Can FDI Companies Do Real Estate Business in Vietnam? Permitted Scope Under the 2023 Law on Real Estate Business
Short answer: Yes, but within a much narrower scope than domestic companies. The 2023 Law on Real Estate Business (effective 1 August 2024) significantly expanded the permitted scope for foreign-invested economic organizations for the first time — yet kept hard red lines around land use rights. Misreading this scope can lead a company to invest millions of dollars into a business model the law does not allow.
Contents
- 1. The legal framework: Article 10 of the 2023 Law on Real Estate Business
- 2. Four forms FDI companies may engage in
- 3. What FDI companies may not do
- 4. General business conditions
- 5. Land and investment procedure notes
- 6. FAQs
- 7. When to work with a lawyer
1. The legal framework: Article 10 of the 2023 Law on Real Estate Business
Article 10 of the 2023 Law on Real Estate Business (No. 29/2023/QH15) sets out the forms and scope of trading in houses, construction works, and land use rights with technical infrastructure within real estate projects — including project transfers — for three groups: domestic organizations and individuals; overseas Vietnamese; and foreign-invested economic organizations.
The key change from the 2014 Law: the 2023 Law opens new ground for foreign investors, permitting investment in technical infrastructure to transfer, lease, or sublease land use rights with infrastructure — previously restricted. This expansion applies only to foreign-invested economic organizations subject to investment conditions and procedures for foreign investors, and still excludes certain land-sensitive forms.
2. Four forms FDI companies may engage in
Under Article 10(2), foreign-invested economic organizations may conduct real estate business through:
a) Investing in construction of houses and works tied to land use rights for sale, lease, or lease-purchase — through a real estate project, strictly following the land's approved form, purpose, and term. This is the main path to becoming a project developer.
b) Investing in technical infrastructure within a real estate project to transfer, lease, or sublease land use rights with infrastructure — the new opening of the 2023 Law, letting foreign investors develop industrial parks and urban areas at the infrastructure stage.
c) Leasing houses, construction works, or floor space within construction works for sublease — the master-lease model for offices and commercial space is permitted with no area cap.
d) Receiving transfer of all or part of a real estate project to continue construction and business — allowing M&A of unfinished projects, subject to project-transfer conditions under real estate, land, and investment laws.
3. What FDI companies may not do
Unlike domestic companies (seven forms under Article 10(1)), FDI companies may not:
- Buy or hire-purchase houses or construction works for resale, lease, or lease-purchase — no "buy and flip" trading of existing properties.
- Receive transfer of land use rights with technical infrastructure within a project for transfer or lease — no speculation in project land plots.
- Lease land use rights with technical infrastructure within a project for sublease — no intermediation in subleasing land plots.
The legislature's logic is clear: foreign investors are encouraged to create new value (construction, infrastructure development, operating leases), not to speculate on existing land use rights. Every cross-border real estate structure must respect this line.
4. General business conditions
Beyond scope, businesses (including FDI companies) conducting real estate business must satisfy Article 9 conditions: establishment as an enterprise under enterprise law; public, truthful disclosure of property information; compliance with land, investment, construction, and housing laws.
Notably, the 2023 Law removed the VND 20 billion minimum legal capital required under the 2014 Law. Financial capacity is now controlled through per-project requirements and regulatory supervision.
5. Land and investment procedure notes
FDI real estate business always involves two procedural layers:
Investment procedures: under the 2025 Law on Investment (effective 1 March 2026) — in-principle approval where applicable, and the Investment Registration Certificate. Land-using projects generally require auction or investor-selection bidding under land law.
Land use rights: foreign investors may only lease land from the State (one-off or annual payment) for their projects — not receive land allocation with land use fees like domestic organizations. All business forms must follow "the correct form, purpose, and term of land use" — using land for the wrong purpose is grounds for recovery.
A note on land: lease, not allocation. Foreign investors should internalize one structural point: in Vietnam, foreign-invested enterprises generally access land through State lease (with land rents), not allocation with land-use fees. This shapes everything from project cash-flow planning (annual vs lump-sum rent) to what happens on project termination. Any market-entry plan that assumes "buying land" the way it works at home needs re-engineering before the investment certificate stage — not after.
6. FAQs
Q: Can a 100% foreign-owned company buy houses to resell for profit?
A: No. Under Article 10(2) of the 2023 Law on Real Estate Business, foreign-invested economic organizations subject to investment procedures may not buy or hire-purchase houses or construction works for resale, lease, or lease-purchase. To trade in housing, an FDI company must invest in construction tied to land use rights through an approved real estate project.
Q: Can an FDI company lease an office and sublease it?
A: Yes. Leasing houses, construction works, or floor space within construction works for sublease is one of the permitted forms of real estate business for foreign-invested economic organizations (Article 10(2)(c)).
Q: Can an FDI company acquire an unfinished real estate project?
A: Yes. Receiving transfer of all or part of a real estate project to continue construction and business is permitted (Article 10(2)(d)), subject to project-transfer conditions under the Law on Real Estate Business and land and investment laws.
Q: Does the 2023 Law still require VND 20 billion in legal capital?
A: No. Unlike the 2014 Law, the 2023 Law removed the minimum legal capital of VND 20 billion for real estate businesses. Instead, financial capacity is assessed per project and through compliance supervision.
Q: What procedures does an FDI company need to become a housing project developer?
A: It must complete investment procedures under the 2025 Law on Investment (in-principle approval, Investment Registration Certificate), be allocated or lease land under the 2024 Land Law in the correct form, purpose, and term, and satisfy Article 9 business conditions.
7. When to work with a lawyer
Work with a lawyer when: structuring a cross-border real estate transaction and need to determine whether the model falls within Article 10's permitted scope; preparing to acquire a real estate project and need to review transfer conditions; or designing synchronized investment–land–business procedures from the outset to avoid land-use-purpose violations. FLAT Law Firm advises foreign investors on all real estate transactions in Vietnam — call 0988424851 for a tailored structure.
References
- 2023 Law on Real Estate Business (No. 29/2023/QH15), effective 1/8/2024.
- 2024 Land Law (No. 31/2024/QH15), effective 1/8/2024.
- 2025 Law on Investment (No. 143/2025/QH15), effective 1/3/2026.
—