CONDITIONS FOR FOREIGN INVESTORS TO CONDUCT REAL ESTATE BUSINESS IN VIETNAM – PART 2

Conditions for Capital Contribution and Share Purchase in Real Estate Businesses

In addition to direct investment, foreign investors can access the real estate market by contributing capital or purchasing shares in Vietnamese enterprises already operating in this sector. This scenario is governed by Clause 4, Article 75 of Decree No. 96/2026/ND-CP, under which foreign investors must simultaneously satisfy two groups of conditions:

• The first group comprises market access conditions as prescribed in Clause 3, Article 8 of the Law on Investment 2025 and Articles 15, 16, and 17 of Decree No. 96/2026/ND-CP, as analyzed in Part 1.
• The second group consists of conditions regarding the preservation of national defense, security, and land use. Specifically, if the economic organization in which the foreign investor intends to contribute capital or purchase shares holds a Land Use Rights Certificate (Giấy chứng nhận quyền sử dụng đất) in sensitive areas—such as islands, border communes/wards/townships, coastal areas, or other areas affecting national defense and security—the transaction must be reviewed and approved by competent authorities regarding national defense and security conditions before completion.

This regulation reflects the State’s strategic land management policy, where territorial sovereignty is strictly prioritized over mere economic interests.

International Commitments and the Relationship with Domestic Law

The aforementioned system of conditions does not exist in isolation but must be interpreted in correlation with the international commitments to which Vietnam is a party.

• Under the EVFTA framework, Vietnam reserves its right to adopt or maintain any measure (non-commitment) with respect to land ownership, land expropriation, planning, and the purchase and sale of residential real estate by foreigners.
• Under the CPTPP framework, the scope of activities for foreign-invested enterprises in the real estate sector is clearly defined in Annex NCM I-VN-34, creating a transparent reference framework for investors.

The co-existence of domestic law and international commitments requires foreign investors to approach the matter using the principle of applying the more favorable regulations: if an international treaty to which Vietnam is a signatory contains provisions different from domestic law, the international treaty shall prevail pursuant to Clause 6, Article 5 of the Law on Investment 2025.

Legal Recommendations

Through the analysis in both parts, it can be affirmed that Vietnamese law establishes a legal regime that is simultaneously open yet controlled for foreign investors in the real estate business sector.

• The openness is demonstrated by the absence of limits on equity ownership ratios and the permission to participate in various types of transactions.
• The control is manifested in the clear demarcation of the permissible scope of activities, the imposition of national defense and security conditions, and the linking of land access rights to the framework of a licensed investment project.

For foreign investors intending to conduct real estate business in Vietnam, full compliance with legal conditions is an irreplaceable prerequisite. Specifically, three key points must be noted:

(i) Clearly identify the form of investment and the scope of activities in accordance with legal boundaries;

(ii) Conduct thorough legal due diligence on the land status of the target enterprise when contributing capital or purchasing shares; and

(iii) Keep updated on the international commitments applicable to the investor’s home country to determine the most favorable conditions that can be applied.