On the morning of July 11, 2024, the Vietnam International Arbitration Centre (VIAC) and the Ho Chi Minh City branch of the Vietnam Chamber of Commerce and Industry (VCCI - HCM) jointly organized an in-person seminar titled "Legal and financial issues in real estate M&A transaction under the context of new legal framework." The event was a great success, with the participation of nearly 200 delegates, including businesses, lawyers, and media outlets in Ho Chi Minh City.
Mr. Trần Ngọc Liêm, Director of the Vietnam Chamber of Commerce and Industry (VCCI) - Ho Chi Minh City Branch
In his opening remarks at the seminar, Mr. Trần Ngọc Liêm, Director of the Vietnam Chamber of Commerce and Industry (VCCI) - Ho Chi Minh City Branch, highlighted that the three key legal documents introduce significant new features focused on creating a healthy and safe development environment, increasing market orientation, and contributing to harmonizing interests while improving state management efficiency regarding land. Mr. Liêm expressed hope that these changes would help "filter" the market, increase competition, and encourage businesses to operate more professionally to survive. He emphasized that as the market and legal framework undergo significant shifts, having a precise understanding and accurate assessment of both the market and M&A transactions is seen as a "golden" factor for investors engaging in these deals. Mr. Liêm welcomed this seminar as a meaningful event for the business community and hoped that through the discussions, participants would gain a clearer picture of the market trends in real estate M&A transactions, thereby equipping businesses with the necessary knowledge to successfully navigate these deals.
Mr. Lê Xuân Đồng, Director of EY Parthenon Strategy Partner, EY Consulting Vietnam
At the beginning of the seminar, Mr. Lê Xuân Đồng, Director of EY Parthenon Strategy Partner, EY Consulting Vietnam, delivered a presentation on "M&A Trends in the Real Estate Sector in Southeast Asia and Vietnam." Mr. Đồng noted that in the first half of 2024, the M&A market in Southeast Asia showed a decline in both total value and the number of transactions. However, transaction values increased by nearly 9% compared to the same period the previous year. Specifically, from 2023 to the first six months of 2024, registered foreign direct investment (FDI) in the real estate sector in Vietnam surged by 61.4%. This indicates that Vietnam's real estate market is highly attractive to foreign investors from the U.S., Singapore, Japan, and South Korea due to stable economic growth potential. Industrial real estate, retail properties, and residential real estate projects were among the most sought-after segments for investors. Additionally, foreign investors are increasingly favoring projects that meet “green” and sustainable development criteria, as these allow them to access green financing sources at competitive interest rates during acquisition deals.
Following Mr. Lê Xuân Đồng’s presentation, Dr. Cấn Văn Lực, Chief Economist at BIDV (Bank for Investment and Development of Vietnam) and a member of the National Fiscal and Monetary Policy Advisory Council, shared insights on the current state and solutions for Vietnam’s real estate financial market. According to Dr. Lực, six key factors affect the real estate market, with financial issues—such as taxes, fees, capital sources, and the financial capacity of enterprises—being particularly critical. He noted that, based on estimates, 49.3% of capital in the financial market, as it relates to the economy's funding capacity in 2023, came from bank credit sources. Thus, with the ongoing policy shift from a "tight and cautious" approach to a "flexible and relaxed" one, lending rates are expected to remain low through 2024-2025 to focus on controlling and stabilizing the market. Dr. Lực believes that Vietnam still has substantial room for growth in the housing credit market, industrial real estate, and other segments. He emphasized that addressing legal obstacles, accelerating public investment disbursement, and ensuring balanced development—while tightly controlling risks—are key steps in fostering sustainable growth in the real estate sector.
Mr. Nguyễn Minh Đa, Deputy General Director of Forvis Mazars Vietnam
In the following presentation, Mr. Nguyễn Minh Đa, Deputy General Director of Forvis Mazars Vietnam, shared insights on tax obligations in real estate M&A transactions and provided guidance on tax management at each stage of the M&A process. Mr. Đa explained that investors acquiring real estate from real estate companies would not be subject to land use tax; instead, they would only incur general taxes on assets and structures on the land. The company would be liable for a corporate income tax of 20%, and profits could not be offset against losses from its core business contracts. Based on his personal experience, Mr. Đa noted that transfer activities carry tax risks, as well as time and costs associated with establishing and operating real estate companies and determining their valuations.
Ms. Nguyễn Trúc Hiền - Partner of the Vietnam International Law Firm (VILAF)
Next, Ms. Nguyễn Trúc Hiền - Partner of the Vietnam International Law Firm (VILAF), shared insights on the changes in legal regulations impacting real estate M&A activities. Ms. Hiền noted that the real estate market continues to be a bright spot attracting the interest of both domestic and foreign investors. However, there have historically been many barriers, particularly legal ones, preventing M&A activities from taking off. In the near future, many comprehensive regulatory changes are expected to facilitate investors in compensation and land clearance processes, leading to an increase in land prices based on market value. This will benefit landowners while alleviating difficulties for investors during compensation in various projects. The 2024 Land Law also adds more rights for foreign investors, such as the ability to acquire land use rights in industrial zones, industrial clusters, and high-tech zones, as well as land use through real estate project transfers and expanded methods for foreign-invested enterprises to obtain land use rights. Ms. Hiền emphasized that these opening regulations are a prerequisite to welcome a wave of foreign M&A in this market. However, she advised investors to conduct thorough research and understanding of the legal framework when considering investments to ensure smooth transactions.
Ms. Hoàng Nguyễn Hạ Quyên – Managing Partner at LNT & Partners, and arbitrator at the Vietnam International Arbitration Centre (VIAC), as well as a mediator at the Vietnam Mediation Centre (VMC)
Ms. Hoàng Nguyễn Hạ Quyên – Managing Partner at LNT & Partners, and arbitrator at the Vietnam International Arbitration Centre (VIAC), as well as a mediator at the Vietnam Mediation Centre (VMC), presented a discussion on the topic "The Differentiation of Real Estate M&A Transactions and Newly Arising Legal Situations." According to statistics from the General Statistics Office, recent times have seen foreign direct investment (FDI) registered in Vietnam increase by over 13% compared to the same period in 2023, with real estate business activities rising 4.7 times year-on-year, accounting for nearly 20% of total newly registered capital. Notably, investors are showing more interest in housing projects, industrial zones, and resort tourism areas. Among the various forms, common transaction structures include the transfer of capital within project companies, the transfer of projects, or portions of projects. Additionally, Ms. Quyên shared insights into the legal aspects of capital transfer, real estate project transfer, and land lease rights transfer.
Ms. Nguyễn Thị Thanh Minh - Special Counsel and Head of Dispute Resolution Practice at ACSV Legal
Ms. Nguyễn Thị Thanh Minh - Special Counsel and Head of Dispute Resolution Practice at ACSV Legal, addressed the complexities, causes of disputes, and requirements for companies when resolving real estate M&A disputes in the new context. In practice, prior to the updates regarding the authority of arbitrators over land-related disputes in the 2024 Land Law (according to Article 236), many disputes had arisen from contracts for the sale of equity interests in which the target company owned real estate in Vietnam. There remained ambiguity in classifying "land disputes" versus "commercial disputes." The 2024 Land Law introduced more flexibility, allowing arbitrators to have the authority to resolve land disputes as stipulated by commercial arbitration law.
The discussion session featured the participation of all Experts, moderated by Mr. Châu Việt Bắc
After the diverse presentations by the experts, the discussion session was conducted under the coordination of Mr. Châu Việt Bắc, Deputy Secretary-General of the Vietnam International Arbitration Centre (VIAC). The session featured lively and active responses and exchanges among the attending experts and guests. This discussion opened up solutions for businesses to implement and control M&A activities that are suitable and well-adapted to the new legal framework.
Overview of the Seminar
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