Due Diligence Procedures for Real Estate M&A in Vietnam

Posted by Written by Arendse Huld Reading Time: 5 minutes

Vietnam is becoming an increasingly attractive destination for mergers and acquisitions (M&As), and the country’s real estate sector is a major contributor to this trend. Here’s what firms should know about due diligence in real estate M&As.

According to data from Mergermarket, there were 184 M&A deals in Vietnam in 2022, up from 109 in 2021, a 68 percent year-on-year increase. Meanwhile, the total value of M&A deals reached US$5.26 billion, down 3.1 percent from 2021.

The real estate industry accounted for a sizable portion of the M&A volume and value in 2022. A total of 19 M&A deals were concluded in the real estate sector that year, up from 12 in 2021. The total value of M&A deals in the real estate sector in 2022 reached US$970 million, up from just US$100 million in 2021. This was also higher than the US$750 million recorded in 2020.

This trend has continued in 2023 despite instability in Vietnam’s property sector, with analysts predicting continued M&A activity by foreign entities in the near future.

Vietnam does not currently allow foreign companies to directly own or acquire land use rights in Vietnam. This means that foreign companies must indirectly purchase land use rights by acquiring a stake in a Vietnamese company or leasing land for a limited period (usually 50 years).

For this reason, many foreign companies choose to access land use rights in Vietnam through an M&A with a local company in order to embark on real estate projects. These processes come with certain risks, which must be rigorously assessed prior to and throughout the M&A negotiations.

Below we discuss the recommended scope of due diligence that foreign companies should conduct when considering an M&A deal in Vietnam’s property sector.

Conducting due diligence for real estate M&A deals in Vietnam

Due diligence in real estate M&A in Vietnam involves a comprehensive examination of various aspects of the property to assess potential risks and opportunities. Below we outline some of the key steps in conducting due diligence on a potential real estate deal.

Legal due diligence

In addition to the standard legal due diligence required for an M&A deal in any sector, there are several additional factors that must be considered when conducting due diligence on a target company in the real estate sector.

First, buyers should verify the legal ownership and the type of land use rights associated with the property of the target company. This will include obtaining and reviewing the land title certificate and land use rights certificate in order to confirm the legal ownership of the property and verify the type and duration of land use rights associated with the property, such as land allocation, land lease, or land ownership.

To this end, buyers should conduct a search at the local land registry to identify any encumbrances, mortgages, or restrictions on the property. It is also important to confirm that the property complies with local zoning regulations and has obtained all necessary permits.

In Vietnam, land titles are managed by the provincial or district-level Land Use Rights Registration Office under the local Department of Natural Resources and Environment. However, Land Use Rights Certificates are issued by the provincial people’s committees.

Financial due diligence

As is required for M&A activity in other sectors, buyers considering an investment in Vietnam’s property sector should conduct thorough due diligence on the financial state of the potential target company. This will include a review of the financial statements of the target company and an examination of its tax records to identify any outstanding tax liabilities or other issues.

More specific to the real estate sector, it is important to identify and evaluate any existing mortgages, liens, or other encumbrances on the property, as well as to check for any outstanding debts or obligations associated with the property.

Where applicable, property lease agreements should also be reviewed to ensure that the terms and conditions meet the requirements for the M&A deal.

Environmental due diligence

Another aspect to consider in the due diligence process is the potential environmental risks and permissions necessary for the intended use of the land. This will include ensuring that the planned use of the land adheres to local environmental laws and development permissions, as well as environmental zoning policies. In addition, buyers should ensure that the property complies with environmental regulations and standards.

In Vietnam, the use of land is governed by the Law on Protection of the Environment, the Law on Energy Efficiency and Conservation, the Construction Law, and the Housing Law, as well as other legal documents.

Buyers should also assess whether the land is subject to an environmental impact assessment in order to be used for the intended project. Under Vietnam’s Law on the Protection of the Environment, certain investment projects, such as projects that use “land parcels situated in wildlife sanctuaries, national parks, historical – cultural monuments, world heritage sites, biosphere reserves, [and] scenic beauty areas”, as well as “projects that can cause bad effects on the environment” are required to carry out an environmental impact assessment.

Technical due diligence

Buyers may also wish to conduct technical due diligence on the property or land that will be used in order to ensure compliance with matters such as construction permits and identify any potential issues with the land or property that poses an investment risk.

This may be done through a physical inspection of the land or property to evaluate matters such as structural integrity, compliance with building codes and regulations, compliance with safety standards, examination of the foundation and substructure, inspection of mechanical and electrical systems, and so on.

Technical due diligence is typically performed by qualified engineers, architects, and other technical experts. Their findings contribute essential information to the overall risk assessment and decision-making process during real estate M&A transactions. The goal is to provide the buyer with a comprehensive understanding of the physical condition of the property and associated risks and opportunities.

Other due diligence considerations

There are several other areas of due diligence that a buyer may wish to conduct prior to or during the M&A process. They include:

  • Market conditions: Buyers may wish to conduct market due diligence in order to assess the current and future market conditions to determine the property’s potential for appreciation or depreciation. In addition, conducting a competitive analysis may be useful for understanding the competitive landscape and potential impact on the property’s value.
  • Insurance: Reviewing existing insurance policies covering the property to understand coverage and potential risks.
  • Exit strategy: Evaluating potential exit strategies and assessing their feasibility and implications.


Conducting due diligence for an M&A in Vietnam’s property sector can be a lengthy and complex procedure, requiring expertise in a wide range of fields, from finance to engineering. It is therefore crucial to work with local experts throughout the due diligence process, including legal advisors, real estate professionals, and consultants, who are familiar with the specific nuances of the Vietnamese real estate market and regulatory environment. For assistance with M&A and other investment deals in Vietnam, contact the M&A experts at Dezan Shira and Associates.

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Dezan Shira & Associates provide business intelligence, due diligence, legal, tax and advisory services throughout the Vietnam and the Asian region. We maintain offices in Hanoi and Ho Chi Minh City, as well as throughout China, South-East Asia, India, and Russia. For assistance with investments into Vietnam please contact us at vietnam@dezshira.com or visit us at www.dezshira.com