The business line that the investor needs to register is “Trading of own or rented property and land use rights” (VISC 6810), Although the WTO has not committed this industry, the law of Vietnam clearly stipulates that foreign-invested organizations can do business, so investors can still register this business line; and “Short- term accomudation activities” (CPC 641, VISC 5510).
1. On the business lines
Foreign-invested enterprises are only allowed to do business in the fields which are not in violation of the provisions of the law of Vietnam and in accordance with international treaties.
“Hometel” is a type of hotel apartment, housing fully integrated with services such as hotels. According to Vietnamese law, this model allows the investor to lease the apartment or sell the apartment, then the owner of the apartment is granted a property ownership certificate when the conditions prescribed are follow legal.
Therefore, the business line that the investor needs to register is “Trading of own or rented property and land use rights” (VISC 6810), Although the WTO has not committed this industry, the law of Vietnam clearly stipulates that foreign-invested organizations can do business, so investors can still register this business line; and “Short- term accomudation activities” (CPC 641, VISC 5510).
2. Implementation process:
– Step 1: Establishment of a new Project and a Company between Singaporean and Vietnamese investor. Therefore, foreign-invested companies should apply for a project investment registration certificate before establishing their company.
– Step 2: The new FDI company proceeds with the procedure to lease land.
Establishing new project and new Company.
These issues should be considered when establishing a company in Vietnam:
1. About investment capital
Investment capital is the money and the other assets to conduct investment activities. Investment capital includes capital contributed by investors and mobilized capital. Mobilized capital may come from various sources such as mobilizing from banks, investors themselves or from other organizations and individuals. Schedule of capital contribution and capital mobilization proposed by the investor is shown on the investment registration certificate.
According to Law on real estate trading 2014, the legal capital not smaller than VND 20 billion. Therefore, the contributed capital and charter capital of the company must be at least VND 20 billion.
The investors must prove financing (including both contributed capital and loan) to participate in project establishment in Vietnam
After being granted an IRC and ERC, the investors must open a direct investment capital account at a functional bank in Vietnam to transfer contributed capital to the account of direct investment capital within the prescribed time limit.
About the project implementation location and head office address
The project implementation location will usually be the same as the location of the headquarter.
2. The lease of land for hometel construction
The leased land must meet the conditions of land use purpose being commerce and services.
*If a Vietnamese is in the name of land user, it is legally the property of the Vietnamese.