
Since there are already
requirements on
compulsory charter
capital contributions
which are a percentage
of the investment
capital required for a
project, requirements on
legal capital, these
requirements are
unnecessary. Remove
the requirements on
legal capital, the source
of capital and placing a
deposit in an escrow
account for investment
commitment.
Article 10 of the
New Draft LREB
requires investors
to have legal
capital of 20
billion VND and
the draft LRH also
requires the
investor to place a
deposit for
investment
commitment.
Further, Article 69
of the draft
LRHissued in
2014 (“New Draft
LRH") also specify
certain sources of
the capital to be
mobilised which
limit investors’
ability to raise
capital.
X 9 0

No Age Issues
Suggested/Agreed
Action
Progress 0 1 2 Priority Score I
33 New
Draft LREB:
Conditions applicable
to real estate m^de
available for business
The Old Draft
LREBhas no provision
on cases of houses and
buildings under new
urban area projects,
residential housing
projects which have
been completely
certificate of land use
right, ownership of
residential house and
other assets attached
to the land (the
"Certificate").
However, this may be
deemed as existing
and not the assets to
be formed in the
future.
Add cases of houses
and buildings under
new urban area
projects, residential
housing projects which
have been completely
Certificate.
Not addressed in
the New Draft
LREB
X 5 0
34 New
Articles 7.2(e), 26.4(a)
and 50.1 of the Old
Draft LREB: the term
“technical
infrastructure" is not
clearly defined. This
has caused uncertainty
and lack of clarity.
Insert clear definition of
in Article 7.2(e);Article
26.4(a) and Article 50.1
Not addressed in
the New Draft
LREB
X 5 0

35 New
Articles 8.1, 18 and
19.2(b) of the Old
Draft LREB and
Articles 25.2 (c), 69,
70 and 72 of the Old
Draft LRHon legal
capital
The Old Draft LREB
requires investors to
have legal capital but
a specific amount of
legal capital is not yet
provided. Further, the
Old Draft LRH laws
also specify certain
sources of the capital
to be mobilised which
limit investors’ ability
to raise capital. In
addition, the Old Draft
LREB also requires
the placing of a
commitment.
Since there are already
requirements on
compulsory charter
capital contributions
which are a percentage
of the investment
capital required for a
project, requirements
on legal capital, these
requirements are
unnecessary. Remove
the requirements on
legal capital, the source
of capital and placing a
commitment.
Article 10 of the
New Draft LREB
requires investors
to have legal
capital of 20 billion
VND and the draft
LRH also requires
the investor to
place a deposit for
investment
commitment.
Further, Article 69
of the draft
LRHissued in 2014
(“New Draft
LRH") also specify
certain sources of
the capital to be
mobilised which
limit investors’
ability to raise
capital.
X 9 0
No Age Issues
Suggested/Agreed
Action
Progress 0 12 Priority
Score
1
36 New
Article 8of the Old
DraftLREB: Conditions
applicable to
organizations and
individuals engaged in
real estate business The
Old DraftLREB
stipulates that any
organization or
individual conducting
real estate business must
establish an enterprise or
co-operative. However
according to laws on
investment, organisation
or individual may also
Add the form of
entering into a business
cooperation contract
without establishment
of a legal entity in
order to conduct real
estate business.
Not addressed in
the New Draft
LREB
X 3 0

conduct real estate
business by way of
entering into a business
cooperation contract
without establishment of
a legal entity.
37 New
Articles 8, 61 and 66 of
the Old Draft LREB:
Practising cards
1. The words
"practicing
cards" in Articles
8.1, 8.2, 61 and
66 of the Old
Draft LREB do
not conform with
the term that has
been used in
other
regulations.
2. Article 66
providing on the
real estate
valuation
practicing cards
is not necessary
since the Law on
Price already has
such provisions
in relation to
Price Evaluator
Certificate,
includinq real
estate valuation.
(11 Replace the words
"practicing cards" with
"practicing certificates"
in Articles 8.1, 8.2, 61
and 66 of the Old Draft
LREB; (2) Remove
Article 66.
The New Draft
LREB has
replaced the
words
"practicing
cards" with
"practicing
certificates" and
removed Article
66
X 2 4

38 New
Draft LREB: Publicity
of information about
property which is made
available for business.
1. TheOld Draft
LREB has no
specific
regulations
regarding the
time to publicise
information
about the
properties, and
the cases in
which the
publicity of
information
about the
properties is
required.
2. TheOld Draft
LREB requires
the transfer of a
real estate
project between
investors to be
public. It may
cause adverse
impact to the
project as welt as
to the business
operations of the
concerning
investors.
1. Clarify the time
and cases
requiring
publicity of
properties
information.
2. Exclude the
cases of transfer
of real estate
project from
cases required
information
publicity.
Not addressed in
the New Draft
LREB
X 5 0
No Age Issues
Suggested/Agreed
Action
Progress 0 1 2 PriorityScore 1

39 New
DraftLREB and
Articles 25.2 (a) (b)
and 116 of the
draftLRH issued in
2013 ("Old Draft
LRH”): Selection of
investors for real
estate project for
business
The draft laws require
two conditions, inter
alia, which are being
an enterprise
established and
operating in
accordance with the
provisions of law
concerning enterprises
and having registered
to conduct real estate
business. This shall
cause difficulties to
investors being
foreign individuals
and organisations who
make investment in
Vietnam for the first
time. Further, this
provision is in conflict
with the law on
investment which
requires that a foreign
investor who makes
investment in
Vietnam for the first
time must have an
investment project to
be entitled to establish
an enterprise.
Exempt foreign
individuals and
organisations who make
investments in Vietnam
for the first time from
these requirements.
Not addressed in
the New Draft
LREB and the
New Draft LRH
X 7 0

40 New
Article 20.6 of the Old
Draft LREB. Rights
of investors of real
estate projects
TheOldDraft LREB
provides that investors
are entitled to
exemption or
reduction of land use
fees or to be entitled
to pay land use fees
by instalments in
accordance with the
project schedule.
However, there are no
specific regulations on
the criteria for
eligibility.
regulations on the
criteria for eligibility.
The New Draft
LREB has
removed the
provision on the
right of investors
to be exempted or
reduced land use
fees or to be
entitled to pay
land use fees by
instalments in
accordance with
the project
schedule.
X 5 0
41 New
Draft LREB and
Articles 31.4 and
122.1 (c) of Old Draft
LRH. Payment for
real estate transactions
The draft laws
provides some
methods of payment
applied to real estate
transactions including
party to receive
payment, maximum
amount of advance
payments and deposit
allowed, fixed late
payment interest
Remove restrictions in
Draft LREB and
Articles 31.4 and 122.1
(c) of theOldDraft LRH
Article 57 of the
New Draft LREB
provides that the
first payment for
real estate to be
formed in the
future cannot
exceed 30% of the
contract value.
For the domestic
investors, in any
case the seller
cannot obtain
more
X 8 0
No
Age Issues
Suggested/Agreed
Action

■
rates. Parties should
be free to agree on
these processes
without restrictions.
than (i) 70% of the
contract value
before the handover
of the houses and
buildings; and (ii!
95% of the contract
value before the
issuance of the
Certificate.
For the foreign
investors, in any
case the seller
cannot obtain more
than (i) 50% of the
contract value
before the handover
of the houses and
buildings, and (ii)
95% of the contract
value before the
issuance of the
Certificate.
42 New
Time of transferring
ownership
Article 26.3(c) of the
Old Draft LREB and
Articles 13 and 150.3
of theOldDraft LRH
provides that the
purchaser shall be
entitled to own the
property after having
made payment in full
or upon the time the
contract on capital
contribution is
notarised or certified.
However, pursuant to
theNew Land Law,
the time of transfer of
the property shall be
the time such
transaction is
registered with the
land use right
registration office.
Amend such provisions
for consistency with the
land law: the purchaser
shall be entitled to own
the property after being
issued with the
Certificate.
Article 19.5 of
theNew Draft LREB
and Article 12.3 of
the Newdraft LRH
provide that the
ownership of the
property shall be
transferred upon the
handover of such
property
X 3 0

43 New
Draft LREB and
Article 4.21 of the
Old Draft LRH on
guarantee
There are no
provisions on what
the guarantee will be
and how it will be
implemented.
Clarify who the third
party having right to
provide guarantee is,
how much the
guarantee fee is, terms
regarding
responsibilities of the
guarantor and investor,
how it is performed.
Article 56 of the
New Draft LREB
provides that the
guarantee will be
provided by the
financial institution
or credit institution
licensed to operate
in Vietnam. In
addition, this Article
also provides the
contents and
guarantee fee will
be agreed by parties
in the contract.
X 4 0
44 New
Articles 28 and 32 of
theOldDraft LREB:
Sale and purchase of
(1) Regarding Article
28.2: TheOldDraft
LREB fails to
mention the transfer
of
(1) The transfer of
ownership of the
common areas in non-
mixed use building
projects, villas and
individual residential
housing projects with
1. Not
addressed in
the New
Draft LREB.
2. The New
Draft LREB
only
X 8 8
No Age Issues
Suggested/Agreed
Action
ownership of common
areas in cases of selling
houses and buildings not
in mixed use buildings or
in cases of
villas/individual
residential houses having
common areas.
2. Further, the form
of land use rights
for the non-
residential
components (i.e.
office for lease
and/or
commercial
centre area) is not
common areas should
be treated the same
way with those in
mixed use buildings.
12) Clarify that form of
land use rights should
follow the land use
purpose eg long term
and stable use for
residential components
and lease for the non-
residential
components.
provides thatthe
land use right of
owners after
purchasing areas
within a mixed
use building must
throughout follow
either of the forms
being long-term
and stable or
lease. Note that
the New Draft
LREB fails to
clarify that the
form of land use
right being long
term and stable
use will be
applied to

provided yet. residential
components, and
the form of land
use right being
lease applied to
the non-
residential
components.
45 New
Articles 49, 50 and 51 of
the Old Draft LREB:
Assignment of the real
estate project. The Old
Draft LREB provides
that the assignment of a
real estate project must
be approved by
competent authority.
However, the draft
LREB does not provide
the criteria as well as
specific competent
authority for approving
the assignment of the
project. Further Old
Draft LREB only
provides a number of
cases in which transfer of
real estate project is
permitted. These
restrictions may cause
difficulties to investors in
their business activities,
especially in the
performance of
procedures.
In addition, currently
many State regulatory
agencies require that the
name of the investor
must be the same in all
of the project
documentations even
though the project is
permitted to be
Provide that the
competent authority
will consider if the
parties satisfy the
conditions for
assignment and
receiving such
assignment (not just
approval or
disapproval for
assignment) before the
parties enter into the
assignment contract;
and remove the
restrictions on cases of
transfer of real estate
project. Provide further
that approvals and
consents from the State
should be
automatically assigned
and transferred to, and
be received by the
receiving investor
without any further
procedures for re-
approval or for name
replacement if there is
no other change needed
in the content of the
approvals. In addition,
the transfer of project
is associated with the
transfer of land use
right, therefore, the Old
Draft LREB should
The criteria as
well as the
competent
authority for
approving the
assignment of the
project have been
addressed in
theNew Draft
LREB
Further, the
restriction on
numbers of cases
in which transfer
of real estate
project is
permitted has
been removed.
In addition, the
New Draft LREB
provides that the
assignees are not
required to
prepare the
project dossiers,
construction plan
and construction
permit if there is
no change under
the in principle
approval and
decision of
investment in the
project.
x 9 18

transferred and actually
has been transferred
(entirely or in part) to
another investor. This is
unnecessary in case there
is no change needed in
the content of the
approvals
provide regulations on
the conversion of the
form of land use from
land allocation to land
lease or vice versa in
case of transfer of
projects
N
o
Age
Issues
. i
Suggested/Agreed
Action
Progress 0 12
Priorit
y
Scor
e
except the name of the
investor. :
"
from domestic investors
to enterprises with
foreign owned capital,
and regulations on
whether the Certificate
of the assignees shall
reflect the origin of
land use being receipt
of transfer in
part/entirety of project
or the form after
converting to land lease
or land allocation.

46
Ne
w
Draft LREB: Real
estate business services
contract
The Old Draft LREB
provides that the
notarization/certificatio
n of real estate business
services contracts shall
be as agreed by the
parties. Since'the law
does not require
notarisation/
certification of real
contract, it is
unnecessary to specify
this which leads to
more confusion. Article
53.3 of the Old Draft
LREB provides that the
Government will
specify the content of
each type of real estate
business services
contracts. This is
unnecessary since
parties should be free to
the contracts according
to their needs. If at all,
the Government only
needs to specify the
main and essential
contents.
Remove the clause on
services contracts and
stipulate only the main
and essential contents
of real estate business
services contracts.
The New Draft
LREBstill remains that
the
services contracts shall
be as agreed by the
parties.
The New Draft LREB
has recognised our
recommendation in the
previous report by
insertinga provision on
main content of a real
contract, instead of
providing that the
Government will
each type of real estate
business services
contracts.
X 3 0
47
Ne
w
Draft LREB: Market
price
The Old Draft LREB
provides that a
valuation of real estate
must be based on the
market price at the time
of valuation. However,
it is unclear what
"market price" is and
Provide clear
regulations on what is
"market price" and the
method for determining
market price.
The real estate
valuation business has
been removed from the
New Draft LREB.
X 9 0

how to determine
market price at the time
of price valuation.
DRAFT LAW ON RESIDENTIAL HOUSING I
48 Old
Article 131 of the Law
on Residential Housing
("LRH"), restricts the
lease of
Allow all resident and
non-resident foreign
individuals and
organizations to
159.1 of the New Draft
LREB, only foreign
x 7 7
No Age Issues
Suggested/Agreed
Action
Progress 0 1 2 Priority Score 1
residential property to
those foreign
organizations and
individuals permitted
to stay in Vietnam for
a period of 71 3
months. Purchasing
residential property is
likewise restricted by
Resolution
19/2008/NQ-QH12,
art. 2, to very few
classes of foreign
individuals — those
with direct investment
in Vietnam, those
honored by the
President or Prime
Minister, those
educated and working
in desirable technical
fields, those married
to Vietnamese
citizens, and non-real
property foreign
enterprise that have
employee housing
needs.
own and lease all types
of property with the
same term as applied to
Vietnamese.
individuals who
are permitted to
enter Vietnam will
have the right to
own houses in
Vietnam. We are
of the view that
this condition is
unnecessary and
can lead to
confusion.
Further, the
foreign entities'
rights are restricted
by the maximum
number of units of
apartment/ houses,
and the term of
ownership is 50
years at maximum
which may be
extended in
accordance with
laws.
We suggest
removing above
restrictions.

49 New
Draft LRH:
Recognizing
ownership over
residential houses
The Old Draft LRH
provides that the State
shall only recognize
the ownership rights
of purchasers by
issuance of a
Certificate. This will
not be done for the
investors. This will
cause difficulty to
investors who invest
in construction of
houses for sale where
there is a large
number of unsold
houses, and who
invest in construction
of houses for lease-
purchase while
waiting for the lessee-
purchaser to pay the
price in full. In
particular, the
investors are restricted
from having the rights
to mortgage
residential housing
units the construction
of which have been
completed but not yet
being issued with the
Certificate in order to
raise capital.
Provide that the State
shall issue the
Certificate to investors
at the request of
investors which
construct residential
houses for lease, for
sale but have not
successfully sold them,
or for lease- purchase
but have not received
the payments in full
from the lessees-
purchasers.
Addressed in
Article 9 of the
New Draft LRH
X5 10 X
50 New
Draft LRH:
Ownership over
Provide that owners of
houses shall have the
right
Not addressed in
the New Draft
LRH.
x 9 0
No Age Issues
Suggested/Agreed
Action

houses v
l
The Old Draft LRH
fails to provide the
multiple ownership
and common use
rights in respect of
common areas in the
houses projects (such
as swimming pools,
gymnastic rooms),
which currently exist
in many projects of
investment in
construction of
houses.
of multiple ownership
and common use rights
in respect of common
areas in the residential
projects if so agreed
between owners and
developer.
51 New
Draft LRH: term of
ownership of
apartment building
There is a proposal in
the Old Draft LRH to
define the term of
ownership of
apartment unitson
construction level and
conclusion on
evaluation of quality
of construction.
According to the draft
provision, apartment
unit owners are
required to surrender
their apartment units
and land to the
authorities at the end
of the ownership term
so that the apartment
building can be
demolished. The
apartment owners will
be resettled by the
State. This shall have
a very negative impact
on the housing market
This provision should
be rejected swiftly.
Not addressed in
the New Draft
LRH.
x 10
0
I
!

on the whole and
create great
dissatisfaction among
apartment unit owners.
52 New
Articles 14, 160 and
163 of the Old Draft
LRH: Rights of
owners of residential
houses
There is a significant
improvement in the
Old Draft LRH where
rights of owners of
residential houses are
adjusted so that
Domestic Entities and
Foreign Entities have
more equal rights.
However there still
exists the
discrimination among
rights of owners being
domestic organisations
and individuals and of
Vietnamese residing
overseas and foreign
organisations and
Remove the
discrimination between
domestic organisations
and individuals,
Vietnamese residing
organisations and
individuals with respect
to residential housing
ownership.
According to the
New Draft LRH,
the foreign entities’
rights are restricted
by the maximum
number of units of
apartment/ houses,
the maximum
tenure of ownership
as mentioned in
Item 48 above.
Aside from such
restrictions, there is
no discrimination
between domestic
organisations and
individuals,
Vietnamese
residing overseas
and foreign
organisations and
individuals with
respect to
x 8 8
No Age Issues
Suggested/Agreed
Action
Progress 0 1 2 Priority
Score
1

individuals regarding
their ownership over
residential houses.
Particularly, in
comparing with
rights of domestic
organisations and
individuals,
Vietnamese residing
organisations and
individuals are
lacking in the
following rights: to
lease-purchase; to
own residential
houses other than
residential houses in
commercial
residential housing
project; to lend
residential houses, to
permit others to
reside with them; to
make capital
contribution by
residential houses; to
exchange residential
houses; to request to
recognise the
ownership over
residential houses
which are lawfully
created; and to own
residential houses on
a long-term and
stable basis.
residential housing
ownership.
53 New
Draft LREB and
Articles 20, 32, 36,
37 and 42of the Old
Draft LHR: Social
houses
The draft- laws
provide that the
investors have to
Provide that the
investors shall not be
obliged to reserve a
land area for housing
construction with
completed technical
infrastructure within
the project for
constructing social
Not addressed in the
New Draft LRH.
X 9 0

reserve a land area
for housing
construction with
completed technical
infrastructure within
the project for
constructing social
houses. This
provision may impact
the housing market
and create
dissatisfaction among
investors.
houses, but they may
choose other methods
such as contributing in
cash, arranging another
land area in other
project, or making
coordination with the
investor of other
project to jointly
contribute social
residential houses.
54 New
Articles 47 and 60of
the Old Draft LRH:
Sale of commercial
residential houses to
the State
The Old Draft LRH
does not clarify if
investors of
commercial
residential houses are
required to sell
commercial
the State to be used
as official residential
houses or residential
houses for
resettlement upon
request or not. if this
is
This should be
provided as agreements
between the State and
investors.
The New Draft LRH
hasrecognised our
recommendation in
the previous report
by removing the
provision on selling
price of commercial
the State.
X 8 16
No Age Issues
Suggested/Agreed
Action
and is detrimental to
investors.

55 New
Draft LRH: Warranty
of residential houses
The Old Draft LRH
provides that the main
structural part of a
residential house shall
be beams, pillars,
floors, ceilings, roof,
walls, pavings, tilings
and plasterings. In
practice, if the parts
being the pavings,
tilings, plasterings are
also deemed as the
main structure and
thus are guaranteed in
accordance with the
current provisions,
e.g. 60 months for
apartment buildings
from 9 floors or more,
it is too onerous to the
investors.
Remove the parts being
the pavings, tilings,
plasterings from the
main structure part of a
residential house.
Not addressed in
the New Draft
LRH.
X 5 0
56 New
Draft LRH: Unilateral
termination of
performance of
residential housing
lease contract
The Old Draft LRH
provides regulations
on the unilateral
termination of
performance of
residential housing
lease contract.
However, the Civil
Code also governs this
issue. Furthermore it
should be agreed by
the parties to decide
on this.
Remove this provision.
Not addressed in
the New Draft
LRH.
X
i
6 0
LAND EXECUTIVE SUMMARY
Prepared by Land Sub - Group

1. RIGHTS OF FOREIGN ENTITIES
a. Unlike domestic investors, foreign investors are not allowed to undertake the following
real estate business activities:
i. purchase houses or construction buildings for sale, lease or lease-purchase;
ii. invest in the construction of technical infrastructure works on allocated land, land from
assignment or lease, land under lawful using right for assignment or lease of land already
having technical infrastructure thereon. The right to invest in construction of technical
infrastructure works on leased land is provided under the existing laws but will be
removed;
iii. assign land use rights in the allocated land in the form of land plots. This is inconsistent
with the Land Law;
iv. lease land from other organisations or individuals to invest in construction of houses,
construction works for sale, sublease or lease purchase; and
v. lease land already having technical infrastructure works for sublease.
b. Foreign individuals and organisations who do not have real estate business functions are
not allowed to sub-lease office space which they have been leased/ purchased.
c. Restrictions and conditions for foreign entities to own houses in Vietnam:
i. Only foreign individuals who are permitted to enter Vietnam will have the right to own
houses in Vietnam;
 Some inequality still exists in the rights to acquire, own and deal with residential houses
between the foreign and domestic organisations or individuals as the foreign entities'
rights are restricted by the maximum number of units of apartments/houses, the
maximum tenure of ownership and the purpose of use of the houses.
We suggest removing the inequalities stated above and to provide foreign organisations and
individuals with the same rights as the domestic organisations and individuals.
2. REGISTRATION OF SALE AND PURCHASE AGREEMENT OF APARTMENT
UNITS
The Law on Protection of Consumers' Rights has provided a very tedious application process for
the registration of the Sale and Purchase Agreement for apartment units and there are no
prescribed guidelines or rules on how the authority should vet the application documents
resulting in inconsistent application and unnecessary delays.
We propose to remove this requirement and implement a notification procedure instead.
3. TIME OF TRANSFERRING RESIDENTIAL HOUSING OWNERSHIP

The draft Housing Law proposes different points of time for the effectiveness of transfer of
residential housing ownership, subject to the type of transaction, which are inconsistent with the
Land Law and the Civil Code.
We propose to amend the effective time of the transfer of residential housing ownership, in all
types of transactions, to the time of registration of such transactions at the land used right
registration office to ensure consistency with the Land Law and the Civil Code.
4. ASSIGNMENT OF REAL ESTATE PROJECT
There are a lot of provinces which do not implement any transfer of project fully and in part due
to policy.
We would recommend that a clear instruction on the transfer of project, fully and in part, be
given to the Department of Construction and People's Committee in all provinces in Vietnam.
LAND POSITION PAPER
It has been an exciting year looking at the progress made in the new drafts Housing Law and
Real Estate Business Law which will replace the existing laws. Throughout the year, these 2
drafts have been reviewed and amended several times to further refine the laws in respect of
housing and real estate business.
However, there are provisions which can be enhanced further to provide more clarity and
enhance the real estate market. We would like to highlight some of the issues in the latest
amendments to those draft Housing Law and Real Estate Business Law and our
recommendations to resolve such issues.
1. RIGHTS OF FOREIGN ENTITIES AND DOMESTIC ENTITIES
Firstly, we would like to delve into the rights of the foreign entities and domestic entities. It
would be productive for us to look at the amendments made in the previous draft Real Estate
Business Law. In the previous draft, the foreign investors were given the rights to:
i. purchase and lease-purchase houses and construction works on the leased land for the
purpose of sub-leasing and lease-purchasing;
ii. invest in construction of technical infrastructure works on leased land to lease out the
land already having technical infrastructure works; and
iii. tease land already having technical infrastructure works for sublease.
However, all these rights have been removed in the latest draft.
Although the latest draft Real Estate Business Law allows the foreign investors to invest in the
construction of houses, construction works on leased land in industrial zones, industrial
complexes, export processing zones, high tech zones or economic zones for business in
accordance with the land use purpose, it is unclear whether they will be permitted to sell, lease or
lease purchase such property.
Further, the initial draft allows foreign individuals and organisations who do not have real estate
business functions to lease out office space areas which have been leased/ purchased by such

foreign individuals and organisations. However, such right has been removed in the latest draft
Real Estate Business Law.
Recommendation: We propose that the rights of foreign investors which were provided in the
previous draft as mentioned be reinstated.
In addition, we note that there are still some differences and inequalities between the scope of
operation of domestic investors and foreign investors in the field of real estate business. In
particular, foreign investors are not allowed to:
(i) purchase houses, construct buildings for sale, lease or lease-purchase;
ii. invest in construction of technical infrastructure works on allocatedland, landfrom
assignment or lease, land under lawful using right for assignment and lease of land already
having technical infrastructure thereon. The right to invest in the construction of technical
infrastructure works on leased land is provided under the existing laws but will be removed;
iii. assign land use rights in the allocated land in the form.of land plots which is inconsistent
with the Land Law;
iv. lease land from other organisations or individuals to invest in the constructionof houses,
construction works to sell, sublease, lease purchase; and
iv. invest in the construction of houses, construction works on land got from assignment and
land under lawful using right to sell, lease out, lease-purchase.
We now turn to the rights of the foreign entities and domestic entities provided in the draft
Housing Law.
The draft Housing Law provides that only Vietnamese residing overseas and foreign individuals
who are permitted to enter Vietnam will have the right to own houses in Vietnam. We are of the
view that this condition is unnecessary and can lead to confusion. We suggest removing the
qualification on that the Vietnamese residing overseas and foreign individuals must be permitted
to enter Vietnam so that any Vietnamese residing overseas or foreign individuals may own
houses in Vietnam.
Other differences are as follows:
i. Foreign entities are only allowed to purchase and lease-purchase houses not exceeding
30% of the total units in an apartment building or if there are many apartment buildings
in one ward, the government will have the authority to decide on the maximum number
of units which can be purchased, lease purchased and owned by the foreign entities;
ii. Foreign entities are only allowed to purchase and lease-purchase houses not exceeding
250 houses in one ward;
iii. The term of ownership for foreign individuals shall be 50 years (which may be extended)
and the term for foreign organizations shall be as recorded in the investment certificate;
and

iv. Foreign organizations can only use houses for the purpose of accommodation for their
staffs and are not allowed to use residential houses for leasing, office spaces or other
purposes.
Recommendation: We suggest removing all the inequalities and vesting in the Vietnamese
residing overseas and foreign organizations and individuals the same rights as the domestic
organizations and individuals.
2. REGISTRATION OF SALE AND PURCHASE AGREEMENT OF APARTMENT
UNITS
Secondly, we would like to highlight that the Law on Protection of Consumers’ Rights has
provided a very tedious application process for the registration of the Sale and Purchase
Agreement for apartment units. The authority is given 20 business days to vet through the
application documents and give comments to the applicant in respect of the application. In the
event that such application is not approved, the applicant has to prepare and re-submit all the
required application documents again and the authority will take another 20 business days to vet
through the documents. The same cycle of the application process will recur until the application
has been approved.
Further, there are no prescribed guidelines or rules on how the authority should vet the
application documents. In practice, the officers in charge will usually give their comments on the
application documents based on their personal opinion. This creates a lot of inconsistencies and
doubts on the requirements for the application documents and causes unnecessary delays.
Recommendation: We propose to remove the current application process and implement a
notification procedure instead.
Thirdly, the latest draft Housing Law proposes different points of time for the effectiveness of
the transfer of residential housing ownership, subject to the type of transaction. For instance:
i. In the case of purchase and sale, lease-purchase of housing between individuals and
individuals, the time of transfer of housing ownership is when the purchaser or the lease
purchaser has made adequate payment of such purchase or lease purchase of housing; and
In the case of capital contribution, donation or exchange of housing between individuals and
individuals, the time of transfer of housing ownership is when the donor or theexchanger of
housing has handed over such housing to the recipient of such donation or exchange,-
ii. in the case of purchase of housing between the investor and the purchaser, the time of
transfer of housing ownership is when the investor has handed over such housing to the
purchaser or lease purchaser; and
iii. In the case of inheritance of housing, the time of transfer of housing ownership is from
the opening of such inheritance in accordance with the taw on inheritance.

This provision is inconsistent with the provisions of Land Law and the Civil Code.
According to the current Land law, the time of transferring the land use rights in respect of
transactions of exchange, transfer, tease, sub-lease, bequeathal, donation, mortgage of land use
right, assets attached to the land, capital contribution by land use right, assets attached to the land
shall be the time of registering such transaction at the land use right registration office. Also, the
Civil Code stipulates that "the transfer of ownership rights with respect to real estate shall be
effective as from the time of registration of ownership" and "where the law requires that
ownership rights with respect to asset which is the subject matter of a contract for sale and
purchase must be registered, such rights shall pass to the purchaser upon completion of the
procedures for registration of the ownership rights with respect to such asset".
Recommendation: We propose to amend the effective time of the transfer of residential housing
ownership in all types of transactions provided in the draft Real Estate Business Law to the time
of registration of such transaction at the land used right registration office for the purpose of
ensuring it is consistent with the provisions in Land Law and the Civil Code to avoid any
confusion and related disputes.
4. ASSIGNMENT OF REAL ESTATE PROJECT
There are a lot of provinces which do not implement any transfer of project fully and in part.due
to policy.
Recommendation: We would recommend that a clear instruction on the transfer of project, fully
and in part, be given to the Department of Construction and People's Committee in all provinces
in Vietnam.
COMMENTS ON LAW ON RESIDENTIAL HOUSING - DRAFT 2014
Prepared by Mr. David Lim Head of Land Sub - Group
We would like to present our comments on amendments made in the the draft Law on
Residential Housing which shall replace the Law on Residential Housing No. 56/2005/QH11
("Draft RHL").
1. CONDITIONS TO OWN HOUSES IN VIETNAM
According to Articles 154.1 and 157.3 of the Draft RHL, only Vietnamese residing overseas and
foreign individuals who are permitted to enter Vietnam will have the right to own houses in
Vietnam. We are of the view that thisconditionis unnecessary and can lead to confusion.
Recommendation: We suggest removing the qualification on that the Vietnamese residing
overseas and foreign individuals must be permitted to enter Vietnam so that any Vietnamese
residing overseas or foreign individuals may own houses in Vietnam.
2. RIGHTS OF RESIDENTIAL HOUSING OWNERS
There is a significant improvement in the Draft RHL by adjusting rights of housing owners being
foreign organisations and individuals so that domestic organisations and individuals, Vietnamese
overseas and foreign organisations and individuals have more equal rights in acquiring, owning
and dealing with residential houses.

Accordingly, foreign entities including foreign organisations and individuals owning houses in
Vietnam by way of purchase, lease- purchase, donation, or inheritance shall have the same rights
given to the domestic organisations and individuals. However, there are certain discriminations
that still exist:
i. Foreign entities may only own residential houses in residential housing development
projects located at the areas, which do not limit or prohibitthe ownership of the
residential houses by foreign residents. We note however that the Draft RHL fails to
provide the areas which limit or prohibit the ownership of the residential houses by the
foreign residents;
ii. Foreign entitiesare allowed to purchase and lease-purchase houses with a higher price
than the price provided by the Government from time to time;
iii. Foreign entities cannot own but only receive the value of the houses if the houses are not
within a commercial residential project;
iv. Foreign entitiesare only allowed to purchase and lease-purchase houses not exceeding
30% of total units in an apartment building or 250 houses in an administrative division;
v. The term of ownership in case of foreign individuals shall be 50 years (which may be
extended), or the term as recorded in the investment certificate including its extension in
case of foreign organisations. Please note that according to the initialdraft, the maximum
term of ownership for foreign organisations and individuals is 70 years, which can be
extendable; and
vi. Foreign organisations can only use houses for the purpose of accommodation for their
staffs and are not allowed to use residential houses for leasing, office spaces or other
purposes.
As we have expressed our concerns for many times, the restrictions to foreign organisations and
individuals in owning residential houses in Vietnam shall restrict the access to several sources of
capital necessary to develop the real estate market and also cause significant impact to
investment activities in other fields in Vietnam.
Recommendation: In general, we suggest removing the above discrimination between domestic
organisations and individuals, Vietnamese residing overseas, and foreign organisations and
individuals with respect to residential housing ownership by vesting in the Vietnamese residing
overseas and foreign organisations and individuals all the rights as same as those of domestic
organisations and individuals. This again will allow the access to several sources and create
benefits in real estate field bringing big interest to Vietnam.
3. CONDITIONS TO BE MET TO BE ENTITLED TO DEVELOP COMMERCIAL
RESIDENTIAL HOUSES
Article 22.1 of the Draft RHL set out that foreign investors attending in development of
residential housings in Vietnam for the first time shall need to satisfy the following conditions (i)
being an enterprise or co-operative established and operating in accordance with the provisions
of law; and (ii) Having sufficient legal capital and capital for placing deposit and carrying out
each residential housing development project in accordance with the law concerning real estate
business. Similar conditions to be met to act as investors of projects for upgrading, re-
constructing apartment buildings are also set out in Article 112.3 of the Draft RHL. Please note

that these provisions currently cause difficulties to investors being foreign, individuals and
organisations who make investment in Vietnam for the first time. Pursuant to the laws on
investment, a foreign investor who makes investment in Vietnam for the first time must have an
investment project to be entitled to establish an enterprise and obtain an investment certificate.
However, these provisions require foreign investor who makes investment in Vietnam for the
first time to set up a company before it can be engaged in a project as required by the laws on
investment. The vicious cycle of procedure and these overlapping provisions have caused many
investment activities of foreign investors impractical in reality, made the Ircence issuing
authorities confused, caused big obstacle and delay to several real estate projects in general and
commercial residential housing development projects in particular.
RecommendatiomWe suggest replacing.the current provisions under Article 22.1 and 112.3 of
the Draft RHL by the following:
"Being an enterprise or co-operative established and operating in accordance with the provisions
of Vietnamese law except for investors being foreign individuals and organisations who make
investment in Vietnam for the first time;
Having registered to conduct real estate business in accordance with the laws on real estate
businessexcept for investors being foreign individuals and organisations who make investment in
Vietnam for the first time;
Having sufficient legal capital and capital for placing deposit and carrying out each residential
housing development project in accordance with the law concerning real estate business."
4. RESPONSIBILITY FOR CONSTRUCTING SOCIAL RESIDENTIAL HOUSES
Pursuant to Article 15.1 and Article 17.3 of the Draft RHL, an investor of a project for
commercial residential housing development must reserve a certain area for residential housing
construction in the project for which the technical infrastructure system has been invested and
constructed for construction of social residential houses in accordance with the regulations of the
Government. Article 54.3 provides that the investor must reserve at least 20% of the land area for
lease of social housing.
Please note that pursuant to Articlel5.3 of the Draft RHL, social residential houses in urban areas
of special type, type 1 and type 2 must primarily be apartment buildings. According to that, the
requirement that investors of individual residential housing projects, particularly high- class villa
projects, must reserve 20% of the land area for construction of apartment buildings to be used as
social residential houses is inappropriate and impractical. It is realised from the practice that
investors of projects for commercial residential housing development must_not necessarily
reserve [land/house] from the land funds, housing funds right under their projects for commercial
residential housing development for constructing social residential houses tobe handed over to
the State, but the investors may choose other methods such as (i) to arrange another land area in
other location equivalent to 20% of the land fund under the concerning project to construct social
residential houses, (ii) to exchange [value of] 20% of such land fund under the concerning
project to a monetary amount to be paid to the budget so that the local authorities may actively
use such amount to invest in development of social residential houses in the locality in
compliance with the zoning plans; or (iii) to associate with the investor of other project to jointly
contribute social residential houses on the land area on which the project of associated investor is
carried out.

Recommendation: We suggest adding the provision that the investors shall not be obliged to
reserve [land/house] from the land funds, housing funds right under their projects for commercial
residential housing development for constructing social residential houses, but they may choose
other methods such as make contribution by monetary payment, by arranging another land fund
in other projects, or associate with investor of other project to jointly make contribution, to
Articles 15.1,17.3 and 543 of the Draft RHL.
5. RECEIPT OF ADVANCE PAYMENT BY CUSTOMERS
 Advance payments for purchase and sale of social housesto be formed in the future
Pursuant to Article 61.5 of the Draft Housing Law, the advance payment for purchase and sale of
social houses is conducted in accordance with the sale and purchase agreement andthe
construction progress of social houses, but must not exceed 70% of the value of the house before
handover of such residential houses and 95% of the value of the house before issuance of the
Certificate.
We are of the view that the restriction on the maximum advance payment is unnecessary and
should be removed since it should be decided and agreed between the parties.
Recommendation: We suggest amending Article 61.5 of the Draft RHL as follows: “withrespect
to the sale and purchaseof social houses to be formed in the future, the investors shall be entitled
to receive advance amounts paid by customers according to the housing construction progress
subject to negotiation and agreement with customers".
b. Advance payments for lease of residential houses to be formed in the future
There should also be a clear provision that advance payments can be collected for lease of
residential houses to be formed in the future.
Recommendation: We suggest adding a provision to mention about the lease of residential
houses to be formed in the future, including commercial and social houses.
Pursuant to Article 13of the Draft RHL, the time of transferring residential housing ownership
shall be effective as from different point of time subject to each type of transactions. In
particular,
i. where it is purchase and sale, lease-purchase of housing between individuals and
individuals, the time of transfer of housing ownership is when the purchaser or the lease
purchaser has made adequate payment of such purchase or lease purchase of housing;
ii. Where it is capital contribution, donation or exchange of housing between individuals
and individuals, the time of transfer of housing ownership is when the donor or the
exchanger of housing has handed over such housing to the recipient of such donation or
exchange;
iii. Where it is purchase or tease purchase of housing between the investor and the purchaser
or lease purchaser, the time o~f transfer of housing ownership is when the investor has
handed over such housing to the purchaser or lease purchaser;

iv. Where it is inheritance of housing, the time of transfer of housing ownership is from the
opening of such inheritance in accordance with the law on inheritance.
Please note that according the current law on land, the time of transferring the land use right in
respect of transactions of exchange, transfer, lease, sub-lease, bequeathal, donation, mortgage of
land use right, assets attached to the land, capital contribution by land use right, assets attached
to the land shall be the time of registering such transaction at the Land use right registration
office. Atso, the Civil Code stipulates that "the transfer of ownership rights with respect to real
estate shall be effective as from the time of registration of ownership" and "where the law
requires that ownership rights with respect to asset which is the subject matter of a contract for
sale and purchase must be registered, such rights shall pass to the purchaser upon completion of
the procedures for registration of the ownership rights with respect to such asset". Therefore, we
request that the provisions on transfer of ownership in the Draft RHL must be consistent with the
provisions of the taw on land and the Civil Code so as not to cause confusion to parties involving
in transactions and competent bodies when disputes on time of transferring ownership arise.
Recommendation: We suggest amending Article 13of the Draft Housing Law in the direction
that the time of transferring the ownerships in all transactions shall be the time of registering the
transaction at the Land use right registration office or the time of issuance of the Certificate to
purchasers, lessees-purchasers, recipients of donation, recipients of houses in housing exchange
transactions, recipients of bequeathal, recipients of capital contribution for the purpose of
consistency with- the provisions provided for in the law on land, the law on enterprises and the
Civil Code.
7. RESIDENTIAL HOUSING CONTRACTS
Article 118.2of the Draft RHL provides that notarisation/certification is required in case of sale
and purchase donation, exchange, capital contribution, mortgage of residential housing except
for the case where (i) donation of donated houses; (ii) capital contribution by the organisations;
(iii) assignment of residential housing sale and purchase agreements; (iv) leasing, lending,
permitting others to reside with them, authorizing another person to manage [their residential
houses] shall not be required to be notarized/certified except where the parties wish to do so.
We note that according to Article 66.3 of the previous draft, notarisation/certification is also not
required for the case where enterprises conducting real estate business or housing management
agency selling, leasing and lease-purchasing residential houses. This exception, however,has
been removed from this Draft RHL.
Recommendation: We suggest amendingthis provision so that notarisation/certification is not
compulsorily required which is a more convenient and favourable to the investors.
8. WARRANTY
Article 86.4 stipulated that the main structural parts of a residential house shall be beams, pillars,
floors, ceilings, roof, walls, pavings, tilings, plasterings.
In practice, if the parts being the pavings, tilings, plasterings are also deemed as the main
structure and thus are guaranteed in accordance with the current provisions, e.g. 60 months for
apartment buildings from 9 floors or more, it is too onerous to the investors.

Recommendation: We suggest the drafting committee re-consider and remove the parts being the
pavings, tilings, plasterings from the main structure.
c. AREAS UNDER COMMON OWNERSHIP
Article 11.1 of the Draft RHL provides that owners shall have the ownership over the residential
houses and have the right to jointly use the public facilities works within that housing
development, it is however unclear what public facilities works include.
Recommendation: We suggest having further clarification on what public facilities works
include.
d) FINANCING FOR RESIDENTIAL HOUSING DEVELOPMENT
Article 65of the Draft Housing Law is provisions in which list out forms of financing for
developing residential houses. We suggest removing these provisions since in view of the current
difficult real estate condition, investors should be encouraged to mobilise capital from any
sources permitted by law in accordance with the provisions in relevant laws. Therefore, the
listing of sources of capital and forms of financing which the investors are permitted to mobilise
in this Article is unnecessary and causes difficulties as well as restricts the investors from
mobilising capital for their projects.
Recommendation: We suggest removing Article 65of the Draft RHL.
e) TRANSITIONAL PROVISIONS
There should be transitional provisions to deal with on-going residential housing projects
pursuant to the old law regarding the satisfaction of conditions stated in this law.
COMMENTS ON THE DRAFT LAW ON REAL ESTATE BUSINESS
Prepared by Mr. David Lim Head of Land Sub - Group
We would like to present our comments on amendments made in the draft Law on Real Estate
Business which shall replace the Law on Real Estate Business No. 63/2006/QH11 ("Draft
LREB").
1. PERMITTED SCOPE OF REAL ESTATE ACTIVITIES AVAILABLE TO FOREIGN
INVESTORS
The Draft LREB has recognised our recommendation in the previous report by inserting a
number of rights of the foreign investorswho conduct real estate business. In particular, Article
8.3(d) of the Draft LREB provides that the foreign investors are allowed to purchase and lease
houses and construction works on the leased land for the purpose of leasing and lease-
purchasing. We note that this is an additional right for the foreign investors to purchasethe
construction works in Vietnam.
The Draft LREB however does not deal with the situation where the foreign investors wish to
sell the houses or construction works purchased when they no longer need them. This issue arises
because there is still the difference and inequality between the scope of operation of domestic
investors/ Vietnamese residing overseas and foreign investors in the field of real estate business.
In particular, foreign investors are not allowed (i) to purchase houses, construction buildings,
which are on all types of land and not only limited to leased land, for sale, lease, lease-purchase;
and (ii) to invest in construction of technical infrastructure works on allocated land, land got
from assignment, land under lawful using right for assignment, lease of land already having
technical infrastructure thereon.

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