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 Question: Our company is a foreign owned capital company. We are intending to invest in construction and operation of office building for rent, trade center, convention and exhibition center, warehouse in an industrial zone. Would we be entitled to do so? What are the main conditions that we have to satisfy?

Answer:

Under Article 19.1, Decree 106/2006/ND-CP dated September 22, 2006 of the Government providing guidelines for implementation of a number of articles of Law on investment, investors investing in production and business in industrial zones, export processing zones, high-tech zones and economic zones shall have the rights to lease or purchase factories, offices and warehouses which have been built for service production and business; to transfer and receive a transfer of land use rights and to lease land on which technical infrastructure facilities have been built in order to build factories, offices and other buildings servicing production and business in accordance with the law on land and the law on real estate business.

Therefore, in principle, your company would be entitled to invest in construction and operation of office building for rent, trade center, convention and exhibition center, warehouse in an industrial zone.

Your company would have to satisfy with the conditions as provided in the Law on Real Estate Business. Under Article 8 of Law on Real Estate Business, any company conducting real estate business must have a legal capital - the minimum amount of capital that is required by laws for a company to be established. Article 3 of Decree 153/2007/ND-CP of the Government dated October 15, 2007 detailing and guiding the implementation of the Law on Real Estate Business sets this legal capital at VND 6 (six) billion.

The investment in an industrial zone has to comply with the approved master plan of the industrial zone. Moreover, with regard to storage and warehouse service, container station and depot services, according to the commitment of Vietnam when accession to WTO, foreign investor may establish joint venture company in which the foreign capital contribution is not allowed to exceed 51%. This limit will be lifted after seven years as from the accession.

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