Unleashing the Potential: Empowering Small-Scale Real Estate Entrepreneurs

Real estate experts comment that this regulation is in line with practical needs, offering opportunities for individuals in the real estate business to operate without establishing a company. Previously, the law stipulated that anyone engaging in real estate business must register and establish a company with a minimum capital of VND 20 billion. This condition posed challenges 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 need to establish investment projects as prescribed by construction and housing laws; or those whose transaction value does not exceed VND 300 billion in a contract and the number of transactions does not exceed 10 times a year. In the case of a single transaction in a 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 as long as they do not exceed the transaction value of VND 300 billion in a contract and the number of transactions of 10 times a year. Otherwise, the individual must establish a company to meet the conditions for operating in the real estate sector. This regulation is clear and transparent.

This regulation has alleviated concerns among individuals in the real estate business, especially in provincial areas. In these markets, small-scale business activities are commonplace. When residents have surplus housing for rent or sale, it is common for them to engage in construction and subsequent sale. If we were to follow the previous regulations, where renting and selling were considered real estate business activities, requiring the establishment of a company, it would have been a daunting task for the residents, commented Mr. Dinh.

Real estate legal expert Nguyen Van Dinh praised the criteria and limits set for small-scale real estate business operations, exempting them from the requirement of establishing a company. He stated that this regulation is lawful and meets practical needs. Real estate business is one of the more than 200 conditional business lines according to the Law on Investment. It is also a unique field, and participants in this sector must have in-depth knowledge in various fields, including legal, financial, market, and construction aspects.

When engaging in this field, the business entity may also face risks related to customers and state management agencies. While it is necessary to have stringent conditions for entities in the real estate business, Decree 96 does not prohibit individuals from engaging in real estate business beyond the small-scale scope. Instead, it stipulates that they must establish a company or cooperative to operate.

However, the law should provide a quantitative definition of small-scale real estate business operations. If this scale is exceeded, the business entity should be required to establish an economic organization and comply with the Law on Real Estate Business to maintain social order and safety and protect the rights and interests of all parties involved in the business activities.

Nevertheless, the expert emphasized the need for scientific quantification of small-scale real estate business operations. Specifically, he referred to the quantitative figures of VND 300 billion and 10 transactions within a year as stipulated in Decree 96. By doing so, the regulation would become more convincing during its implementation. Furthermore, there should also be sanctions to control and handle cases of individuals engaging in real estate business beyond the small-scale limits.