On 29 June 2024, the National Assembly passed three (03) amended laws related to the real estate market, specifically: (i) the Land Law 2024, (ii) the Law on Housing 2023, and (iii) the Law on Real Estate Business 2023.

Accordingly, these new legal documents are bringing positive signals, fostering the development of the real estate market, and building confidence among investors in Vietnam. Specifically:

1. The Land Law 2024:

• Expanded Access to Land: 

Under the current regulations of the Land Law, investors can choose from several methods to access land, including: (i) land allocation or lease without auction or bidding as per Article 124; (ii) land allocation or lease through the auction of land use rights as per Article 125; (iii) land allocation or lease through bidding as per Article 126; or (iv) using land to implement socio-economic development projects through agreements on acquiring land use rights or using land with existing rights as per Article 127. This applies to land that has been recovered by the State according to Article 79 of the Land Law 2024. 

Thus, investors can negotiate with landowners to transfer land use rights and develop commercial housing projects, provided that they comply with local procedures, planning, and regulations.

• Additional Cases for Exemption or Reduction of Land Use Fees:

According to Article 157, the National Assembly has added several cases eligible for exemption or reduction of land use fees, including: (i)  land is used for production and business purposes in investment incentive fields or in investment incentive areas according to investment laws and relevant laws, except land for commercial housing construction, commercial land; (ii) land is used to implement PPP projects; and (iii)  Land is used as premises to build headquarters, drying yards, warehouses, production workshops; build service facilities directly serving agriculture production, forestry production, aquaculture, salt production of cooperatives and unions of cooperatives.

Law on Housing 2023:

• Reduction of Investment Procedure Requirements: 

The Law on Housing 2023 has abolished the requirement for investment project approval and the selection of investors for commercial housing projects, as previously stipulated in the Law on Housing 2014. Specifically, Article 36 of the Law on Housing 2023 removes the provisions on methods for selecting investors for commercial housing projects, which were outlined in Article 22 of the Law on Housing 2014. Instead, the new law focuses solely on the conditions for becoming an investor in commercial housing projects.

• Official Recognition of Mixed-Use Housing:

The Law on Housing 2023 officially recognizes the existence and legality of real estate types such as Condotel (residential units combined with business activities serving tourism, similar to a standard hotel room), Officetel (residential units combined with office space for rent), and Shophouse (residential units combined with commercial space for rent), collectively referred to as mixed-use housing. These mixed-use properties may serve purposes such as tourism, commercial business, or other uses. 

To prevent exploitation or misuse of these regulations, the Law on Housing 2023 stipulates that any other purposes combined with residential use must be clearly stated in the project’s investment proposal or approval.

Law on Real Estate Business 2023:

• Facilitating Foreign-Invested Enterprises:

According to Articles 10.4 and 10.5, foreign-invested enterprises are not required to follow foreign investor procedures under the Investment Law if they are not subject to the foreign investment regulations. Such enterprises are allowed to conduct real estate business in a manner similar to domestic organizations and individuals.

• Payment Must Be Made Through Bank Accounts:

According to Article 48.2:

“2. Real estate project investors, real estate enterprises, and real estate service enterprises shall receive payments for real estate business contracts or real estate service contracts from clients through their accounts opened at Vietnamese credit institutions or foreign bank branches lawfully operating in Vietnam.”

Therefore, all transactions related to real estate business contracts must be conducted through a bank account.

Previously, the 2014 Law on Real Estate Business only required that payments in real estate transactions be agreed upon by the parties in the contract and comply with payment regulations. This new regulation tightens conditions for transferors to prevent project transfers solely for profit-seeking purposes and ensures adherence to the principle that sellers can only transfer what they actually own.

The Land Law 2024, the Law on Housing 2023, and the Law on Real Estate Business 2023 takes effect from 1 August 2024.

2. Limitations on the Number of Residential Properties Foreign Organizations and Individuals Can Own

On 24 July 2024, the Government issued Decree No. 95/2024/ND-CP (hereinafter referred to as "Decree 95/2024/ND-CP") detailing several provisions of the Law on Housing 2023.

According to Article 5 of Decree 95/2024/ND-CP, foreign organizations and individuals are allowed to own residential properties in investment projects as follows:

• For a condominium building (including those with mixed-use purposes), foreign entities and individuals may own up to 30% of the total number of residential units in the building. In the case of a condominium with multiple blocks or sections within a common base, foreign entities and individuals may only own up to 30% of the total number of residential units in each block or section.

• For individual houses in an area with a population of 10,000 people and only one residential construction project, foreign entities and individuals may own up to 250 houses.

If the area in question has two or more residential construction projects, foreign entities and individuals may own properties across all projects, but the total number of houses owned cannot exceed 250.

Decree 95/2024/ND-CP takes effect from 1 August 2024.

3. Adjustment of Regulations on Indirect Investment Abroad

On 28 June 2024, the State Bank of Vietnam issued Circular No. 23/2023/TT-NHNN amending and supplementing certain provisions of Circular No. 10/2016/TT-NHNN, which guides the implementation of Decree No. 135/2015/ND-CP dated 31 December 2015 of the Government regarding indirect investment abroad (hereinafter referred to as “Circular No. 23/2023/TT-NHNN”).

Accordingly, Circular No. 23/2023/TT-NHNN regulates that programs for issuing stock options abroad must adhere to the following principles:

• Programs for issuing stock options abroad involving employees with Vietnamese nationality may only be conducted through an organization responsible for the stock option program;

•  Foreign currency received from dividends and other lawful income related to the stock option program abroad must be transferred to employees with Vietnamese nationality through the account used for the program.

Compared to the current regulations, Circular No. 23/2023/TT-NHNN removes the requirement for prior registration approval from the State Bank of Vietnam before implementing stock option programs abroad.

Circular No. 23/2023/TT-NHNN will come into effect from 12 August 2024.