Unleashing Opportunities for Small-Scale Real Estate Entrepreneurs

Experts commented that this regulation is practical and provides opportunities for individuals in the real estate business without having to establish a company. Previously, the law stipulated that anyone engaging in real estate business must register and have a minimum capital of VND 20 billion. This condition has caused difficulties for small-scale real estate businesses. However, these obstacles have been addressed in Decree 96, which provides detailed regulations on small-scale real estate business operations.

According to Clause 7 of Decree 96, the criteria for individuals engaging in small-scale real estate business are those who do not have to establish investment projects as prescribed by construction and housing laws; or do not transact a value of more than VND 300 billion in a contract and have more than 10 transactions within a year. In the case of one transaction per year, the value is not considered.

Mr. Nguyen Van Dinh, Chairman of the Vietnam Real Estate Brokers Association, analyzed that individuals have the freedom to engage in the real estate business if they do not fall under the case of having a value of more than VND 300 billion in a contract and more than 10 transactions within a year. Otherwise, the individual must establish a company to ensure the conditions for doing business in real estate. This is very clear and transparent.

This regulation has removed difficulties and addressed concerns of individuals in the real estate business, especially in provincial areas. In these markets, small-scale business activities are common. When people have surplus housing for rent or build and sell, it is popular. If we consider the old regulation, which considers selling and renting as a real estate business and forces individuals to establish a company, it is like challenging the people – commented Mr. Dinh.

Real estate legal expert Nguyen Van Dinh commented that the criteria and limits for small-scale real estate business, which do not require the establishment of a company, are very appropriate, legal, and meet practical needs. Real estate business is one of more than 200 sectors and trades with conditional business according to the Law on Investment. This field is also unique, so participants need in-depth understanding in many fields, legal, financial, market, construction…

When engaging in this field, the business entity may also face risks related to customers and state management agencies. It is necessary to tighten the conditions for the entity to do business in real estate. However, Decree 96 does not prohibit individuals from doing business in real estate on a large scale but only requires them to establish a company or cooperative to operate.

However, the law needs to quantify the small-scale real estate business. If this scale is exceeded, the business entity must establish an economic organization and comply with the Law on Real Estate Business to protect social order and safety and protect the rights and interests of the entities in business activities.

However, the expert said that it is necessary to pay attention to the scientific aspect in quantifying small-scale real estate business. Specifically, the quantitative figures of VND 300 billion and 10 transactions within a year as prescribed in Decree 96 need to be more convincing when implemented. On the other hand, there should also be sanctions to control and handle cases of individuals doing business in real estate exceeding the small-scale limit.