7 Highlights in Recently Passed Vietnam Real Estate Law

 On November 28, 2023, with 465 out of 494 delegates participating in the vote of approval (making up a percentage of 94.13%), the National Assembly officially passed the amended Vietnam real estate law, which will come into effect on January 1, 2025.

This new Vietnam real estate law is a significant legislative project aimed at adapting to the development trends of technology and enhancing the efficiency of real estate resource management.

The following article will provide basic information on some key points of this Vietnam real estate law.

Types of Real Estates Allowed for Transaction in the Vietnam Real Estate Law:

The types of real estates permitted for real estate transaction under the amended Vietnam real estate law include:

Existing residential properties and those to be formed in the future.

Existing construction works and those to be formed in the future, including constructions serving purposes such as education, healthcare, sports, culture, offices, commerce, services, tourism, accommodation, industry, and mixed-use constructions.

Land use rights with existing technical infrastructure in real estate projects.

Real estate projects.

Additional Principles in Real Estate Service Business, Real Estate Exchange Activities in the Vietnam Real Estate Law:

The 2023 Vietnam real estate law supplements principles in real estate service business, the organization and operation of real estate exchanges, real estate transactions through real estate exchanges, conditions for managers operating real estate exchanges.

Addition of Conditions for Real Estate Consulting Services, Real Estate Management Services in the Vietnam Real Estate Law:

The 2023 Vietnam real estate law adds conditions for organizations and individuals engaging in real estate consulting services and real estate management services, including rights and obligations of parties involved in real estate consulting services, the scope, and principles of real estate consulting and management services.

Regulations on Real Estate Business Rights for Vietnamese Nationals Residing Abroad in the Vietnam Real Estate Law:

For Vietnamese nationals residing abroad, in order to ensure consistency with the spirit of the Land Law (amended draft), the National Assembly Standing Committee has revised the regulations. Vietnamese nationals residing abroad, as defined by Vietnam nationality laws, have the right to engage in real estate business in Vietnam, including buying, renting, or leasing residential and construction properties, similar to Vietnamese citizens within the country. The existing policies for overseas Vietnamese not recognized as Vietnamese citizens remain unchanged.

Regulations on Conditions for Future Residential and Construction Projects in the Vietnam Real Estate Law:

The National Assembly Standing Committee suggests that the government regulates in detailed decrees under the Vietnam real estate law, directing provincial-level state management agencies for real estate business to assess the conditions of housing projects for business and respond in writing to investors regarding the eligibility of housing for sale or lease, taking responsibility for the issued documents.

Regulations on Down Payments in Real Estate Transactions in the Vietnam Real Estate Law:

Regarding down payment regulations in residential and construction business transactions in the future, to ensure an accurate representation of the essence of down payments and reduce risks for buyers, especially the weaker party, the amended draft Vietnam real estate law states that project developers can only collect a deposit of up to 5% of the sale or lease price for residential properties, construction works, or the floor area within the construction project. This payment can only be collected from customers when the residential or construction project meets all the conditions specified by this Vietnam real estate law.

The deposit agreement must clearly state the sale or lease price for residential properties, construction works, or the floor area within the construction project.

Real estate projects on paper can only be put up for real estate transaction when there is one of the documents related to land use rights, such as land allocation decisions, land use right certificates, ownership of residential properties, and land use rights…

Regulations on Payment for Real Estate Sales in Future Residential Business in the Real Estate Law:

Regarding payments in transactions for houses to be formed in the future, the new Vietnam real estate law has stipulated that customers will pay 95% of the contract value, with the remaining amount paid when they are granted the land use right certificate and ownership of the property.

As a result, customers retain a portion of the contract value during the waiting period for the issuance of the land use right certificate and property ownership.

On the part of the project developer, they must fulfill financial obligations (land rent, taxes, fees related to land) before transferring the entire or part of the real estate project.

Additionally, the project developer must have a decision on land use, lease, or permission to change the land use purpose, but not necessarily a land use right certificate for the entire or part of the transferred project.

How Real Estate Attorney in Vietnam Could Help Buyer or Seller under Vietnam Real Estate Law?

A real estate attorney in Vietnam can play a crucial role in facilitating and safeguarding the interests of both buyers and sellers in real estate transactions under the Vietnam real estate law.

Attorney For Real Estate Buyers in Vietnam:

Legal Due Diligence:

Conducting thorough legal due diligence on the property to ensure there are no legal issues or disputes associated with it.

Verifying the ownership status and the legitimacy of the seller.

Document Review:

Reviewing and interpreting contracts, agreements, and other legal documents associated with the property transaction.

Ensuring that all necessary documents, such as land use rights certificates, are in order.

Negotiations and Contract Drafting:

Assisting in negotiations with the seller to secure favorable terms.

Drafting or reviewing the purchase agreement to protect the buyer’s interests and ensure legal compliance.

Title Search:

Verifying the property’s title and ensuring it is clear of any encumbrances or legal issues.

Confirming that the seller has the legal authority to sell the property.

Financial Considerations:

Advising on financial aspects, such as taxes and fees associated with the property purchase.

Assisting in understanding and complying with financial regulations related to real estate transactions.

Legal Representation:

Providing legal representation in case of any real estate disputes in Vietnam under Vietnam real estate law or legal challenges that may arise during or after the transaction.

Attorney For Real Estate Sellers in Vietnam:

Preparation of Legal Documents:

Assisting in the preparation of all necessary legal documents for the sale of property in Vietnam.

Ensuring compliance with local real estate laws and regulations.

Disclosure Requirements:

Advising on the legal obligations of sellers to disclose relevant information about the property.

Helping sellers avoid legal liabilities by ensuring proper disclosure.

Negotiations and Contract Drafting:

Negotiating on behalf of the seller to achieve favorable terms.

Drafting or reviewing the sales agreement to protect the seller’s interests.

Title Clearance:

Resolving any issues related to the property’s title to ensure a clear transfer to the buyer.

Clearing any encumbrances that may affect the sale.

Tax Implications:

Providing guidance on tax implications associated with the sale of the property.

Advising on strategies to minimize tax liabilities.

Closing Procedures:

Facilitating the closing process and ensuring that all legal requirements are met.

Overseeing the transfer of ownership and ensuring proper registration.

Legal Representation:

Offering legal representation in case of real estate disputes in Vietnam under Vietnam real estate law or challenges that may arise from the sale.

About ANT Lawyers, a law firm in Vietnam

We help clients overcome cultural barriers and achieve their strategic and financial outcomes, while ensuring the best interest rate protection, risk mitigation and regulatory compliance. ANT lawyers has lawyers in Ho Chi Minh city, Hanoi, and Danang, and will help customers in doing business in Vietnam.

Readmore: https://antlawyers.vn/update/highlights-in-new-vietnam-real-estate-law.html

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Due Diligence of Real Estate Transactions: A Necessity in Purchasing Real Estate. 5 Reasons

 

In the ever-evolving landscape of real estate law, Vietnam has recently passed significant amendments that reshape the framework for real estate transactions within the country. These changes not only expand the opportunities for investors and property buyers but also introduce new regulations and conditions that demand rigorous compliance. This development underscores the critical importance of undertaking due diligence of real estate transactions, a process that involves thorough investigation and verification of all aspects of a property deal before finalization.

This article delves into the key highlights of the amended Vietnam real estate law and explores why due diligence of real estate transactions is indispensable for navigating this complex legal terrain.

Understanding the Amended Vietnam Real Estate Law

The recently amended Vietnam real estate law effective from 2025 introduces several pivotal changes and additions that impact various facets of real estate transactions. Among the notable updates are:

1. Expanded Scope for Real Estate Transactions: The law now encompasses a broader range of real estate types eligible for transactions, including existing and future residential properties, construction works with diverse functional purposes, and land use rights within real estate projects.

2. Enhanced Regulations for Real Estate Service Business: New principles governing real estate service business, the operation of real estate exchanges, and the conditions for managers operating these exchanges have been introduced, aiming to streamline and regulate the sector more effectively.

3. Additions to Real Estate Consulting and Management Services: Conditions for engaging in real estate consulting and management services have been specified, outlining the rights, obligations, and operational scope for service providers and clients.

4. Inclusive Real Estate Business Rights: The law acknowledges the rights of Vietnamese nationals residing abroad to participate in real estate business activities in Vietnam, aligning with the spirit of the Land Law and ensuring equal opportunities.

5. Regulatory Framework for Future Projects: Detailed decrees are suggested to guide the evaluation and approval of residential and construction projects, emphasizing the responsibility of state management agencies in the process.

6. Down Payment Regulations: To protect buyers and reduce transaction risks, the law caps down payments at 5% of the property sale or lease price, contingent on the project meeting specified conditions.

7. Payment Structure for Future Residential Business: The law mandates a payment structure that allows customers to retain a portion of the contract value until the issuance of necessary ownership certificates, ensuring financial security for buyers.

The Imperative of Due Diligence of Real Estate Transactions

Given the complexities and the broad scope of the amended Vietnam real estate law, due diligence of real estate transactions emerges as a fundamental practice for all parties involved.

Here’s why:

– Risk Mitigation: Due diligence of real estate transactions enables investors and buyers to identify and assess potential risks associated with property transactions, such as legal encumbrances, compliance issues, and financial obligations.

– Legal Compliance: With the introduction of new regulations and conditions, due diligence of real estate transactions ensures that all aspects of a real estate transaction are in full compliance with the amended law, avoiding legal complications post-transaction.

– Financial Security: Through thorough investigation, parties can verify the financial health of real estate projects and the credibility of developers, safeguarding their investments from fraudulent or financially unstable ventures.

– Informed Decision Making: Due diligence provides a comprehensive understanding of the property, its legal status, and market potential, enabling informed decision-making and investment strategies.

– Consumer Protection: For buyers, particularly in the context of down payments and future residential business transactions, due diligence is crucial for verifying project eligibility and ensuring the protection of their financial interests.

The recent amendments to Vietnam’s real estate law mark a significant step towards modernizing and expanding the real estate market in the country. However, they also introduce a complex set of regulations and conditions that necessitate a meticulous approach to real estate transactions.

The practice of due diligence of real estate transactions is not just a recommendation but a necessity in this context. It ensures compliance, mitigates risks, and protects the interests of all parties involved.

As the real estate landscape continues to evolve, the importance of due diligence of real estate transactions will only grow, serving as a cornerstone for secure, transparent, and successful real estate endeavors in Vietnam.

ANT Lawyers, law firm in Vietnam

We help clients overcome cultural barriers and achieve their strategic and financial outcomes, while ensuring the best interest rate protection, risk mitigation and regulatory compliance. ANT lawyers has lawyers in Ho Chi Minh city, Hanoi, and Danang, and will help customers in doing business in Vietnam.

Readmore: https://antlawyers.vn/update/due-diligence-of-real-estate-transactions.html

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What Criminal Violations in Stock Exchange in Vietnam?

 Along with the increasingly diversified securities activities, the criminal violations in the stock market are also becoming more and more sophisticated and complex. The securities lawyer in Vietnam is sharing some opinions on the practice of criminal violations in stock exchange in Vietnam to avoid.

Although in Vietnam, violations and crimes committed in the securities sector still account for a small percentage compared to other fields, but these white collar crimes have directly negatively affected trading activities in the market, in particular eroding investors’ confidence, and causing the stock market distortion.

The criminal violations in the stock market could hinder the efficient functioning of the stock market which is a component of a free-market economy, where enterprises raise funds and investors invest and trade. Vietnam is a developing economy and it is getting more serious on prosecuting this crime due to the large scale negative impacts to the financial market.

There are four violations in the securities sector that are defined as crimes, which are: Provision of false information or concealment of information in securities activities; Use of internal information for trading securities; Manipulation of securities market and Forging documents in offering or listing profile as follows:

Provide false information

The law in Vietnam charges person who deliberately provides false information or conceals information in the activities of offering, listing, trading securities, market organization, registration, depositing, clearing or paying for securities. The fine for such activities will be from VND 100,000,000 to VND 2,000,000,000 or up to 02 years’ community sentence or 03 months – 5 years’ imprisonment. Punishments incurred by a corporate legal entity that commits the offenses shall be fined from VND 500,000,000 to VND 5,000,000,000; be banned from operating in certain fields or raising capital for 01 – 03 years.

How insider trading in Vietnam is treated?

Insider trading is also considered a crime in Vietnam but its seriousness has not been emphasized strongly enough as compared with other countries with developed financial market.

Over the 20 years since the stock market in Vietnam has been established, insider traders have not been found or charged yet although the law states that any person who has information about a public company or public fund which has not been published and could remarkably affect securities price of that public company or public fund but and uses such information to deal in securities or discloses it or provides it for another person for trading securities shall be liable to a fine from VND 500,000,000 to VND 2,000,000,000 or face a penalty of 07 months – 03 years’ imprisonment. Punishments incurred by a corporate legal entity that commits the offenses shall be fined from VND 1,000,000,000 to VND 10,000,000,000.

For some reasons, in Vietnam, it has been disputed that there are challenges to prove the crime in the stock market that make the practice of investigating and charging insider trading crime difficult.

Manipulation of stock market in Vietnam

Manipulation of stock market could be in the forms of fraudsters using one or more security accounts linked to each others, to set buy or sell orders in significant volume that create unusual and fake supply and demand, to lure other small investors in great quantity to make buy and sell decisions and the fraudster later benefit by exiting their shares at high price.

Or the fraudster could use pump and dump scheme to manipulate the stock market by spreading misleading information that create a buying frenzy of the stocks to “pump” prices and later “dump” their shares at inflated price.

The the fine for the individual committing the crime is ranging from VND 500,000,000 to VND 4,000,000,000 or a penalty of 06 months – 07 years’ imprisonment; the penalty for the legal entity committing the crime is a fine ranging from VND 2,000,000,000 to VND 10,000,000,000; can be permanently shut down or be banned from operating in certain fields or raising capital for 01 – 03 years depending on the severity of the violation. Recently these criminal activities have been most popular in Vietnam and a number or cases have been prosecuted.

Forging documents

Forging documents in offering or listing profile criminal is a stock market crime in Vietnam. The law states that any person who forges documents of the offering or listing profile shall be liable to a fine of from VND 500,000,000 to VND 2,000,000,000 or face a penalty of 06 months – 07 years’ imprisonment. In addition, the offender might also be liable to a fine of from VND 50,000,000 to VND 250,000,000, be prohibited from holding certain positions because of such criminal record in Vietnam or doing certain works in related fields for 01 – 05 years.

Securities lawyer in Vietnam to distinguish signs of criminal behaviour or administrative violations

There are also disputes among law makers, legal experts and lawyers in Vietnam on whether there are criminal violations or not; or wherether there are administrative violations, or economic or civil violations for acts that could have signs of criminal behaviours. These kinds of arguments are important to help the society to find balance and defend justice in the development of economy and stabilization of the financial market in Vietnam.

Nguồn:https://antlawyers.vn/library/what-criminal-violations-in-stock-exchange-in-vietnam.html

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How to Make a Joint Will of Husband and Wife under Vietnam Laws?

    How a will lawyer in Vietnam could help?

Under Vietnam culture, marriage is a special relationship that is not considered as a contract. Hence it could become a delicate matter when material comes into play. And talking about death while still living might trigger emotional reaction especially the concerning matters could arise is how to make a will for the assets owned by husband and wife.

We have come across such situations and as a will lawyer in Vietnam, we could help the potential client to understand the need to have a will and have the estate planning. But to get a will and statement service in Vietnam for a joint will or separate will could also be a question. The following will discuss the matter in details.

In fact, a few spouses desire to make joint will to dispose of their common assets. The prevailing law does not yet stipulate joint testament of husband and wife. Hence how to proceed with the application of law for the cases where husband and wife intend to make joint testament?

Legal grounds for joint will and statement in Vietnam

In the legal document system, the “joint testament of husband and wife” was most recently stipulated in the Civil Code 2005, which has now been superseded by the Civil Code 2015. Accordingly, it can be understood that: a joint testament of husband and wife is an expression of the will of the spouses intending to transfer the common assets of the spouses to another person after the death of both husband and wife. With regard to joint testament of husband and wife, the Civil Code 2005 devotes three articles stipulating particulars of this type of testament including concept; amendment, supplementation, replacement, cancellation; legal effect.

Under the abovementioned understanding, after the Civil Code 2005 expires, among prevailing legal documents, especially the Civil Code 2015 directly regulating inheritance and testament by its sphere, there is no provision on “joint testament of husband and wife”. Thus, the joint testament of husband and wife is not recognized but also not prohibited by the law.

Therefore, it is possible to apply the law for cases where spouses intend to make “joint testament of husband and wife by the understanding of the Civil Code 2005” after the Civil Code 2005 is no longer valid as follows:

Joint testament of husband and wife as a type of testament

According to the basic principles of civil law, individuals shall establish, perform and terminate their civil rights and obligations on the basis of free, voluntary undertaking, agreement; any undertaking or agreement which does not violate a prohibition of law or is not contrary to social morals shall be binding on the parties and be respected by other subjects; the establishment, performance and termination of civil rights and obligations may not infringe upon national or ethnic interest, public interest, or legitimate rights and interest of other people.

Accordingly, husband and wife are completely free to agree on the making of a testament that expresses the joint will of both husband and wife towards common assets but must comply with the law on testament.

As such, to be protected as a legitimate testament and as a legitimate testament under Civil Code 2015, apart from general regulations on testament, the joint will of husband and wife shall comply with following regulations:

Firstly, to be a legitimate testament:

First, common will shall first be a testament as provided by law, which is for the purpose of transferring the common assets of husband and wife to other people after the death of both husband and wife.

Second, the testament shall satisfy the criteria of legitimate testament, including: i) the testator was of sound mind when he/she made the testament; and he/she was not deceived, threatened or coerced; ii) the contents of the testament do not contravene the prohibition of law or contrary to social morals; the testament shall be made in writing, it may be made orally if it is unable to be made in writing.

The testament of the incapacitated or the illiterate shall be made in writing notarized or certified by a witness. A written testament which is not notarized or certified shall be deemed lawful only if the testator is of sound mind when he/she made the testament; and he/she was not deceived, threatened, coerced; contents of the testament does not breach the prohibition of law, not contrary to social morals; formality of the testament complies with the law.

An oral testament shall be deemed lawful only if the testator orally expressed his or her last wishes before at least two witnesses who recorded those wishes in writing and signed or fingerprinted the document immediately after the testator orally expressed his or her last wishes. Such testament must be certified by a notary public officer or an authorized agency, verifying signatures or fingerprints of the witnesses within five working days of the of expressing the last wishes.

Secondly, to amend, supplement, supersede, cancel:

Testators may amend, supplement, supersede or cancel the testament at any time, as a result, spouses may amend, supplement, supersede, cancel the made testament at any time upon mutual agreement.

Thirdly, the time of effectiveness:

The testament shall come into effect as of opening the inheritance. On the other hand, the time of opening the inheritance shall be the time when the testator dies. Therefore, the time of effectiveness of the joint testament shall be from when both husband and wife die.

Joint testament of husband and wife as a conditional contract.

Also based on the free, voluntary undertaking, agreement of civil law subjects, husband and wife have right to make a civil contract agreeing on the disposal of common assets that may occurring rights and obligations of the third person; meanwhile, defining the specified event where both husband and wife die as the time of commence of the contract and it is not obliged for the contract to be implemented by spouses themself. As such, to be protected and as protected as a civil contract, the joint testament of husband of wife shall comply with civil contract law.

Firstly, to be the conditional contract as provided by law:

As a civil contract, the joint testament of husband and wife shall be the agreement between husband and wife on occurrence, modification, or termination of rights, obligations to the common assets of husband and wife.

Hereunder rights and obligations may occur to the third person, must not be performed by husband and wife themselves. Not an ordinary civil contract, the joint testament of husband and wife is a conditional contract under whereby the performance depends on the occurrence, modification, or termination of a certain event. Thus, in this contract, husband and wife will agree on the time of division of the common assets.

Secondly, to amend, supplement, supersede, terminate, cancel:

As provided by contract law, husband and wife may negotiate to amend, supplement the joint testament. Spouses may also agree on replacing the made joint testament by a new joint testament after terminating the made joint testament or completely terminating the joint testament in accordance with regulations on contract termination. The notable point of cancelation, termination of the joint testament as a contract is the fact that husband and wife may unilaterally cancel, terminate in accordance with law.

Thirdly, the time of effectiveness:

Not as a testament, stated contract may take effect as of the time of entering contract or the time upon mutually agreed, nevertheless, the effectiveness of the contract is inherently not critical as the establishment, change, and termination of common assets.

For that reason, it is understood that the contract shall take effect from the time as mutually agreed by both husband and wife, otherwise as the time of entering contract. Despite that, apart from the effectiveness of the contract, spouses must also concur on the time of division of the common assets. It is noteworthy that for the purpose of division of the bequests, the abovementioned time shall not fall in the time when it is stated to divide the common assets of husband and wife during the marriage period as prescribed by law on marriage and family.

Application of law to resolve matters relating husband and wife joint testament

Not provided by law, in cases where spouses desire to make joint testament but it is neither applicable for by abovementioned provisions nor agreed upon by the parties, customs can be applied but the customs must not contravene the basic principles of civil law.

If practices are unavailable, provisions of the law governing analogous civil relations shall be applied. Where analogous law cannot be applied, the basic principles of civil law, case law or equity shall be applied.

In short, because the law leaves open joint testaments of husband and wife, thus, husband and wife who have the will to execute a joint testament shall freely agree in the form of a testament or conditional according to the corresponding provisions. For related issues that are not reached with an agreement, customary practices, analogy of law, basic principles of civil law, case law, and equity shall be sequentially applied to resolve. The individuals are recommended to consult with a will lawyer in Vietnam to help with will and statement service in Vietnam under Vietnam laws.

Nguồn:https://antlawyers.vn/will-lawyer-in-vietnam/how-to-make-a-joint-will-of-husband-and-wife-under-vietnam-laws.html

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How Dispute Settlement Mechanism of ASEAN Work?

 As economic cooperation has expanded, having an effective mechanism to resolve disputes arising between member countries has become an essential need. Therefore, since 1996, ASEAN has started drafting a Protocol on Dispute Settlement Mechanism, and this Protocol was signed by ASEAN Economic Ministers on November 20, 1996 in Manila (Philippines).

The dispute settlement mechanism of ASEAN is built on the spirit of negotiation and mediation. At any time, Member States which are parties to the dispute have the right to choose forms of mediation. These forms may begin or end at any time. Only when the procedure for mediation has ended, the complainant proceeded to bring the matter to the Senior Economic Officials Meeting of ASEAN (SEOM). While the dispute is in progress, if the parties to the dispute agree, mediation procedures will continue to apply.

If the consultation does not resolve the dispute within sixty (60) days of the receipt of the request, the matter will be referred to SEOM. SEOM will set up a panel or, if possible, refer the matter to the special rules and procedures team or additional for review. However, in specific cases, if deemed necessary, SEOM may decide to resolve the dispute amicably without having to appoint a panel.

SEOM will review the panel report during its discussion and give a decision to the dispute within thirty (30) days from the date the panel submitted the report. In exceptional cases, SEOM may have an additional ten (10) days in adjudicating a dispute. SEOM representatives of Member States who are parties to the dispute may be present during the discussion but may not participate in judgments of SEOM. SEOM will adjudge on a majority basis.

Member States that are parties to the dispute may appeal the judgments of SEOM to the ASEAN Economic Ministers (“AEM”) within thirty (30) days. AEM must make a decision within thirty (30) days of the appeal. In exceptional cases, AEM may have an additional ten (10) days to make a decision on dispute resolution.

Nguồn: https://antlawyers.vn/library/how-dispute-settlement-mechanism-of-asean-work.html

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