Viet Nam Ferimar Resort Project
Location : T1,T2,T3, Tan Thang Commune, Ham Tan District, Binh Thuan Province, Vietnam
Area : 3,284,446m2
Amount Required: USD20 million
A. Project Permits
It takes about 2 years to obtain the project investment certificate with 100% foreign investment in Vietnam and about 3 years to complete business license after the investment certificate has been obtained. In order to obtain the business license, a lot of fees and expenses must be paid off that has caused many projects break off in the middle of their process. Normally, it takes about 4-5 years to complete business license with 100% foreign investment. Therefore, most foreign construction companies purchase projects in which business licenses are all completed with expensive prices from Vietnamese enterprises and they are now constructing these projects.
B. Many Risks on Compensation Payment
The most difficult matter for property development in Vietnam is land compensation. In accordance with the act on land compensation, projects with 100% foreign investment strictly follow the act on national land compensation and all procedures. The local government will negotiate with local people and after these negotiation come to a satisfied result, they will compulsorily comply these rules. However, for projects of Vietnamese enterprises or co-investment by Vietnamese enterprises and foreign ones, these enterprises have to do all procedures on site clearance and compensation by themselves difficultly and this often takes about 4-5 years. Because of this reason, many joint ventures between Vietnamese enterprises and foreign ones must quit their project although they have invested a huge amount of money and time for it.
C. Overloaded Situation of Apartments and Office Buildings
In Ho Chi Minh City and Hanoi, overloaded situation of apartment and office building provision causes all construction companies in both Vietnam and overseas face many difficulties.
D. Outdated Equipments of Resorts
Vietnam has been developing international resort construction projects only since 2008. All equipments for previous projects are outdated. Currently, there are many resorts along the coastline of Southern region of Ho Chi Minh City but most of them are only small-scaled projects and there is no mixed-use resort that can meet various needs of foreign visitors. And companies that has been investing in resort construction since 2008 up to now has been earned many profits because land values have also been risen significantly.
PROJECT’S STRONG POINTS
1. The project is the first international mixed-use resort project in the nearby region of the coastal Southern of Vietnam.
2. In comparison with the payments for site clearance and compensation, till now the project land value is beyond it a very far distance.
The big profits of this can easily be seen, because if we only count for the land purchase, it is clearly that the land value is increased at least 10 times.
3. Currently in Vietnam, the situation (or condition) for doing business in villas and resorts is still stable. At cities, it is not favorable to do business in apartments; however, it will be completely favorable if we do business in resorts.
4. The process of paying for site clearance and compensation expenses is done simultaneously with the construction & villa sales installment process, and also simultaneously with the infrastructure construction process for villas.
5. Because this is the first sales installment, if the business condition is favorable, the huge profits that we can gain from the small investment fund can immediately be seen.
6. This project is a wide-scaled luxury seaside resort project with the white sandy beach’s spread of 80 m and beach’s length of 3 km.
Strong points of our project (objective opinions):
There are about 50 to 60 resorts with different scales along the coastline of Southern region which is contiguous with Ho Chi Minh City, Vietnam.
Among these resorts, there is Ho Tram Strip Casino, which is being constructed to become a tourist area with all provided facilities as of an international resort.
In our opinion, the remaining resorts in the area which only provide residential and restaurant facilities are not so suitable for becoming a tourist area.
In addition, all current facilities of resorts in Vung Tau City just provide services for relaxation, so there has not been any resort’s facility along the Southern coast of Vietnam that can be compared with an international resort. Once our project is completed, it will become a relaxation and sightseeing place with all provided facilities as of an international resort in this coastal area.
Particular strong points of our project:
There is a 3.5 km beautiful white sandy beach.
It is the first resort which has a Powered Hang- glider Practice Field in Viet Nam.
It is the first resort which has a Relaxed Hospital in Vietnam.
It is the first resort which has Marina facilities in Vietnam.
It is the first resort which has Leisure & Entertainment facilities in Vietnam.
It is the first resort which has a Workshop and Seminar Center in Vietnam.
It is the first resort which has a Vietnamese Traditional Village in Vietnam.
It is the first resort which has a Shopping Mall in Vietnam.
It has Condominiums and 5-star hotel bordering the beach.
Resort land lots can be subdivided to sell for foreign sub-investors individually based on their nationality.
It is the first resort in Viet Nam that provides facilities for beach sports such as motorboats, powerboats, windsurfing, jet-skis, etc.
We can do business on rowing games on the lake because we have already planned to construct a man-made lake in Silver Town area.
It is the first resort which has a Golf Course in Viet Nam.
The unique of our project:
1. The land price is cheap, so we can get rather much profits after finishing construction.
2. It is the first complex resort along the Southern coastline of Viet Nam.
3. There will be no risks because Vietnam government supports us in all fields.
4. Sun Resort Vina Co., Ltd. can cooperate with investors who intend to invest into the projects that will be carried out in future.
5. At present, the Vietnam’s government has planned to construct Son Mi new town, a complex factories area, a container port that is about 10 kilometers to the North from our project. These projects are carried out by companies from United Arab Emirates.
The total land area is 39,210,000 m2 in which area for new town is 13,070,000 m2 and the remaining area of 26,140,000 m2 is for factories construction. Factories’ land areas are being compensated at the phase 1. The expected time for completion of these projects is within next five years.
V. COMPENSATION LAW ON REAL ESTATE DEVELOPMENT IN VIETNAM
According to Vietnam’s law:
1. Our project is a project with 100% foreign investment capital. The site clearance and compensation work, therefore, will be executed same as government’s projects (it means that the government will revoke lands and make lease to investors) (Sun Resort Vina Co., Ltd. is a one-single member limited liability company with 100% foreign investment capital).
The land recovery coercion can be executed in this case.
2. This project is different from projects in which Vietnamese joint ventures and Vietnamese businesses join in together by contributing their capital and the land use right.
The site clearance and compensation procedures for Vietnamese businesses will be based on the joint venture legal entity basic. These Vietnamese businesses handle all compensation by themselves (only when there is any obstacle in the site clearance and compensation process, they can ask for helps and supports from the local authorities)
The land recovery coercion cannot be executed in this case.
3. Land Clearance & Compensation Costs and Land Rent (for organizations with 100% foreign investment capital)
Under legal regulations, the Government will revoke lands, do the site clearance and compensation process and have cleared lands leased to foreign organizations. However, in reality, the Government do not have enough budget to pay for these land clearance and compensation costs; therefore, investors have to spend their own money paying for these costs in advance. These advanced amounts will be deducted from the Land Rent (in case when the land clearance and compensation costs are over the total land rent, the balance will be deducted from taxes or counted to the development fees).
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