Real estate business and development projects: conditions for developers, what foreign-invested companies may do, off-plan sales and bank guarantees, transfers of projects, investor selection for housing, condotels, and the structures foreign developers use

The legal framework for real estate business

Law No. 29/2023/QH15 on Real Estate Business was passed on 28 November 2023 and took effect on 1 August 2024, together with the Land Law and the Housing Law. It is implemented mainly by Decree No. 96/2024/ND-CP, which details the conditions for real estate businesses and sets the model contracts, and Decree No. 357/2025/ND-CP, which from 1 March 2026 governs the housing and real estate market information system. Real estate business, meaning investing in, building, buying or taking transfers of property in order to sell, transfer, lease, sublease or lease-purchase it for profit, together with real estate brokerage, trading floors, consultancy and management services, is a conditional business line under Article 7 of the Law on Investment, and real estate is among the lines open to foreign investors only on conditions in Appendix I of Decree No. 96/2026/ND-CP (Market access for foreign investors).

The Ministry of Construction and provincial Departments of Construction regulate the market. Land for projects is obtained under the Land Law (How foreign-invested companies access land), and housing and urban projects need investment policy approval under Article 24 of the Law on Investment before land is allocated or the investor selected (Investment policy approval).

Conditions for real estate businesses and developers

Under Article 9 of the law, an organisation or individual carrying on real estate business must establish an enterprise or cooperative; only individuals trading on a small scale, as defined by the Government, may do so without one, declaring and paying tax. The enterprise must not be in a situation that bars it from business, and must publish information about itself and the properties it offers on its website and through the national information system.

A developer of a real estate project must also meet financial conditions. Article 9(2) requires equity of not less than 20% of total investment capital for a project using less than 20 hectares and not less than 15% for a project using 20 hectares or more, and Decree No. 96/2024/ND-CP limits the ratio of the developer's outstanding credit and corporate bonds to its equity and sets how equity is evidenced, generally by audited financial statements or an independent audit report on the capital. The developer must have been selected or recognised as the investor of the project under the investment and land laws. Equity must cover all of a developer's projects in aggregate, which is one reason developers use a separate company for each development.

Real estate service businesses have their own conditions. A brokerage must have at least one person holding a real estate brokerage practising certificate and must register its information before operating, individual brokers must work within a service enterprise, and payments in real estate business must be made through bank accounts. Real estate businesses are reporting entities under Law No. 14/2022/QH15 on Anti-Money Laundering and must identify customers and report suspicious and large transactions (FAQ 86).

What a foreign-invested company may do

Article 10 of the law sets the forms of real estate business open to each kind of investor. Vietnamese organisations and individuals may use every form. A foreign-invested company that must follow the foreign-investor conditions and procedures under the Law on Investment, broadly one more than 50% foreign-owned (The Law on Investment 2025), may: build houses and other construction works for sale, lease and lease-purchase, on land allocated or leased to it under the Land Law; invest in technical infrastructure within real estate projects for transfer or lease; take a transfer of all or part of a real estate project to continue its development; and lease houses or works in order to sublet them. A foreign-invested company at or below the 50% threshold may use the same forms as a Vietnamese company.

The practical gaps for a majority foreign-owned company are that it develops rather than trades: it cannot buy completed houses or buildings from others simply in order to resell them, and it cannot take transfers of land use rights for residential plots outside a project. It may, however, act as the developer of residential, commercial, office, industrial, tourism and mixed-use projects, sell and lease the product, and provide real estate services.

Off-plan sales, deposits and bank guarantees

Most residential projects are financed in part by sales of off-plan units, which the law calls housing formed in the future. Article 24 sets the conditions before such units may be sold, leased or lease-purchased: the project must have been approved for the purpose of building for sale or lease-purchase, the land documents must be in place and the land use levy or rent paid, construction must have started under the construction law with a construction permit where required, the land must be free of disputes and seizure, the project information must have been published, and the provincial housing authority must have confirmed in writing that the units are eligible for sale. A developer may take a deposit only once the project meets the conditions for business, and of no more than 5% of the price, under an agreement stating the price and floor area (Article 23(5)).

Article 25 caps payments. The first payment may not exceed 30% of the contract value, including the deposit; later payments follow construction progress, and the total before handover may not exceed 70%, or 50% where the seller is a foreign-invested company within Article 10(4), that is, one following the foreign-investor procedures; and until the buyer receives the certificate the seller may collect no more than 95%, the final 5% being paid when the certificate issues. For lease-purchase the first payment is also capped at 30% and prepayments at 50%. Article 26 requires the developer to obtain a guarantee from a commercial bank or foreign bank branch for its obligations to buyers of off-plan housing, so that buyers are repaid if the developer fails to deliver on time. The guarantee cost, the cap on pre-handover receipts and the equity rule together determine how much of a project a foreign developer must fund itself or through project finance (Project finance, security and the financial centre).

Bringing off-plan units to market

1. Complete the project approvalsInvestment policy approval with the developer approved or selected, IRC, land allocation or lease decision, and the detailed plan; the approval must state the purpose of building for sale or lease-purchase.
2. Pay land obligations and start constructionPay the land use levy or rent, obtain the construction permit where required, and start construction under the construction law.
3. Publish project informationPublish the project, the legal documents and the units offered on the developer's website and the national information system.
4. Obtain the bank guaranteeArrange a guarantee from a commercial bank or foreign bank branch covering the developer's obligations to off-plan buyers under Article 26.
5. Obtain the provincial confirmationApply to the provincial housing authority for written confirmation that the units are eligible for sale; only then take deposits, capped at 5%.
6. Sign contracts on the model and collect paymentsUse the model contracts in Decree No. 96/2024/ND-CP, collect payments by bank transfer within the Article 25 caps, and hand over and apply for buyers' certificates on completion.

Transfers of real estate projects

A developer may transfer all or part of a real estate project to another investor, which then steps into the developer's position, under Articles 39 to 42 of the law. Article 40 sets the conditions. The project must have investment policy approval or equivalent approval and a selected or recognised investor, an approved detailed plan and completed compensation and resettlement, and, for infrastructure projects, the related infrastructure built; the land must be free of disputes, seizure and transaction bans, any mortgage must be released, the project must not be suspended, terminated or subject to a recovery decision, and it must still be within its implementation period; a partial transfer must be capable of standing alone. The transferor must hold the land decision and have paid its land obligations, but need not yet hold a certificate; the transferee must meet the Article 9 conditions and continue the project as approved. Articles 41 and 42 set the approving authority and the procedure.

Resolution No. 254/2025/QH15 eased two points: a transferee may obtain an adjusted land term against payment of additional rent (Article 4(7)), and in transitional cases the transferee inherits the land obligations the transferor already performed (Article 11(7)). Because a project transfer requires State approval and reopens the project's compliance, many investors prefer to acquire the shares of the project company instead, leaving the project and the land where they are; that route needs Article 21 registration where triggered, merger control above the thresholds and careful tax planning (Tax on share transfers and dividends; Chapter 8).

Selecting the investor for housing projects

Housing and urban projects always need investment policy approval, and the investor is then chosen in one of three ways, explained in Investment policy approval: by auction of land use rights where the land is clear and planned, by bidding to select an investor for urban and rural residential projects, or by approval of an investor that already holds the land use rights or has acquired them by agreement. Article 4(5) and (6) of Resolution No. 254/2025/QH15 now allow auctions and bidding for housing and urban projects to proceed on the basis of a zoning or general plan, without waiting for a detailed plan. Since 1 April 2025 Resolution No. 171/2024/QH15 has allowed, for five years, commercial housing projects on agricultural or non-residential land acquired by agreement or already held, on sites listed by the provincial People's Council. A foreign bidder that wins must implement the project through a company established in Vietnam (FAQ 46).

Condotels, officetels and other non-residential units

Units in tourism accommodation buildings (condotels, sometimes marketed as tourism apartments or villas) and office-cum-residence units (officetels) are not housing. Article 5(2) of the law treats tourism and accommodation works and mixed-use works as construction works that may be sold, lease-purchased or leased, including off-plan once the Article 24 conditions are met, and Decree No. 96/2024/ND-CP provides model contracts. Buyers can now obtain certificates for such units for the term of the underlying commercial and service land, rather than the indefinite term of residential land. On the reading adopted by most practitioners, foreign individuals and foreign organisations without a Vietnamese entity may lease but not buy such units, while foreign-invested companies may buy them. The regime has changed several times, so specific advice is needed before committing.

Market practice and typical structures for foreign developers

Foreign developers rarely start from bare State land. The usual structures are: acquisition of a project company that already holds an approved project and land, often in stages tied to approvals, with Article 21 registration and a share purchase agreement carrying detailed land warranties; a joint venture with a Vietnamese developer that contributes the land use rights or the project company, the foreign party contributing capital and expertise, sometimes kept at or below 50% foreign ownership so that the company may use the domestic forms in Article 10; an asset transfer of all or part of a project under Article 40; and forward funding or forward purchase of completed buildings, such as offices, logistics facilities or rental housing, by a foreign-invested company that will lease them out. Business cooperation contracts without a company are used for some revenue-sharing arrangements but cannot hold land.

Each structure carries the same core risks: whether investment policy approval, planning and land allocation are complete; whether land use levy has been finally determined and paid, since unpaid levy is often the largest hidden liability; whether compensation is finished; whether the equity requirement can be met; and whether the project is on schedule under its IRC and the Land Law. VAT on real estate is charged at 10%, the sector having been excluded from the temporary 8% rate (FAQ 22), and a foreign corporate seller of a project company pays tax at 2% of gross proceeds.