New foundations for real estate deals

New foundations for real estate deals - Vietnam Investment Review

The recent National Assembly session passed the Law on Enterprise, Law on Investment, Law on Residential Housing and Law on Real Estate Business. These new laws contain provisions which help to create a more transparent, consistent and conducive legal environment for domestic and foreign real estate investors alike.

These provisions should help revitalise the real estate market by paving the way for investment and mergers and acquisitions. David Lim, managing partner at Zicolaw Vietnam outlines the main provisions in the new laws.

The real estate sector has been an attractive investment field. However, it is also a challenging sector due to restrictions and complicated rules imposed on investors and real estate transactions. It is important to understand the new provisions in laws to take advantage of the investment opportunities provided. 

From now, 05 year visa will be granted for the foreign investors in Vietnam

With the enforcement of the Law on Entry, Exit and Residence of Foreigners in Vietnam No. 47/2014/QH13 dated 16 June 2013 by the National Assembly of Vietnam (“Law No. 47/2014”), as from 01 January 2015, the foreign nationals who have the business investment in Vietnam may be granted a 05 year visa.  Previously, the foreign nationals were only allowed to obtain one year visas and three years residency cards.

Under the Law No. 47/2014, the foreign investors in Vietnam who are eligible will be issued a visa named “ĐT” which has the duration of maximum 05 years. A temporary residence card will be accordingly considered for issuance to those who have got this type of visa. The Law No. 47/2014 also allows the foreigners that are parents, spouse, children under 18 years of age of the foreigners issued with a ĐT visa to receive the same treatment.

In order to be considered as the foreign investor in Vietnam, the foreign nationals must qualify for the definition of foreign investor under the Law on Investment in Vietnam and also obtain an investment certificate for their business investment in this country.

Engaging in securities service business in Vietnam

According to the commitments made to the World Trade Organization (WTO) during its 2007 accession, Vietnam only allow the foreign investor to enter into Vietnamese market in respect to the service under the list up which Vietnam committed to open. In the case of not subject to the list, Vietnam has the right to decide to allow a foreign investor to access the market or not on the basis of case by case. That is subject to the approval of the Prime Minister or the managing Ministries depending on the investment capital scale, type of service.

At present, Vietnam did commit on opening up securities service sector under the WTO commitments, accordingly, after 5 years from the date of accession (i.e. January 11th 2007), the foreign investor is allowed to engage in securities service business with establishment of 100% foreign invested capital enterprises and for some limited services, the branches of foreign securities services suppliers shall be permitted. Therefore, the foreign investor from a WTO member country generally speaking, can freely acquire minority/majority shares in domestic enterprises; establish a wholly – owned subsidiary or a branch in Vietnam.

How does the appeal process work in Vietnam?

Under the Penal Proceeding Code of Vietnam, the appeal process will be applied when the first-instance judgments or decisions in such cases are appealed or protested against before they become legally valid.

Under the applicable regulations, the entitled persons, e.g. defendants, victims and their lawful representatives, civil plaintiffs, civil defendants and their lawful representatives, etc… will be entitled to appeal while the procuracy bodies shall have the right to protest against first-instance judgments or decisions.

In case of appeal or protest, the appellants or protestants must send their written appeals to the courts within fifteen days after the date of pronouncement of judgments and the competent court of appeal must open appellate court sessions within sixty days for provincial-level court; within ninety days for Supreme People’s Court after receiving the case files. The appellants must send their written appeals to the courts within fifteen days after the date of pronouncement of judgments. The late appeals may be accepted if plausible reasons can be given that are reviewed and decided by the trial panel of the court of appeal.