Renting a house, premises, or office requires business registration?

Do I need a business license to rent a house, premises, office, warehouse, or factory? What are the conditions and procedures for renting a house? Things to note when renting a house, premises, etc.

Is renting a house or premises a real estate business?

According to Article 11 of the 2014 Law on Real Estate Business, individuals and organizations are allowed to conduct real estate business in the following forms:

• Buy houses, construction works for sale, rent, hire purchase;
• Renting houses and construction works for sublease;
• Building houses and other construction works for sale, lease, or lease-purchase on land for which the State has granted a land use right certificate, or land transferred from individuals, organizations, or households;
• Renting land from individuals, households, and organizations to build houses and other construction works for lease according to the correct land use purpose…

Thus, renting houses, business premises, warehouses, factories for production, business, etc. is a form of real estate business. Individuals and organizations have the right to rent real estate owned by individuals or organizations or have the right to sublease part or all of the real estate they have rented if the lessor (property owner) agrees.

Real estate business conditions – house, premises, land rental

Pursuant to the provisions of Article 10 of the Law on Real Estate Business 2014, amended by Point a, Clause 2, Article 75 of the Investment Law 2020:

• In case an individual or organization conducts real estate business in the form of buying, selling, or leasing on a large scale and regularly, it is necessary to establish a company, enterprise, or cooperative;
• In case individuals, organizations, and households sell, lease, transfer, or lease-purchase real estate on a small scale and irregularly, they do not have to establish a company or enterprise, but must declare and pay taxes according to the provisions of law.

➨ Thus, the conditions for real estate business in the form of renting houses and business premises in general are as follows:

• In case individuals or households rent, rent and then sub-rent houses or premises for living or doing business on a small scale and irregularly, they do not have to establish a business. Instead, individuals or households can apply for a tax registration certificate (according to form No. 10-MST) to fulfill the obligation to declare and pay personal income tax from real estate business activities;
• In case an individual or business leases or subleases real estate such as offices, houses, buildings, or factories for use as offices or for regular, large-scale business, it is mandatory to register to establish a business, which means applying for a business license. 

>> See more: Instructions for declaring property and house rental taxes online.

Instructions for business registration procedures to rent out houses and premises

Depending on the scale, number of rental spaces and annual revenue, you can choose to register your business in the following forms:

1. Apply for tax registration certificate

Some specific cases of renting small-scale houses and premises that are not regularly required a tax registration certificate:

• Landlords rent out houses and premises for business and trading;
• The owner directly rents out boarding houses, entire houses, and apartments for living;
• You rent a house with many floors and rooms, then renovate it and rent it out at a higher price;
• You rented a business premises but did not use all of the area so you sublet part of the premises.

———

Currently, fdiinvietnam.com provides tax registration certificate application service for individuals with income from business and real estate rental in all provinces and cities nationwide with very preferential fees. 

You can contact fdiinvietnam.com at 0978 578 866 (North) – 0946 724 666 (Central) – 0978 578 866 (South) for advice and specific quotes.

2. Establish a real estate company to rent houses, offices, and business premises

➨ Some specific cases of renting houses and large-scale business premises with high revenue require establishing a company:

• You rent a building with many apartments, then invest in renovation, interior decoration and then rent out the apartments at a higher price;
• You rent an office building or rent 1 or more floors from the investor, then divide it into rooms of different sizes to rent as offices or rent them as shared offices or coworking spaces… 

➨ Documents for establishing a real estate rental company (renting houses, business premises):

You can submit your application to establish a real estate company at the Department of Planning and Investment of the province or submit it online on the National Business Information Portal.

After 3 – 5 working days from the date of receiving valid documents, the Department of Planning and Investment will issue a business registration certificate (business license) to the real estate company.

>> See more: Conditions and procedures for establishing a real estate business company.

3. Add real estate business line

In case a business wants to lease real estate owned by the business or lease and then sublease such as offices, warehouses, etc., the business must complete procedures to add the real estate business line and fully meet the conditions according to the regulations of this industry.

➨ Some cases need to add real estate business lines:

• The company wants to rent out offices, warehouses, and factories owned by the company;
• The company rented an office floor that was too large and wanted to sublease part of the area to another company;
• The company rents office floors from the investor and subleases them to other companies at a higher price.

➨ The real estate industry code that needs to be registered is:

• Industry code 6810: Real estate business, land use rights of owners, users or lessees;
• Industry code 6820: Real estate consulting, brokerage, auction, land use rights auction.

➨ Additional documents for real estate business for the company:

Enterprises submit their applications at the Department of Planning and Investment of the province or submit them online on the National Business Information Portal.

Within 3 working days from the date of receiving valid documents, the Department of Planning and Investment will complete the procedures and issue a certificate of confirmation of additional business lines.

>> See more: Procedures for changing and adding business lines.

Necessary notes when renting and leasing business premises

1. If you rent a house or premises for business or trading (for example, opening a hair salon, grocery store, restaurant, etc.), before renting, you need to check whether the landlord or previous tenant has used this address to register a business household or not. If you have registered a business household, you must go to the District/County People’s Committee to request the cancellation of the business household before you can register a business household at this address;
2. Subleasing of offices, houses, warehouses, factories, etc. must have the consent of the owner (lessor) and must be recorded in the contract or contract appendix;
3. For foreign invested companies, if they sublease real estate, they must complete procedures to add business lines and at the same time complete procedures to change the investment certificate (if any);
4. Offices, houses for rent, business premises, warehouses, factories, etc. must have complete and valid legal documents (such as lease contracts, red books, etc.) and no ownership disputes;
5. The content of the real estate lease contract must clearly state the rights, obligations and responsibilities of the lessee and the lessor, and must ensure that the leased property is not misused, for example: the apartment is only for residential purposes, and cannot be rented for the purpose of a nursery or medical examination and treatment.

Some frequently asked questions about business premises leasing procedures

Call us at  0978 578 866 (North)  –  033 9962 333 (Central)  –  033 9962 333 (South)  for support.