Although the Law on Real Estate Business 2014 was promulgated, it expanded the scope of real estate business of foreign investors compared to the law of real estate business before. However, when compared to the scope and form of real estate business of domestic investors, foreign investors are still significantly restricted. Specifically, pursuant to Article 11 of the Law on Real Estate Business 2014, foreign investors may only conduct real estate business in the following forms: Lawyers consult on real estate projects
– Rent houses or constructions for sub-lease;
– For land leased by the State, they are allowed to invest in the construction of dwelling houses for lease; To invest in building houses or constructions which are not houses for sale, lease or lease purchase;
– Receive the transfer of a whole or part of the real estate project of the investor for the building houses and constructions for sale, lease or lease purchase;
– For land allocated by the State, they are allowed to invest in the construction of dwelling houses for sale, lease or lease-purchase;
– For land leased in industrial parks, industrial clusters, export processing zones, hi-tech zones and economic zones, they may invest in the construction of houses or construction works for proper use purposes.
Therefore, the important business activities that foreign investors are not allowed to perform compared with domestic investors are:
First: buy houses, constructions for sale, lease, lease purchase. Foreign investors are not allowed to buy for reselling, for lease but they can only lease the real estate for sub-lease;
Second: foreign investors are not allowed to transfer their land use rights in the form of subdivision, sale of land, construction of technical infrastructure of cemeteries and graveyards to transfer land use rights associated with that infrastructures.
From the above regulations, it can be seen clearly that the laws of our country now only allow foreign investors to trade real estate in the form of investment construction projects, not allowed to invest in the “buy and sell” as domestic investors. This partly reflects the policy of lawmakers for the opening of the real estate market to foreign investors. On the other hand, the lawmakers want to attract foreign investment to improve the gloomy and frozen real estate markets of the past few years and also to limit their scope of activities to avoid foreign investors with large capital can absorb the market.
However, with the demand of the market economy, it is necessary to attract foreign investment and to create competition within domestic businesses. Therefore, the laws should be improved more openly to foreign investors to attract investment to meet the demand for housing, as well as real estate in our country nowadays.
Vietlaw Solutions Firm.