HANOI – Vietnam’s Ministry of Construction has recently proposed to relax its real estate laws in order to allow a greater amount of foreigners and foreign organizations to buy property in the country as part of an effort to reduce real estate inventory.
Specifically, the Ministry proposed that organizations such as foreign investment funds, banks, Vietnamese branches and representative offices of overseas companies, in addition to foreigners with valid Vietnamese visas, be allowed to buy homes (i.e., apartments, independent houses and town houses/villas that are no bigger than 500 square meters).
Furthermore, the proposal pushes to allow such foreign buyers to lease their properties to other individuals or sell their properties 12 months after obtaining an ownership certification – something that is currently not allowed.
So far, the Ministry has proposed two different options for individual purchasers: one in which foreigners can buy any number of housing properties; and the second limiting the total number of properties foreigners can buy to just one or two. The number of houses an organization can buy would depend on the total number of foreign employees it employs in Vietnam.
The proposal also contains two options for the duration of ownership for foreign property owners: one, an ownership period of 50 years with the possibility of another 50-year extension after expiration; or two, a 70-year ownership period without any extension possibilities.
The Ministry did not specify an ownership duration for foreign organizations but, under the current regulations, an organizations’ property ownership period will be valid until the expiration date of its investment registration documents.
The current foreign property ownership laws took effect on January 1, 2009, and allows for foreigners to buy apartments (but not houses) for an ownership duration of 50 years. There is no limit on the number of apartments a foreign individual or organization can buy, however at least one cannot be leased or used for purposes other than residential living.
The current laws only allow for five specific categories of foreign individuals and organizations to own apartments:
- Individuals who invest directly in Vietnam or who are employed in management positions by domestic or foreign-invested companies in the country;
- Foreigners who receive certificates of merit or medals from the president or government for their contributions to the country;
- Foreigners who work in socioeconomic fields, hold at least a bachelor’s degree or higher and possess special knowledge/skills;
- Foreigners who are married to Vietnamese nationals; and
- Foreign-invested companies operating in Vietnam that need to buy homes for their employees.
According to the Ministry, a total of only 126 expatriate workers and foreign organizations have purchased apartments throughout Vietnam by the end of June 2013, with most of them being located in the southern and south-central cities of the country (i.e., Ho Chi Minh City, Ba Ria-Vung Tau, Binh Duong and Khanh Hoa Province).
Of the total 126 foreign apartment owners, 20 percent are organizations.
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