Circular No. 13/2008/TT-BXD detailing and guiding the implementation of the law on real estate business

 CIRCULAR

GUIDING THE IMPLEMENTATION OF A NUMBER OF POINTS OF THE GOVERNMENT'S DECREE No. 152/ 2007/ND-CP OF OCTOBER 15, 2007. DETAILING AND GUIDING THE IMPLEMENTATION OF THE LAW ON REAL ESTATE BUSINESS

Pursuant to the Government's Decree No. 17/ 2008/ND-CP of February 4, 2008, defining the functions, tasks, powers and organizational structure of the Construction Ministry;

Pursuant to the Government's Decree No. 153/ 2007/ND-CP of October 15,2007. detailing and guiding the implementation of the Law on Real Estate Business;

Pursuant to the Government's Decree No. 13/ 2008/ND-CP of February 4,2008. stipulating the organization of specialized bodies of provincial/ municipal People's Committees;

The Construction Ministry specifically guides some provisions of Decree No. 153/ND-CP as follows:

Part I

GUIDANCE ON ORDER AND PROCEDURES FOR CERTIFICATION OF CAPITAL IN REAL ESTATE BUSINESS

1. Order and procedures for certification of legal capital upon establishment of real estate business enterprises or addition of the real estate business line for enterprises (under Clause 2. Article 3 of the Government's Decree No. 153/ 2007/ND-CP of October 15, 2007, detailing and guiding the implementation of the Law on Real Estate Business, which is below referred to as Decree No. 153/2007/ND-CP):

Newly established real estate business enterprises and cooperatives or operating enterprises and cooperatives (below collectively referred to as enterprises) that wish to additionally conduct real estate business shall, apart from dossiers required for business registration, obtain written certifications of their capital and send them to agencies that have granted business registration certificates for carrying out procedures to grant business registration certificates or add the real estate business line under the following regulations:

1.1. For newly established enterprises, a dossier of certification of legal capital comprises:

1.1.1. A written record of capital contribution by founding shareholders, for joint- stock companies, or founding members, for limited liability companies with two or more members: a decision on assignment of owner's capital, for one-member limited liability companies owned by organizations: a written registration of investment capital of enterprise owner, for private enterprises and one-member limited liability companies owned by individuals:

1.1.2. For capital amounts contributed in cash, there must be written certifications of commercial banks licensed to operate in Vietnam of deposit amounts of founding members. Deposit amounts must be at least equal to capital amounts contributed in cash by founding members and released only after enterprises are granted business registration certificates;

1.1.3. For capital mounts contributed in assets, there must be deeds issued by organizations having the function of price appraisal and operating in Vietnam certifying results of the price appraisal of assets used for capital contribution. Certification deeds must be still valid on the date of submission of the dossier to the business registry office.

1.2. For an operating enterprise wishing to additionally conduct real estate business, its dossier of legal capital certification must contain an independent audit organization's written certification of the existing capital owned by it and stated in its latest financial statement (for the year of registration or the year preceding the year of registration), which must be at least equal to the legal capital prescribed in Decree No. 153/ 2007/ND-CP (VND 6 billion).

1.3. In the course of operation, real estate business enterprises shall maintain their charter capital not lower than the legal capital (including enterprises that were granted real estate business registration certificates before the effective date of Decree No. 153/2007/ND-CP).

1.4. Organizations and individuals that directly certify legal capital shall take joint responsibility for the accuracy and truthfulness of capital amounts at the time of certification.

2. Order of and procedures for certification of capital under ownership of investors upon their registration for execution of projects on new urban centers, residential housing complexes or infrastructure works of industrial parks (under Article 5 of the Government's Decree No. 153/ 2007/ND-CP):

2.1. Capital under an investor's ownership means capital amounts actually owned by that investor up to the year preceding the year of project execution as stated in the enterprise's financial statement certified by an independent audit organization.

2.2. For investors being newly established enterprises, their actual capital amounts are identified as follows:

2.2.1. For capital amounts in Vietnamese currency or a foreign currency, there must be certifications by commercial banks where these enterprises open their accounts of the balances of their deposits. The time of certification must be within thirty (30) days before the date of submission of dossiers of application for approval of projects;

2.2.2. For capital amounts in assets, there must be deeds issued by price appraisal organizations operating in Vietnam certifying results of the price appraisal of these enterprises' assets. Certification deeds must be still valid on the date of submission of dossiers of application for approval of projects.

2.3. Investors of projects on new urban centers, housing complexes or technical infrastructure works of industrial parks must satisfy the condition on investment capital under their ownership specified in Clause 1. Article 5 of Decree No. 153/ 2007/ND-CP, specifically as follows:

2.3.1. The required level of investment capital under investors' ownership shall be identified on the basis of total investment capital of each project, which is determined under legal provisions on management of construction investment expenses;

2.3.2. If the project investor has already obtained land use rights, compensation has been paid for the clearance of the land plot for project execution or the project investor is grade-1 investor (investing and dealing only in infrastructure works), the total investment capital of the project only includes investment capital for technical infrastructure works, excluding land use expenses, compensations for ground clearance or expenses for investment in building other works.

Part II

GUIDANCE ON SOME POINTS ON TRANSFER OF WHOLE PROJECTS

The transfer of whole projects on new urban centers, housing complexes or technical infrastructure of industrial parks (Under Articles 6, 7, 8 and 9 of the Government's Decree No. 153/ND-CP) is carried out as follows:

1. Competence to permit the transfer of whole projects:

1.1. State agencies competent to permit investment in projects may permit the transfer of these projects in whole.

1.2. Before issuing decisions to permit transfer of whole projects, agencies competent to permit project transfer shall designate their specialized units to evaluate dossiers of application for permission for project transfer. Units in charge of project evaluation shall send these dossiers to concerned agencies for their opinions. For projects in which investment has been permitted by the Prime Minister, provincial-level People's Committees shall organize the evaluation and consult concerned ministries and branches before submitting them to the Prime Minister for consideration and decision.

2. Order of and procedures for transfer of whole projects:

2.1. Dossiers of application for permission for transfer of whole projects shall be submitted to provincial-level agencies in charge of project evaluation in localities where projects are located (for projects on new urban centers and housing complexes, provincial-level agencies in charge of project evaluation are provincial-level Construction Services, for projects on technical infrastructure works of industrial parks, the agencies in charge of evaluation shall be designated by presidents of provincial-level People's Committees);

2.2. Provincial-level agencies in charge of project evaluation shall evaluate dossiers for transfer of whole projects within 30 working days after receiving complete dossiers.

2.3. After completing the evaluation, the agencies in charge of project evaluation shall propose provincial-level People's Committees to issue decisions to permit project transfer under their competence or to propose these projects to the Prime Minister for consideration and decision.

3. A dossier of application for transfer of a whole project comprises:

3.1. The old investor's application for project transfer, made according to a set form:

3.2. The investment permit of a competent state agency; the dossier of the approved project: the decision on project approval; the land rent contract or the decision on land allocation or the land use rights certificate: the new investor's dossier:

3.3. A resort on the project execution as of the time of transfer;

3.4. The new investor's dossier, comprising:

3.4.1. A business registration covering the real estate business line;

3.4.2. The new investor's commitments upon receiving the transferred project, covering the responsibility to fulfill the obligations committed by the old investor toward the State and customers:

3.4.3. A certificate of the new investor's financial capability under Point 2, Part I of this Circular.

4. To-be-evaluated contents of a dossier of application for transfer of a whole project:

4.1. Reasons for the transfer:

4.2. Conditions on the project transfer;

4.3. The condition on the new investor's capability;

4.4. The new investor's plan on project execution.

5. Procedures for handover between the old investor and the new investor of a project:

5.1.Within 30 (thirty) days after the issuance of a decision on transfer permission by a competent agency, the new and old investors shall enter into a project transfer contract, made according to a set form, and complete the project handover. The new investor shall continue executing the project immediately after the handover:

5.2. The old investor shall handover to the new investor all project dossiers, make a written record of the handover enclosed with a list of dossiers. The onsite handover of land boundaries of the project must comply with the land law;

5.3. Before carrying out handover procedures, the old investor shall notify in writing to ail customers (if any) and make an announcement on the mass media 15 days in advance on at least three consecutive issues of a local newspaper, for three times on a central or local television station and the website (if any) of the provincial-level agency in charge of evaluation in the locality where the project is located), notifying the project transfer and customers' interests.

Part III

GUIDANCE ON REAL ESTATE TRANSACTIONS ON REAL ESTATE TRADING FLOORS

Real estate business enterprises shall sell, transfer, lease or hire-purchase real estate through real estate trading floors (except for social housing projects under the Housing Law) under the following regulations:

1. Only real estate which satisfies the conditions specified by law can be sold, transferred, leased or hire-purchased;

2. Investors may themselves establish real estate trading floors or select real estate trading floors established by other entities for introducing their real estate and conduct real estate transactions.