REAL ESTATE LEGAL MATTERS IN VIETNAM

In general, it is not permitted to own land in Vietnam as a private entity because the land belongs to the people and the State of Vietnam thereby operates as the administrator.

However an ownership of a right to use land is permitted according to Vietnamese Law.  This so-called Land Use Right (“LUR”) Certificate provides the means to lease land from the State for Vietnamese and foreign people.  This LUR Certificate entitles the land users to protect their legitimate rights and interests.  The sale of a house or real estate is in fact the transfer of the rights for house ownership combined with the transfer of the land from the seller.  The right to use land can be directly acquired by different ways that are: lease from the state; sub-lease from a developer of a zone; transfer from another land user; allocation from the state.  The legal grounds for Land and House Law of Vietnam are stipulated in the Law on Housing 2005 of Vietnam as well as in the Law on Land 2003.  The rights and entitlements of holders of house ownership and the holders of the LUR Certificate are settled in this law.

According to Article 12 of the Law on Housing 2005, the name of the individual who holds the house ownership shall be written in the house ownership right certificate and his/her rights are stipulated in Article 21 that include for example the rights to posses; use; sell; lease; donate; exchange; lend or to let other people stay temporarily in the house.  As stipulated in Article 106 of the Law on Land 2003, the one who holds the LUR and house ownership certificate is entitled to exercise the full range of rights over the land/house. As such, land use rights and ownership of assets on the land are combined in the Certificate of Land Use Right and House Ownership Right (LURC).

But the possibilities to acquire land or houses depend on the individual/organization that wishes to do so, because Vietnamese, overseas Vietnamese and Foreigners do not have the same rights.  Especially for foreigners, it was often quite challenging to acquire land or houses in Vietnam. Before the year of 2009, foreigners could not legally acquire property but only could make a joint venture with a Vietnamese company. But the Resolution No. 19/2008(ND-QH12, effective January 2009, started to entitle foreigners to own houses in Vietnam under the conditions that the foreigner 1) is hired by an enterprise that currently operates in Vietnam and 2) must have at least a temporary residence card to purchase and own an apartment unit in Vietnam. This five-year piloting program that would end in 2014 is now discussed by the Vietnamese Prime Minister to continue this program after the first five years to support the real estate market and to make it more attractive for foreigners.

Even though about 80,000 expats live and work in Vietnam, only more than 400 cases of foreigners buying houses in Vietnam could be registered. Of course, this might be due to the difficulties for foreigners to buy houses before this pilot program . But this Resolution No. 19, which was guided by Decree No. 51/2009/ND-CP, still does not make it easy to operate in the real estate market in Vietnam for foreigners because of the complicated procedures to register ownership. After the first 5 years, the government stated to have the plan to review the pilot policy and the Ministry of Construction also opened up for the idea to allow foreigners to buy houses no matter if they work and do business here or if they want to buy real estates in Vietnam.

As the Vietnam’s real estate situation seems to stand before a turning point, it is necessary to keep up to date with all legal changes and developments. Due to the fact that Vietnamese law has special provisions for every organization or individual who wishes to operate with land and real estates related to House Law, it is inevitable to know about this legal circumstances in Vietnam.

ANT Lawyers could assist in different land and house related projects and matters such as land ownership, house purchase or sale and is aware of the differences between provisions on house law for foreigners and Vietnamese. Our professionals could advise clients about possibilities and potential risks concerning real estate laws, housing laws in Vietnam and furthermore could support clients with required procedures with the Vietnamese authorities.

ANT Lawyers constantly researches for the latest legal updates to ensure that we provide best and up-to-date services to clients whom are interested in real estate and and housing matters in Vietnam.

For advice or service request, please contact us via email ant@antlawyers.vn, or call +84 8 3520 2779.  To learn more about us, please visit www.antlawyers.vn.  

ANT Lawyers is a Vietnam law firm with international standards, recognized by IFLR1000 on Financial and Corporate practice.  We are an exclusive Vietnam member of Prae Legal, the global law firm network covering more than 150 jurisdictions.  The firm provides a range of legal services as following to multinational and domestic clients.

Commercial

Dispute Resolution

Debt Recovery

Employment

Foreign Investment

Intellectual Property

International Trade and Taxes

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ADDING FOREIGN SUBJECTS TO OWN RESIDENT HOUSES IN VIETNAM

The Draft Law on House (amended) has currently taken lots of attentions of not only investors but residents. One of the significant amendments is provision on house ownership of foreign organizations, individuals.

According to Articles 161, 162, 163 of Draft Law, there are 3 cases that the foreigners may own resident houses in Vietnam as following:

1. Foreign organizations, individuals invest the construct resident houses according to projects for sale, lease, hire-purchase sale.
2. Foreign owned enterprises, branches, representative offices of the enterprises without business in real estate, foreign investment funds and branches of foreign banks permitted to operate in Vietnam are entitled to buy, donate, inherit the commercial houses in projects of resident housesdevelopment, new urban areas, tourism real estate.
3. Foreign individuals who are allowed to enter Vietnam, not belong to incentive rights, diplomatic or consular immunity.

However, subjects at section 2 and 3 are eligible to own houses in maximum term of 70 years, from the issuance date and can extend according to laws at that moment. They are not allowed to buy and own social houses, just buy and own commercial houses. They are also eligible to own unlimited number of commercial houses in commercial resident house development projects, new urban area or tourism real estate. These new provisions will become important points for real estate market in Vietnam. Especially, the foreign individuals are allowed to enter Vietnam, entitled to buy and own resident houses in Vietnam. It’s expected to make a big change in real estate in Vietnam when the new Law on House (amended) is adopted. ANT Lawyers,your lawyers in Vietnam.

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10 QUESTIONS TO ASK BEFORE SETTING-UP COMPANY IN VIETNAM

Foreigners are encouraged to make investment in Vietnam through direct investment by Setting up company in Vietnam.

However there are restrictions in some cases in regard to investment capital, investment area, special licenses required. The investor is suggested to consult with a law firm in Vietnam for advice and service offering.

Before setting up business in Vietnam, ask yourself the following questions:

1. Which business should I invest in Vietnam?

There are non-conditional investment areas and conditional investment areas.  Establishing company in the non-conditional investement areas are more simple than in conditional investment areas.  Investment in IT services, manufacturing, management consulting, business promotion are a few samples of non-conditional investment areas.  Example of conditional investment areas are real estate, trading, travel agencies, freight forwarding…which are more complicated with investment conditions.  Investment conditions might also be changed over the time depending on the WTO commitments which Vietnam enters.

2. What should I name the business in Vietnam?
The company in Vietnam has to have Vietnamese name, and English name. The company could also have abbreviated name.  The name of the company in Vietnam indicates the structure of the company, the business lines, and the name that differentiate against other businesses.  For instance, the company could be named Alpha consulting limited liability company.

3. Where should I register the address of the business in Vietnam?
Not every address could be used to register a company.  The address has to be an address of a house with leasing agreement or office building which owner has license to operate as office building.

4. What is the legal structure of the company?
Depending on the number of investor contributing capital, company could be set-up as one member limited liability company or two ore more member limited liability company or joint stocks company.

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Forms of Investment in Vietnam

5. How much capital is required to set-up a company in Vietnam?
The investment amount depends on the business plan and is subject to the approval of the provincial Department of Planning and Investment evaluating application dossier. In some business areas like real estate, banking and finance, minimum capital is required. In general for non-conditional investment area, the law does not specify the minimum capital to establish a company in Vietnam however the State agencies that evaluate investment plan could reject the investment project which are not feasible. Bank statement in foreign banks could be used to prove sufficient fund of investment capital.

6. Whom will be legal representative and work permit in Vietnam?
The investor will need to appoint the legal representative in Vietnam to oversee the business performance and take legal responsibility in Vietnam. If the legal representative is an expatriate, whom is a capital contributing member or owner of a limited liability company or a member of the Board of Management of a shareholding company which is registered to operate in Vietnam, he or she will be exempted from work permit in Vietnam. Otherwise, he or she will need to have a work permit to work in Vietnam legally.  The work permit holder would then apply for temporary residence card to live in Vietnam as long as the work permit allows.

7. How long does it take to set-up a company in Vietnam?
It depends on what type, scale, and whether or not conditions are required. For a simple minimum capital without conditions to set-up, it would take 30 working days. For setting up company in conditional investment areas i.e.  trading company in Vietnam, time would be lengthen due to the involvement of a number of State agencies approving the investment project and it would take 60 working days. For setting up company in other investments in areas requiring conditions to meet, time might be taken depending on the type of conditions and the government agencies evaluating the conditions of investment.

8. Whom will be granting the investment license in Vietnam?
For most of the investment projects, the provincial state agencies with the approval of the Department of Planning and Investment (DPI) will be granting the Investment Certificate in Vietnam. However, depending on the type, scale, and whether or not conditions are required, other Vietnam State agencies might be involved. For the case of trading company, ministry of trade and commerce, ministry of finance, provincial people’s committee will be reviewing the investment application dossier as well.

9. What are the tax liability in Vietnam?
Major taxes in Vietnam are corporate income tax, import and export tax, value added tax, and personal income tax in Vietnam. In some special areas, there are other taxes. The corporate income tax is currently at 22% and will reduce to 20% beginning 2016. Export is mostly encouraged as such the export tax is 0 however there are special cases when export tax is larger than 0. Import tax varies according to tariff. Value added tax is mostly at 10% however in some cases, VAT could be 5% or 0%. Personal Income tax varies according to income level and is applicable from VND 9,000,000 above.

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Major Taxes in Vietnam

Personal Income Tax in Vietnam

10. What are mandatory reports submissions requirement in Vietnam?
Companies are required to keep accounting books, prepare and submit tax reports on monthly, quarterly and annually. Foreign companies are also required to have financial audit taken before the financial year end. The financial year in Vietnam is from January to December and the deadline to submit financial report is March 30th for the previous year. Other reports are required to be submitted at other State agencies.

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HOW TO HANDLE TRADEMARK INFRINGEMENT IN VIETNAM

Counterfeit destroys businesses, business environments, markets as well as the image of the country. Handling trademark infringement in Vietnam has been practically challenging.

Vietnam government has been trying to curb the counterfeits however the results are limited.  The counterfeit business generates huge profits due to the gap price anywhere in the world.   Almost goods which is either popular or luxury, high or low-value of either domestic or foreign brands are being counterfeited, imitated in Vietnam.  Falsification of household goods, food, cosmetics, shoes and items of higher value such as bags, watches, glasses, etc may be found all over Vietnam. For effective anti-counterfeit, we need a close cooperation among the authority agencies in inspection, control of production, import and circulation in the market.  The Southern Department of Goods Quality Control in Vietnam in one of its regular inspections when cooperating with competent agencies in Ho Chi Minh City found after checking 79 stores with 416 items including: oil, helmets, toys, electronic devices that 33.89% of goods of unsatisfactorily labeled, 14.5% unsatisfactory quality. Where the consumers buy counterfeit goods, they could and should report to State authorities, Anti-Counterfeit and Brand Protection Association as an effort to contribute to curbing counterfeit in Vietnam.  The international brands being infringed could request assistance from local law firms in Vietnam.

ANT Lawyers’ Intellectual Property lawyers in Vietnam have assisted a number of clients being foreign brands in its effort to protect their intellectual property and industrial property rights in Vietnam under Intellectual Property Law through advisory, and implementation service.

We could be reached at email: ant@antlawyers.vn or office tel: +848 35202779.

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HOW TO CLOSE A BUSINESS IN VIETNAM?

All corporations, companies, partnerships, branch offices, representative offices and other business entities are legal entities in Vietnam which can only be dissolved through formal procedures.

I. What are the major challenges with closing a business in Vietnam?

The main thing to remember throughout the process is that the dissolving company, a branch office or a representative office, one  should pay close attention to the involvement of all key stakeholders, i.e. the employees, customers, creditors, business partners and relevant authorities.

The following are key information to gather for thorough analysis

1. Company size in terms of capital and number of employees?

2. Enterprise’s business sector?

3. Tax invoice usage declaration?

4. Annual profit?

5. Compliance with tax procedures?

6. Administrative violations in the field of taxation?

7. Any outstanding tax?

8. Tax document filing records?

9. Other tax matters?

II. What does the dissolution process involve?

Once an analysis has been through, the next procedures mostly deal with reporting and submitting the relevant documents to the various regulatories and tax authorities at each step of the process, terminating contracts, liquidating assets and settling liabilities, and general administrative work such as returning the corporate seal, registration certificates, and having the company’s name removed from the system of the license authorities.

III) How to prepare document to close a business in Vietnam?

1. Documents submitted to the licensing authority in Vietnam:

1. Liquidation notice of enterprise;
2. Minutes of the meeting of Management Board / Board of Directors decided on the dissolution of enterprises;
3. The company’s decision on liquidation;
4. Report on enterprise asset liquidation;
5. The list of creditors and the paid debt;
6. Documents evidencing that enterprise has fulfilled all of its tax;
7. Confirmation on social insurance for employees after the dissolution decision;
8. The seal and certificate of seal sample registration.

2. Documents submitted to the tax authority in Vietnam:

1. Liquidation notice of enterprise;
2. Minutes of the meeting of Management Board / Board of Directors decided on the dissolution of enterprises;
3. The company’s decision on dissolution;
4. Audit reports and tax settlements;
5. The financial statements for the year to date the decision on dissolution;
6. The company’s tax liabilities audited by tax authority;
7. Verification of tax obligations of the enterprise.

Closing a business in Vietnam might be a lengthy process and more complicated than setting up a company in Vietnam.  Sometimes, it is important to make a decision to exit and start a new venture.  As a law firm in Vietnam, we do assist clients to close the business, exit the investment and deal with pending issues with licensing authorities including department of planning and investment, department of labour, tax bureau and others.

For advice or service request, please contact us via email ant@antlawyers.vn, or call +84 8 3520 2779.  To learn more about us, please visit www.antlawyers.vn.  

 

ANT Lawyers is a Vietnam law firm with international standards, recognized by IFLR1000 on Financial and Corporate practice, Legal500 as one of the reputable law firms.  We are an exclusive Vietnam member of Prae Legal, the global law firm network covering more than 150 jurisdictions.  The firm provides a range of legal services as following to multinational and domestic clients.

Commercial

Dispute Resolution

Debt Recovery

Employment

Foreign Investment

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VIETNAM LAW ON JUDICIAL RECORDS

Foreigners whom are working in Vietnam are suggested to apply and obtain crimial record card in Vietnam (or police check)before leaving the country as he/she might need it in the future for job application, immigration purposes, or marriages.

JUDICIAL RECORD CARD

Once left the country, he/she could still apply for judicial record card in Vietnam however the process will be longer and more complex.  In such cases, our lawyer in law firm in Hanoi or law firm in Ho Chi Minh City could assist to represent and apply for criminal record card in Vietnam on behalf of the client.  The law on judicial records are provided below for client’s reference.  The Vietnam law on judicial records provides the order of and procedures for provision, receipt and updateing of judicial or criminal record information, compilation of judicial or criminal records, and the issuance of judicial records or criminal records card in Vietnam.

—

Hanoi, June 17, 2009

LAW ON JUDICIAL RECORDS (No. 28/2009/QH12)

Pursuant to the 1992 Constitution of the Socialist Republic of Vietnam, which was amended and supplemented under Resolution No. 51/2001/QH10;

The National Assembly promulgates the Law on Judicial Records.

Chapter I: GENERAL PROVISIONS

Article 1. Scope of regulation

This Law provides for the order of and procedures for provision, receipt and updating of judicial record information; compilation of judicial records; organization and management of judicial record databases; issuance of judicial record cards; and state management of judicial records.

Article 2. Interpretation of terms

In this Law, the terms below are construed as follows:

1.Judicial record means a record of previous criminal conviction(s) of a person convicted under a criminal court judgment or ruling which has taken legal effect, the state of his/her execution of the judgment and a ban on this person’s holding of certain posts, or establishment or management of enterprises or cooperatives in case enterprises or cooperatives have been declared bankrupt by court.

2. Judicial record information on previous criminal conviction means information on an individual who has been convicted; his/her crime and applicable articles and clauses of law, principal and additional penalties, civil obligation in the criminal judgment, and court fee; date of judgment pronouncement, the court that has pronounced the judgment and serial number of the pronounced judgment; the state of judgment execution.

3. Judicial record information on ban on holding of certain posts, establishment or management of enterprises or cooperatives means information on an individual who is banned from holding certain posts, establishing or managing enterprises or cooperatives: posts subject to the ban, the duration in which he/she is banned from establishing or managing enterprises or cooperatives under the court ruling on bankruptcy declaration.

4. Judicial record card means a card issued by an agency managing the judicial record database and valid to prove whether or not an individual has a previous criminal conviction, is banned from holding certain posts, establishing or managing enterprises or cooperatives in case enterprises or cooperatives have been declared bankrupt by court.

5. Agencies managing the judicial record database include the National Center for Judicial Records and provincial-level Justice Departments.

Article 3. Purposes of management of judicial records

1. Satisfying the requirement of proving whether or not an individual has a previous criminal conviction or is banned from holding certain posts, establishing or managing enterprises or cooperatives in case enterprises or cooperatives have been declared bankrupt by court.

2. Recording the remission of previous criminal convictions, and facilitating the community reintegration by convicted persons.

3. Supporting criminal proceedings and the making of judicial statistics on crimes.

4. Supporting the personnel management, business registration, establishment and management of enterprises and cooperatives.

Article 4. Principles of management of judicial records

1. Judicial records shall be only made based on criminal court judgments or rulings which have taken legal effect; legally effective court rulings to declare enterprises or cooperatives bankrupt.

2. Assurance of personal privacy.

3. Judicial record information shall be adequately and accurately provided, received, updated and processed in strict compliance with the order and procedures provided in this Law. The judicial record card-issuing agency shall take responsibility for the accuracy of information in judicial record cards.

Article 5. Subjects of judicial record management

1. Vietnamese citizens who have been convicted under legally effective criminal judgments of Vietnamese courts or foreign courts, with excerpts of these judgments or their previous criminal convictions provided by competent foreign authorities under treaties on mutual legal assistance in criminal affairs or on the reciprocity principal.

2. Foreigners who have been convicted under legally effective criminal judgments of Vietnamese courts.

3. Vietnamese citizens and foreigners who are banned by Vietnamese courts from holding certain posts, establishing or managing enterprises or cooperatives under legally effective rulings on bankruptcy declaration.

Article 6. Responsibility to provide judicial record information

Courts, procuracies, civil judgment enforcement agencies, competent agencies of the Ministry of Public Security, judgment enforcement agencies of the Ministry of National Defense and concerned agencies and organizations shall provide the judicial record database-managing agencies with sufficient and accurate judicial record information in strict accordance with the prescribed order and procedures under this Law and other relevant laws.

Article 7. Right to request the issuance of judicial record cards

1. Vietnamese citizens and foreigners who resided or are currently residing in Vietnam may request the issuance of judicial record cards.

2. Procedure-conducting agencies may request the issuance of judicial record cards to serve the investigation, prosecution and adjudication work.

3. State agencies, political organizations and socio-political organizations may request the issuance of judicial record cards to serve the personnel management, business registration, establishment and management of enterprises or cooperatives.

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ENTERPRISE ESTABLISHMENT SERVICE IN VIETNAM

ANT Lawyers provides enterprise establishment consulting service for domestic and foreign customers as the following services:

Enterprise establishment service in Vietnam

• To consult to establish Joint Stock Company;
• To consult to establish One member Limited liability company;
• To consult to establish Limited liability Company with Two or more members;
• To consult to establish Partnership company;
• To consult to establish Private enterprises;
• To consult to establish Sole trader;
• To consult to establish foreign invested company;
• To consult to establish the parent company, corporations.

Customers procedures established in the ANT Lawyers will enjoy some preferential services such as:

1. Contents of enterprise establishment consulting service:

• To consult legal regulation related to the establishment, operation and management of enterprises;
• To consult to set up personnel structure of the company;
• To consult to select types of enterprises;
• To consult to choose the name of company (lookup and select the appropriate name as the request of customers);
• To consult about the head office of the enterprise;
• To consult on capital, legal capital, investment capital;
• To consult on business lines (lines requires legal capital , professional certification or other conditions);
• To draft legal dossiers for setting up the company  (Request for business registration, charter, founders list and other documents as prescribed by law);
• To consult for business on tax issues, financial obligations after the enterprise have been established and the process of production and business activities;

2. Our tasks in the enterprise establishment services:

ANTLawyers will on behalf of clients to perform the following tasks:

• Drafting and preparation the enterprise establishment dossier as regulations;
• To apply the dossier for business and tax codes registration in the Department of Planning and Investment;
• To monitor progress and inform regularly results to clients;
• To obtain the Investment Certificate from the DPI;
• Filing and registration the seal for Company at the Police Department;
• To obtain the seal and the certificate of the seal for the Company at the Police Department;
• To guide the customers to follow procedures in the relevant state authority (as needed);

3. Documents required to provide by clients:

• Information requested form of business;
• A copy of ID / passport of members / founding shareholder who is individual (notarized) ;
• A copy of business registration / establishment decisions of members / founding shareholders who is organization.

4. Client’s benefits after establishment:

• To be consulted and offered free the activating annual  tax dossier, records and procedures for billing the enterprise;
• To consult the necessary tasks  of the new enterprise;
• To consult human resources management  , provide free labor contracts and the forms of management personnel;
• To consult the procedures for salary scale registration, the social insurance registration of company;
• To consult on tax matters, tax refund, tax credit;

Please contact us for free advice and use the best service.

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LEGAL PROCEDURES POST LICENSING IN VIETNAM

After establishing a company in Vietnam, the compay has to perform a number of legal procedures for compliance purpose.

First, they have to declare the license tax. The tax declaration should be submitted to tax authorities. If the taxpayer has branch in the same province, the tax declarations of the branch should be submitted to the taxpayer’s tax authority. On the other hand, if the taxpayer has branch in another province, the tax declarations of the branch should be submitted to the tax authority of the branch. In case when the taxpayer does not have a permanent business location, the tax declaration should be submitted to the sub-department of taxation where the business is located or where the taxpayer resides. License tax is submitted annually and if the taxpayer has declared and paid license tax, he is not required to submit license tax declaration in the next year if the amount of license tax payable is not changed. In case the taxpayer amount of license tax payable in the next year is changed, tax declaration shall be submitted by December 31st of that year.

Second, the enterprise has to conduct the VAT (value added tax) declaration. The taxpayer that has just begun his business shall declare VAT quarterly. In the next calendar year after 12 months of business, VAT declarations shall be declared whether monthly or quarterly depending on the revenue from the sale of goods and/or services in the preceding calendar year (12 months). VAT shall be declared monthly or quarterly throughout the calendar year and the 3-year period. For example, the first stable period begins on October 1st, 2014 and ends on December 31st 2016.

Third is the CIT declaration (corporate income tax). The CIT declaration should be submitted to the supervisory tax authorities. According to business result, the taxpayer shall make the quarterly tax payment within 30 days of quarter succeeding the quarter in which tax is incurred; they shall not submit the provisional CIT declaration quarterly.

The fourth is the invoice printing. Before the placing first order for invoices, the company must send a written request for permission to use ordered invoices to the supervisory tax authority. Before the business uses invoices for its sale of goods and services, except for invoices purchased from or provided by the tax authority, the business have to send a notice of invoice publication together with a sample invoice to the tax authority.

Every quarter, seller of goods and services shall submit the invoice using report to the tax authority, even when there are no invoices have been used during the period. The report of the first quarter shall be submitted by April 30th, second quarter by July 30th, third quarter by October 30th, and forth quarter by January 30th of the next year. If no invoices are used during the period, the quantity of used invoices in the report shall be zero (0).

The fifth is the bank account. The opening of bank account to conduct transaction with customer is necessary because according to the ministry of Finance, the invoice valued of 20 million VND or above should be transferred through bank. Within 10 days from the day that enterprise opens bank account, the company have to notify the bank account number to the competent tax agency.

The sixth also the last one is labour and social insurance. If the contract between enterprise and employee has duration of over 3 months, it is subjected to compulsory social insurance.

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