New regulations on real estate for foreign individuals and entities

Transactions of real estate are regulated by two laws: Law on houses No. 65/2014/QH13 and Law on real estate trading No. 66/2014/QH13. The both laws are issued on 25 November 2014 and effective from 1 July 2015.

 

 

 

There are changes in regulations for foreigners, in details:

 

Foreigners having home ownership in Vietnam

 

Foreign individuals, organizations in Vietnam; foreign individuals and organizations investing in building house projects in Vietnam can have home ownership in Vietnam.

 

Foreign individuals and organizations investing in building house projects in Vietnam have similar rights and obligations as domestic ones. However, there are still limits in the right and obligations for other foreign individuals, organizations:

 

  • Maximum ownership of 30% of apartments in a condominium; 250 houses in an area having ward-size population;

  • Duration of home ownership of a foreign individual is no more than 50 years from the day of being granted certificate and is no longer than the duration of its certificate of investment for a foreign entity;

  • Foreign individuals are entitled to lease their house(s) and have to pay taxes on income from the lease. Foreign entities can only use their houses for the uses of their employees but for any other purposes;

  • Payments for buying/ leasing houses must be made through financial institutions operating in Vietnam;

  • Foreign individuals marrying to Vietnamese citizens should have same rights and obligations as Vietnamese;

  • Before the due date of home ownership, home owners can transfer their houses to another parties, otherwise the house(s) shall be nationalised.

 

Foreigners trading real estate and real estate services

 

According to the Law, overseas Vietnamese and FDI firms are allowed to trade real estates and provide real estate services, meanwhile other foreign individuals and entities are only allowed to provide real estate services.

 

Real estate trading

 

Foreign individual/ entity having large-scale and regular real estate trading must establish a company with minimum charter capital of VND 20 billion deposited and confirmed by a commercial bank operating in Vietnam.

 

Overseas Vietnamese people are entitled to the following types of real estate trading:

 

  • Rent of houses/ construction works for lease;

  • Building of houses/ construction works on land rented from the State for sale, lease, or finance lease;

  • Building of houses/ construction works on land rented from organizations, households or individuals for lease;

  • Transferee of whole or a part of real estate projects to build houses/ construction works for sale, lease, or finance lease;

  • Building of houses/ construction works on land granted by the State for sale, lease, or finance lease;

  • Building of houses/ construction works for proper trading purposes in industrial zones, export processing zones, export-processing zones, hi-tech zones, or economic zones.

 

Foreign entities, on the other hand, are entitled to similar types of trading, except for investment in land rented from organizations, households or individuals and land granted by the State.

 

Before sale or finance lease of off-plan property, investor’s financial obligations must be guaranteed by a competent commercial bank in case of the investor’s failure to hand over the property to clients on schedule. A list of 33 competent banks was issued by the State bank of Vietnam, with absence of some large ones such as Sacombank, VIB, and  Eximbank.

 

Provision of real estate services

 

Real estate services include real estate brokerage, real estate exchange, real estate consultancy, and real estate management.

 

The conditions for real estate brokerage service providers are speficic for individuals and entities, irrespective of their nationalities:

 

  • Any individual is entitled to provide real estate brokerage service independently, provided that he/ she has a brokerage license. He/ she is subject to tax liability in accordance with current laws;

  • An enterprise must have at least 2 employees having real estate brokerage licenses;

  • It is forbidden a real estate broker to act as a contracting party in a real estate transaction.


For provision of real estate exchange and real estate management services, an enterprise must be set up with at least 2 employees having real estate brokerage licenses.