Regulations on conditions on the Company’s legal capital What is a real estate joint stock company? need to note

What is real estate business?

According to the provisions of Clause 1, Article 3 of the Law on Real Estate Business 2014 as follows:

“Article 3. Interpretation of terms

In this Law, the following terms are understood as follows:

1. Real estate business is the investment of capital to carry out construction activities, purchase, transfer for sale, transfer; lease, sublease, lease purchase of real estate; provision of real estate brokerage services; flooring services real estate transactions; real estate consulting services or real estate management for profit.”

What is the legal capital when establishing a real estate business joint stock company?

According to the provisions of Article 10 of the Law on Real Estate Business 2014 (amended by Point a, Clause 2, Article 75 of the Law on Investment 2020) as follows: as follows:

“Article 10. Conditions of organizations and individuals doing real estate business

1. Organizations and individuals doing real estate business must establish enterprises or cooperatives (hereinafter referred to as enterprises), except for the cases specified in Clause 2 of this Article;

2. Organizations, households, and individuals selling, transferring, leasing, If you lease and purchase real estate on a small scale or occasionally, you do not have to establish a business but must declare and pay taxes according to the law.”

Based on the above legal regulations, currently the law does not require legal capital conditions when establishing a real estate business. Therefore, you can establish a real estate business joint stock company when meeting the legal conditions and without having to have a charter capital of 20 billion VND.

What are the latest regulations on conditions for a Joint Stock Company to conduct real estate business?

A joint stock company established to conduct real estate business must meet the provisions in Article 4 of Decree 02/2022/ND-CP as follows:

“Article 4. Conditions of organizations and individuals doing real estate business real estate

1. Organizations and individuals doing real estate business must have the following conditions:

a) Must establish an enterprise according to the provisions of the law on enterprises or a cooperative according to the provisions of the law on cooperatives, with real estate business (hereinafter collectively referred to as enterprises);

b) Must publicize on the enterprise’s website, at the headquarters of the Project Management Board (for real estate investment and business projects), at the real estate trading floor (in case of business through a real estate trading floor) information about the enterprise (including name, head office address, contact phone number, name of legal representative), information about real estate put into business according to the provisions of Clause 2, Article 6 of the Law on Real Estate Business assets, information on mortgages of houses, construction works, real estate projects put into business (if any), information on the quantity and type of real estate products being traded, the quantity and type of real estate products sold, transferred, leased and purchased and the remaining quantity and type of products that are continuing to be traded.

For information that has been made public as prescribed in this Point and is subsequently changed, it must be promptly updated immediately after the change;

c) Only trade in real estate that meets the conditions prescribed in Article 9 and Article 55 of the Law on Real Estate Business.

2. In case an investor is selected to be the investor of a real estate project according to the provisions of law, that investor must have equity not less than 20% of total investment capital for projects with land use scale of less than 20 hectares, not less than 15% of total investment capital for projects with land use scale of 20 hectares or more. When conducting real estate business, the project investor must meet the conditions specified in Clause 1 of this Article.

The determination of equity specified in this Clause is based on the results of the most recent audited financial statement or the results of the independent audit report of the currently operating enterprise (conducted in the year or the immediately preceding year); In case of a newly established enterprise, the owner’s capital shall be determined according to the actual charter capital contributed according to the provisions of law.”

Accordingly, real estate eligible for business as prescribed in Article 9 of the Law on Real Estate Business 2014 includes:

“Article 9. Conditions of real estate put into business

1. Houses and construction works put into business must meet the following conditions:

a) Have registered ownership of houses and constructions attached to land in the certificate of land use rights. For existing houses and construction works in real estate investment projects, only a certificate of land use rights is required according to the provisions of land law;

b) There is no dispute over land use rights, ownership of houses or construction works attached to land;

c) Not subject to distraint to ensure execution of judgment.

2. Types of land permitted for land use rights trading must meet the following conditions:

a) Have a certificate of land use rights according to the provisions of land law;

b) There is no dispute over land use rights;

c) Land use rights are not distrained to ensure judgment enforcement;

d) During the land use term.”

Real estate formed in the future must meet the conditions specified in Article 55 of the Law on Real Estate Business 2014 to be put into business, specifically:

“Article 55. Conditions of real estate formed in the future to be put into business

1. Have documents on land use rights, project documents, construction drawing designs approved by competent authorities, Construction Permit in cases where a Construction Permit is required, documents on acceptance of completion of construction of corresponding technical infrastructure according to project progress; In the case of an apartment building or mixed-use building with residential purposes formed in the future, there must be a record of acceptance of the completed foundation of that building.

2. Before selling or leasing future housing, the investor must notify the provincial housing management agency in writing that the housing is eligible to be sold or leased.

Within 15 days from the date of receipt of the notice, the provincial housing management agency is responsible for responding in writing to the investor regarding housing eligible for sale or lease-purchase; In case of ineligibility, the reason must be clearly stated.”