There is a common misconception that foreigners or foreign invested companies not allowed to buy, own property in Vietnam. In reality, it is possible.
However, there are certain conditions that you need to bear in mind when buying property in Vietnam.
Can foreigners buy property in Vietnam?
The answers is “Yes, they can buy as many units as they want, as foreigners currently don’t have any restrictions on the amount of properties they can buy.”
Since 2015, the local government introduced the Vietnamese Law on Residential Housing, which made it remarkably easier for foreigners to buy property in Vietnam.
How difficult is the property purchase process?
Foreigners are not allowed to own land. In fact, even citizens are not allowed to own land. In Vietnam, land is theoretically collectively owned by the people, but regulated by the State.
Foreigners who are residents in Vietnam are permitted to purchase dwelling houses. They can own a house but not the land on which it is built. They have the option to lease the land from the State.
However the foreign estate agent in Vietnam, Global Business Services Company (GBS), is marketing a 50-year lease scheme, which is almost a sale. Under this scheme, the buyer acquires a right to the apartment for 50 years, and the right to renew the lease at the term’s expiry without payment of additional rent. If property ownership by foreigners becomes legal within that time, the complex owner will transfer the apartment title to the buyer. If the building for some reason has to be sold, the buyer will get a pro-rata share of the proceeds.
And because the contract is only a lease, the buyer can sub-let his apartment. In other words, the contract gives the buyer many of the rights of ownership. GBS for example supports the developer selling 38-year leases in Ho Chi Minh City, which has been in existence 12 years (the maximum lease length under Vietnamese law is 50 years).
A foreign investor may also invest in Vietnamese real property by forming a joint venture company with a local partner, or a wholly foreign-owned company, or by forming a Build, Operate and Transfer (BOT) company or one of its variants.
Foreigners who are residents in Vietnam can own dwelling houses but cannot sub-lease these dwellings. Foreign residents can also sell, donate, inherit, or give dwelling houses as gifts. But where they terminate their residence in Vietnam without disposal of their dwelling, 90 days after their departure from Vietnam their dwelling house certificates will automatically cease to be valid, and the Vietnamese State will manage and use their houses.
One thing that separates real estate transactions in Vietnam from the rest of the world is it’s done in pure gold. It is very important to keep this in mind when looking for a property. The buyer must be aware of the prices and conversions at all times.
Registering property in Vietnam is not particularly onerous, taking about 43 to 71 days to finish the four procedures needed, which can be support by the lawyers at GBS, and costing considerably less than elsewhere in the region.
What is the summary the most important information to take note of Vietnam’s new law to foreign ownership of property?
- Foreigners can buy properties by simply possessing a tourist visa
- There’s no cap to the amount of properties you can buy
- Foreigners are restricted to buying a maximum of 30% of the units in condominiums and cannot own more than 10% of the properties in a landed project
- Foreigners can now buy houses, but only 250 of the houses in a given ward (division).
If finding it challenging to buy a property and obtain title documents in Vietnam as a foreigner, you should contact a lawyer or talk to an agent. GBS can be a good choice.