Organizations and individuals wishing to invest in commercial housing projects in which investment is decided by competent authorities would be required to have a legal capital of at least VND 50 billion.
This is a proposal made by the Ministry of Construction in a draft decree detailing a number of articles of the Law on Real Estate Business.
My Quang villas in Phu My Hung urban center, Ho Chi Minh City__Photo: Internet
However, legal experts seem to disagree with the proposal.
At a meeting recently held by the Vietnam Chamber of Commerce and Industry to gather experts’ comments on the draft decree, many lawyers pointed out that once approved, the regulation would be inconsistent with the Law on Real Estate Business which stipulated in its Article 10.1 that real estate businesses must have a legal capital of at least VND 20 billion.
According to lawyer Truong Thanh Duc, president of the Basico law firm, legal capital is usually interpreted as the minimum capital level required by law to obtain permission for setting up enterprises. The legal capital level of VND 20 billion provided in the Law on Real Estate Business should not be understood as the minimum threshold, along with which state agencies would set higher capital requirement, Duc said.
The draft decree also stipulates: “Real estate businesses which are required to reach the legal capital level must be liable for the truthfulness and accuracy of, and must maintain their legal capital, as prescribed.”
Nguyen Thi Nga from Hanoi Law University commented that such provision was too general, and therefore difficult to implement. As the draft decree says nothing about the handling of real estate businesses that violate regulations on legal capital, it is not clear that once a business is detected to break the law on legal capital, whether it would be allowed to continue implementing the ongoing project? If yes, what would be the time limit for the business to remedy its violation? If no, who would take charge for the half-done project? “All these questions should be clearly answered so as to better protect interests of home buyers,” she said.-