HA NOI — The Ministry of Construction plans to raise the legal capital requirement of real estate companies to ensure they are viable and operate transparently, says Deputy Minister Nguyen Tran Nam.
The law currently required property developers to have minimum legal capital of VND6 billion (US$300,000), Nam said, adding that real estate firms with limited resources might not be able to meet their business obligations.
The Government is consulting with property developers to determine what their capital needs are likely to be before setting a minimum legal requirement.
Dang Hung Vo, former deputy minister of the Ministry of Natural Resources and Environment, said the new regulation would deter ailing companies from joining the real estate sector. However, he said it would be difficult to determine just how much capital a real estate firm would need to be viable.
But Pham Thanh Hung, deputy general director of Century Real Estate Company, said raising the minimum capital requirement of real estate enterprises would reduce business opportunities for small firms and destabilise the market.
Viet Nam has about 2,500 active real estate projects, occupying an area of 80,000ha. Of those, 1,400 projects are in HCM City and 800 in Ha Noi, as of last October. Of those in the capital, 250 are awaiting Government approval.Source: vnagency.com.vn
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