1. DRAFT LAW ON LAND (AMENDED)
The Draft Law on Land (Amended) (the “Draft Law”), drafted by the Ministry of Natural Resources and Environment, was submitted by the Government to the National Assembly for discussion and comments on 01 November 2022, and shall be tentatively ratified at the 6th National Assembly session in October 2023, replacing the Law on Land No. 45/2013/QH13 (the “Law on Land 2013”).
Here are some notable contents of the Draft Law:
1. Removing regulations on land price brackets and amend regulations on land price tables and specific land prices
Accordingly, the content “The Government issues a land price bracket every five years for each type of land and by region” in the 2013 Law on Land is abolished in the Draft Law. At the same time, the contents related to the land price tables and specific land prices are also adjusted to suit the market situation in recent years.
2. Limiting the right to choose the form of land rental payment
The Draft Law stipulates that there shall be only one case where a land tenant can choose the form of land rental payment, that is, economic organizations, financially self-sufficient public non-business units, households, individuals, overseas Vietnamese, foreign-invested economic organizations that are currently renting land with annual rental payment but subjected to one-off rental payment for the entire period, shall have the right to switch to the one-off rental payment.
3. The transfer of land use rights is stipulated more freely
According to the Law on Land 2013, foreign-invested enterprises (foreign-invested economic organizations according to the Draft Law) are not entitled to receive the transfer of land use rights in industrial parks, industrial clusters, export processing zones, or high-tech parks. Now, the content of the Draft Law has expanded the possibility of receiving the transfer of land use rights of foreign-invested economic organizations in this case.
In addition, the Draft Law has removed the regulation in the 2013 Law on Land that does not allow economic organizations, households and individuals not directly engaged in agricultural production to receive the transfer of the rice-growing land use right from households and individuals. In addition, the quota for receiving the transfer of agricultural land use rights was also expanded, from no more than 10 times to no more than 15 times the agricultural land allocation quota of households and individuals.
In general, the Draft Law on Land (amended) has overcome the obstacles of the previous Law on Land, aiming to stimulate healthy market development, promote land resources and contribute to the commercialization of land use rights.
II. DRAFT LAW ON REAL ESTATE BUSINESS (AMENDED)
The Draft Law on Real Estate Business (Amend) (“Draft Law”) drafted by the Ministry of Construction, shall be tentatively submitted by the Government to the National Assembly for discussion at the 5th session (May 2023) and ratified at the 6th session (October 2023).
Here are some notable amendments to the Draft Law:
1. Supplement regulations to adjust new types of real estate products to meet the requirements of reality
The Draft Law lists tourist apartments, tourist villas, officetel as types of real estate that are entitled to be put into business, aiming to overcome the lack of regulatory mechanisms at present. In addition, the Draft Law also stipulates that land use rights in real estate projects which are put into business must be land use rights with technical infrastructure.
3. Changing in the conditions of organizations or individuals doing real estate business
According to the Draft Law, real estate businesses no longer need to meet the legal capital requirements of 20 billion to be in sync with the provisions of the Law on Investment. However, investors implementing real estate projects need to have equity of not less than 20% of the total investment capital for projects with a land use scale of fewer than 20 hectares or not less than 15% for projects with a land use scale of 20 hectares or more.
4. Setting a limit for deposit
The Draft Law has limited the deposit ceiling to 5% of the value of houses purchased aims to avoid the situation that investors take advantage of the current absence of deposit ceilings to receive deposits of up to 80-90% for the purpose of capital mobilization, which affects the interests of the buyer and is not consistent with the nature of the deposit.
5. Compulsory payment via bank
The Draft Law stipulates that contract payment in real estate business must be performed through a credit institution legally operating in Vietnam.
6. Transactions must be done through a brokerage trading floor
At the present, the Draft Law has two options related to real estate transactions that must be executed through the real estate brokerage trading floor for choosing the better one. The 1st option includes the sale, lease-purchase of houses and construction works to be formed in the future; transfer, lease or sublease land use rights with technical infrastructure in real estate projects. The 2nd option includes real estate that is eligible to be put into business without a certificate of land use rights, house ownership and other land-attached assets.
The Draft Law is organized into 11 chapters, many contents are separated and divided into separate chapters compared with the provisions of the current Law on Real Estate Business such as trading land use rights, real estate project transfer, real estate business contracts, building and managing a data information system and regulating the real estate market. This reaffirms the desire to build a comprehensive and informed policy mechanism to eliminate legal bottlenecks and create favorable conditions for the growth of the real estate market.
The Law on Real Estate Business (amended) is expected to fully institutionalize the Party’s guidelines, the State’s legal policies, and improve mechanisms and policies to develop a stable, athletic real estate market and properly promote its role as a resource for the development of the country.
III. DRAFT LAW ON HOUSING (AMENDED)
Draft Law on Housing (Amended) (“Draft Law”) drafted by the Ministry of Construction shall be tentatively presented by the Government to the National Assembly for discussion at the 5th session (May 2023) and ratified at the 6thsession (October 2023). Draft Law presents various new changing points supposed to have a significant impact on citizens, businesses and the market; some of notable provisions are as below:
1. Suggestion on a time limit for apartment ownership
Draft Law stated two (02) options for limited-term apartment ownership. Accordingly, 1st option adds new regulations on the time limit of apartment ownership rely on the using time presented in designing documents which are assessed by competent authorities, been calculated from the time of accepting the whole building and putting it into use; 2ndoption remains recent regulations, which do not stipulate the time limit for apartment ownership, this means, such ownership is stable and long-lasting.
Aiming to synchronize with 1st option abovementioned, Draft Law also modifies a range of relevant regulations, such as those on granting a certificate of apartment ownership, handling apartments when the ownership terms are still in effect, handling apartments when the ownership terms are expiry, cases of tearing down or reconstruction apartment as well as setting up temporary housing.
2. Specifying other types of lands besides residential land to carry out a commercial housing project
In respect of the forms to designate investor(s) for a commercial housing construction project, Ministry of Construction proposes additional options on specifying other types of land besides residential land which the investor has entitled to use in addition to the current regulations, such as:
- Compensated land when the authorities carry out the acquisition or release;
- Land allocated or leased by the authorities with one-off payment of land rent by auction of land use rights or bidding for project using land;
- Commercial land, services land or non-agricultural manufacturing land being allocated or leased by authorities with one-off payment or annual payment of land rent.
3. Amending the regulations on housing construction project investors
According to Draft Law, the investor(s) of a housing construction project is not only the real estate business enterprise but also the organization assigned bearing investors by investment decision makers in case of using public investment capital or stating capital besides public investment. In addition to depositing or equity capital, it shall satisfy the conditions of winning the land use right auction or the bid of using the land project or accepting the investor or accepting the investment policies.
4. Supplement groups that beneficiaries from housing cooperative aid policies
Accordingly, groups of enterprises and co-operatives under the laws on enterprises, co-operatives are supported by way of purchasing, renting, and hire purchase of residential worker housing for their employee to sublet.
5. Land funds to construct the housing cooperative.
Besides options in keeping the current provisions unchanged, the content of the Draft Law proposes additional options of requesting the Provincial People’s Committee to rely on the local’s agenda and plan for housing development allocating land funds to develop the housing cooperative.
6. Supplementing further two (02) options to the acquisition, forcing acquisition of state-owned housing, namely:
- The lessees being rotated to another working place; and
- Unlawful cases of housing use.
7. Expansion of housing mortgagee
In case of housing owners being organizations, besides having the right to mortgage houses at credit institutions, Draft Law also allows to mortgage at branches of foreign banks operating in Vietnam.
8. A range of newly additional provisions
Worker residential housing development, housing policies for armed forces, regulations on management of the constructed and technique building in apartment field, source of public capital serving purposes of housing development and method of mobilizing capital to develop housing are new regulations currently added in this Draft Law.
Many amended policies and contents are continually being discussed and commented on, aiming to build a comprehensive law as well as resolve all practice-based requirements.
IV. DECREE NO. 35/2022/ND-CP
Experts and employees are entitled to temporary/permanent residence at the industrial parks
Decree 35/2022/ND-CP (“Decree 35”) issued by the Government on 28 May 2022 stipulates the management of industrial parks (“industrial park”) và economic zones (“economic zones”), taking over Decree 82/2018/ND-CP (“Decree 82”).
Accordingly, Decree 35 has several new points on the management of industrial parks and economic zones which are amended and supplemented as follows:
1. Supplement several new types of industrial parks and economic zones
Besides supporting industrial park, eco-industrial park and export processing zones (“EPZ”) which are stipulated in Decree 82, Decree 35 further supplement more two (02) types of industrial parks, namely:
- Specialized industrial park: specializing in manufacturing and catering for a particular business line: having a minimum of 60% land area which is used to attract investment projects in such particular business line.
- High-tech industrial park: attracting high-tech investment projects, information technology belongs to the List of incentive investment, the project with transferring technology which belongs to the List of technology encouraged to transfer; and a minimum of 30% of industrial land area used to attract such investment projects.
2. Supplement some new provisions for export processing zones
First, Decree 35 has broadened businesses specializing in manufacturing and providing services for industrial production that may be established in EPZ.
Secondly, the definition of export-processing businesses has been narrowed by Decree 35, which states that only enterprises that engage in export-processing activities can be considered as such, at the same time, allowing export-processing enterprises has entitled to implement other business activities besides export-processing activities once meet the following conditions:
- Goods that are used for export-processing activities are separately stored from other goods;
- Separately accounting of revenue and expenses of export-processing activities from other business activities; and
- Not allowed to use the asset or equipment that obtained tax incentives applied for export-processing enterprises serving other manufacturing and business activities.
3. Expanding the scope of people who are entitled to temporary residence, supplement right of residence as well as stay in an industrial park.
New regulations in Decree 35 allow all experts and employees, being both Vietnamese citizens or foreign citizens, to reside temporarily in an industrial park; no longer limited to managers, chief executive officers, and foreign experts as in previous regulations.
Besides that, Decree 35 also supplements the residence rights in the industrial park of Vietnamese experts and employees (without a time limit), and rights to reside in the industrial park of foreign experts and employees (in less than 30 days) in force majeure situations.
In conclusion, the promulgation of Decree 35 has promptly resolved the shortcoming of Decree 82 and satisfied the current practice-based requirements of industrial parks and economic zones; contributing to attracting investment and pushing the development of industrial parks, economic zones, as well as solving the accommodation problem for the labors in such place.
V. DECREE 47/2022/ND-CP
Passenger transport businesses must request the consignee to fully provide information in case of consignee does not accompany the goods
Decree 47/2022/ND-CP (“Decree 47”) issued by the Government on 19 May 2022 amendment to several articles of Decree 10/2020/ND-CP on business and requirements on car transport business, which comes into force from 1 September 2022.
Decree 47 has several new changing points in the cars transport business as follows:
Firstly, passenger transport businesses, drivers and staff serving on cars (if any) (“consignors”) shall, when receiving consignment goods (consignees do not accompany the goods), require the consignees to fully and accurately provide information including names of goods, volumes (if any), full names, addresses, ID numbers and phone numbers of consignees and consignors.
Secondly, cars having fewer than 10 seats (including the driver) converted from cars with at least 10 seats are prohibited from being used in the passenger transport business.
Thirdly, information from car journey trackers shall be connected and shared with the Ministry of Public Security (Traffic Police Authority) and the Ministry of Finance (General Department of Taxation, General Department of Vietnam Customs).
Fourthly, upon promulgation of the business license revocation decision, the transport business shall, within 07 days from the day the decision is issued, re-submit its business license and signage to the issuing authority and stop all transport business activities according to this decision immediately after its come into force.
Thereby, the adoption of new regulations intends to transparentize relevant information about goods and their transportation; help authorities’ management more strictly and efficiently; take control of illicit and fake goods, prohibited and explosives substances and easily find out sources when issues arise.
VI. DECREE 65/2022/ND-CP
In some particular situations, an issuer must redeem bonds at the request of investors before maturity
Decree 65/2022/ND-CP (“Decree 56”) issued by the Government on 16 September 2022 amending several articles of Decree 153/2020/ND-CP (“Decree 153”) prescribing private placement and trading of privately placed corporate bonds in the domestic market and offering of corporate bonds in the international market, which comes into effect from the date of issuance.
Decree 65 has several new points on private placement and trading as follows:
1. Supplement some principles of private placement corporate bonds
Previously, Decree 153 did not allow issuers to change of the bond’s terms and conditions, but Decree 65 currently allows such changes in relation to bonds placed in the domestic market. Issuer accordingly needs to satisfy the following two ((02) conditions:
- Approved by the competent authority of the issuer; and
- Approved by bondholders that represent at least 65% of total ongoing bonds of the same type.
2. Increasing the face value of private corporate bonds by 1000 times.
Increasing the face value of bonds offered in the domestic market from VND100,000 or the multiple of VND100,000 to VND100,000,000 or the multiple of VND 100,000,000; which means increasing 1000 times compared with previous regulations. Such rules aim to ensure professional securities investors and limit potential risks for investors.
3. Supplement regulations of compulsory redeeming bonds before maturity
Decree 53 only stipulated one case of redeeming bond before maturity by request of bond owner. Decree 65 adds more two cases in which the issuer is compulsory to redeem at the request of investors, namely:
- Pursuant to the decision of competent authorities, the issuer violates laws on placement and trading corporate bonds;
- The issuer violates on the issuance agenda and such violation cannot be solved or solving methods are notapproved by bondholders representing at least 65% in total of ongoing bonds of the same type.
4. Amendment of distributing schedule in each period of private placement bond
Decree 65 states that bonds offered in each offering period must be distributed within 30 days from the date of disclosure of information before offering. The total duration for a multiple-period offering shall not exceed 06 months from the issue date of the first offering period. In previous regulations, such time was prescribed as 90 days and 12 months respectively.
Decree 65 was promulgated in the context of the corporate bond market, on one side, developing rapidly, but on the other side, containing many unclear issues, even illegal in some cases which Decree 153 does not eligible to handle. Decree 65 expectedly contributes to ensuring the transparency and responsibilities of subjects who join this market, protecting both benefits of issuers and investors.
