| Foreign Ownership of Vietnam Property |
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Government legislation on foreign ownership of Vietnam property restricts the options available for investors. Despite this, investment is possible within the residential real estate, and commercial real estate sectors. Following are key points related to foreign ownership of Vietnam property and how Healy Consultants assists investors achieve their objectives: | ||||
1.
| Foreign ownership of Vietnam property is assisted by the property management services provided by Healy Consultants. By project managing activities such as property maintenance, refurbishments, implementing property security, arranging property valuations, finding tenants, organizing property insurance and ad hoc problem solving requirements, our firm saves clients from these time consuming aspects of property investment. | |||
2.
| Since 1 January 2009, foreign ownership of Vietnam property for individuals living in Vietnam is allowed. Referred to as Circular 13, the legislation allows foreigners to own real estate provided certain conditions are met, including: i) the individual already invests directly in Vietnam ii) the individual is married to a Vietnamese citizen iii) via a company.
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3.
| Land in Vietnam is said to be owned by the people and controlled by the state. Hence foreign ownership of Vietnam property can not include land. Apart from apartments, foreigners residing in Vietnam can purchase a house, with the land being leased from the government. Foreign ownership of Vietnam property can also be executed by forming i) a joint venture company with a local partner ii) a wholly foreign-owned company iii) a Build, Operate and Transfer (BOT) company or one of its variants. | |||
4.
| In Vietnam, the term of land use rights registration is used instead of land registration. The purchaser of receives the Land Use Rights Certificate (LURC) once the property transaction is complete. The LURC guarantees the rights over the land as well as providing the description of the property attached to the land. | |||
5.
| According to the Global Property Guide, the buying cost of property in Vietnam is approximately 6%. While this is not high, taxes for foreign ownership of Vietnam property are significant. Healy Consultants provides invaluable tax and accounting advice to investors to ensure all tax obligations are met. Property taxes include value added tax of 10%, land use right fees of 1%, income tax/capital gains tax at 25%, and withholding tax of 10%.
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6.
| Borrowing to buy property in Vietnam is not common. The mortgage market in Vietnam is immature, with loan-to-value ratios rarely exceeding 50%, so investors generally use international mortgages to fund property purchases. Healy Consultants assists clients with foreign ownership of Vietnam property by arranging appropriate property finance, including negotiating mortgage terms and conditions. International banks including ANZ Bank, DBS Bank and OCBC Bank are examples of banks used.
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7.
| Healy Consultants offers comprehensive professional advice and management services to assist clients with their Vietnam investments. Consideration is given to the needs of clients such as budget, property locations, size, proximity to schools, and security requirements to develop suitable options for foreign ownership of Vietnam property. |
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8.
| The Vietnamese government is addressing the real estate laws in their country. Decree 153 is one legislation that relates to the funding of projects that are sold off-plan. Previously, developers would take payments prior to any commencement of work at the property site and no adherence to timelines and completion dates along the way. Under this Decree, the first payments for residential property are not required until work on the foundations has been completed. |
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9.
| Healy Consultants will appoint and supervise a local lawyer to ensure the legal matters associated with foreign ownership of Vietnam property are adhered to. An experienced lawyer helps avoid any problems occurring during the transaction process and protects the interests of the investor. |
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10.
| Restrictions within the new law mean foreign individuals will be permitted to own apartments but only in approved developments, the lease period is 50 years and the property owner must reside in the property. While this last restriction of Circular 13 is not favourable for investors outside of Vietnam, it provides an option to the growing number of foreigners relocating to Vietnam for employment within its growing commercial opportunities. |
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11.
| For clients migrating to Vietnam, Healy Consultants will assist clients arrange requirements such as immigration visas, relocation services, and familiarization with their new country.
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Contact Us | ||||
For further information on foreign ownership of Vietnam property, please contact us at our Singapore office at (+65) 67350120 or email us at email@healyconsultants.com
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