Official data shows there are now 83,500 foreigners working in Vietnam. Although Vietnam allows foreigners to own houses in the country, many of them are finding it challenging.
Can foreigner buy land in Vietnam?
Foreigners cannot buy and own land, like in many other Southeast Asian countries. Instead, the land is collectively owned by all Vietnamese people, but governed by the state.
As written in the national Land Law, foreigners and foreign organizations are allowed to lease land. The leasehold period is up to 50 years, but in some cases up to 70 years.
At the time I’m writing this article, the Government is considering to extend the leasehold period from 50 years to 99 years, which is positive of course.
Even if the regulations are getting less strict, and will probably loosen up over the years, you need to be careful. There’s no guarantee that you’ll be able to renew your leasehold period for example.
Vietnam’s Land Use Rights (LUR)
Thankfully, Vietnam has a law on land called Land Use Rights (LUR) that reduces the risks for foreigners to invest in Vietnam.
Even if you’re not allowed to own land, you have the right to use land – as stipulated in the LUR. It also gives you the rights to control the land leased or allocated by the Vietnamese state.
Keep in mind that you need to submit a Land Use Rights Certificate (LURC) to the Vietnamese Government before you’re able to lease the land.
Can foreigners buy property from Vietnamese people?
Foreigners often buy property directly from developers on the primary market, or from foreigners that previously bought property on the primary market.
There are restrictions on the secondary market as you can’t buy property from local citizens in case the foreign quota is already filled (30%).
Vietnam ownership certificates of property
When you purchase a property from a developer, it’s important that you receive an ownership certificate. In 2017, foreigners had issues getting their property ownership certificates, this understandably caused some frustration.
So why did this happen?
According to law, foreigners cannot own properties in areas that are reserved to protect the national defense and security.
And it’s up to the Ministry of National Defense and the Ministry of Public Security to decide whether a property is located in an area that is reserved to protect the national and security.
I cannot stress the importance that you make sure that your prospective property can be owned by you as a foreigner, and confirm, prior to the purchase, that you will be able to receive the ownership certificate.
The pink book
The ownership certificate is often referred to as the pink book. The name comes from the small pink book that you should receive after you purchased a property.
The book shows your ownership and rights of your property. It will give you right to lease your property and declare information regarding inheritance, for example.
Shortly speaking, pink books are used for the title to verify the ownership of properties.
The red book
There’s also a red book that’s been used for a longer time than the pink book. The red book is used for the title to ownership of land, instead of physical structures, like houses and condos.
Thus, the pink book is more common for foreigners that normally invest in properties like condos, which are less regulated.
Do I need to receive the pink book when buying property in Vietnam?
Shortly speaking, the pink book is used for the title to ownership of property. Even if an SPA (Sales and Purchase Agreement) can be used to prove that you bought the property, the strongest evidence of ownership is to have both of them.