Vietnam’s 12th Draft Law of Residential Housing Expected to be Favorable Towards Foreigners

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HCMC – As foreign investment in Vietnam has increased significantly over the past few years, demand for housing from foreigners is also accelerating.  At a National Congress meeting on June 18th, many Congressmen expressed their approval towards the 12th Draft Law of Residential Housing, which proposes more opportunities for foreign organizations and individuals who wish to purchase housing in Vietnam.

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Below is an excerpt from the proposed draft law, Chapter IX – Residential Housing in Vietnam, which applies to Vietnamese residing abroad and to foreign organizations and individuals.

According to Article 157, 158 and 159, foreign organizations and individuals are divided into three categories:

  • Foreign organizations and individuals investing in construction of buildings for lease or for purchase;
  • Foreign invested enterprises, branches, and representative offices of foreign owned enterprises, foreign investment funds without a real estate business function, and branches of foreign banks that are currently operating in Vietnam; and
  • Foreign individuals that are allowed entry to Vietnam.

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The conditions and rights for foreign organizations and individuals are varied based upon the different groups:

  • Foreign organizations and individuals investing in construction of buildings for lease or for purchase:
    • Need to obtain certificate of investment from the Vietnam government and construct buildings in accordance with the Vietnam Investment Law; and
    • In the case of buying and lease purchasing, investors will not be granted certification to own such buildings. However, the investors are still allowed to own the buildings if they are renting them out.
  • Foreign invested enterprises, branches and representative offices of foreign owned enterprises, foreign investment funds without a real estate business function, branches of foreign banks that are currently operating in Vietnam:
    • Need to obtain certification of investment or similarly related documents granted by the Vietnam authorized departments.
    • Eligible to buy, rent, receive, donate or inherit housing in Vietnam upon the conditions that:
      • Only buy, rent, receive, donate and inherit commercial housing (including apartments and private houses) belonging to investment projects whose prices are higher than the government’s regulated prices based on different areas, periods and regions that do not prohibit foreigners from residing in accordance to regulations of the Provincial People’s Committee;
      • Only buy a maximum 30 percent of the apartment rooms in an apartment building; in case of private houses, only buy maximum 250 houses within a financial unit equal to a ward; and
      • Owning houses in accordance with the agreement in the residential contract and not exceeding the time duration written in the certificate of investment.
  • Foreign individuals that are allowed entry to Vietnam
    • Need to obtain Vietnam visa and must not belong to preferential treatment groups, such as embassies;
    • Eligible to buy, rent, receive, donate or inherit housing in Vietnam upon the conditions that:
      • Only buy, rent, receive, donate and inherit commercial housing (including apartments and private houses) that belong to investment projects whose prices are higher than the government’s regulated prices based on different areas, periods and regions that do not prohibit foreigners from residing in accordance to regulations of the Provincial People’s Committee;
      • Only buy a maximum of 30 percent of the apartment rooms in an apartment building; in case of private houses, only buy maximum 250 houses within a financial unit equal to a ward; and
      • Owning houses in accordance with the agreement in the residential contract and not exceeding 50 years from the certified date, but can apply to extend this period if needed.

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