Old condominium reconstruction projects opened to foreign investors

Wholly foreign-owned enterprises, joint-venture companies with foreign investors and overseas Vietnamese businesses would be permitted to implement or join hand with others in implementing projects to renovate or reconstruct old apartment buildings in the country.

This is provided in a draft decree prepared and recently unveiled by the Ministry of Construction for public opinion.

In order to be allowed to invest in, or contribute capital to, a condominium reconstruction project, a business must satisfy several conditions. Firstly, its business registration certificate or investment certificate must indicate real estate as one of its business lines or investment sectors. Secondly, it must have a sufficient legal capital as prescribed by the law on real estate business. Finally, its equity for implementation of the project must be at least equal to 15 percent of the project’s total investment capital. In addition, the business must pay sums of money as deposit for project implementation and security for residential property transactions in accordance with the laws on investment and real estate business.

In order to encourage investment in renovation and reconstruction of old condominiums, the draft decree offers a raft of incentives for investors.

Accordingly, project owners would be exempt from land use levy, land rental and land use purpose change payment. They would also be entitled to soft loans from various sources and be permitted to change the use purposes of part of the allocated land areas for business and service activities.

In addition, condominium reconstruction projects would be entitled to value-added tax and corporate income tax rates applicable to social housing projects. Meanwhile, apartments left after arranging accommodations for households living in re-built apartment buildings may be traded in accordance with the law applicable to commercial housing projects.

Source: http://vietnamlawmagazine.vn/