Important Notes On Foreign Real Estate Ownership And Long-Term Residence In Oversea

ARTICLES

Important Notes On Foreign Real Estate Ownership And Long-Term Residence In Oversea

LEGAL BASIS

  • Law on Vietnamese Nationality 2008, amendment on 2014;
  • Law on Housing 2014;
  • Decree No. 138/2006 ND-CP Detailing The Implementation Of The Civil Code’s Provisions On Civil Relations Involving Foreign Elements;
  • Decree No. 70/2014/ ND-CP Detailing The Implementation Of Several Provisions Of The Ordinance And The Amended Ordinance On The Foreign Exchange.

CONTENT

I. Legal Issues When Vietnamese Citizen Own They Foreign Real Estate

1| Regulations on Vietnamese Citizen’s foreign real estate ownership

Vietnamese legal system does not contain any provisions nor regulations prohibiting the possession of foreign real estate. However, one of many important points of owning foreign real estate is how to transfer, exchange domestic currencies to abroad for the purpose of purchasing and owning foreign real estate.

Law on foreign exchange in Vietnam and especially clause 2 article 7 of Decree 70/2014/ND-CP regulated that Vietnamese Citizen have their right to transfer currencies/foreign currencies abroad for many different purpose, whereas included point d, đ, e and g are:

d) on purpose of transferring allowances for relatives who in abroad;

đ) on purpose of transferring inheritance currencies to the heirs who in abroad;

e) on purpose of transferring currencies under circumstance of foreign settlement;

g) on purpose of one-way transferring for other legitimate needs.

It could be seen that Vietnamese legal system does not prohibit Vietnamese Citizen from transferring currencies to own foreign real estate. Especially in point g, it is conceivable that currencies transferring/ foreign currencies on purpose of purchasing house or real estate is “other legitimate needs”. However, it should be noted that the transferring of currencies on purpose of purchasing and owning foreign real estate must be consistent with the above purposes.

Pursuant to clause 2 article 7 Decree 70/2014/ND-CP regulated that Vietnamese Citizen have their right to transfer currencies/foreign currencies abroad, depend on specific purposes, the Organization in charge of transferring and exchanging shall request the senders a number of specific papers and documents. Under specific circumstance of foreign settlement, the transferring and exchanging Organization shall require the following documents to conduct the transferring and exchanging activities:

  • Documents of foreign competent authority which authorizing the settlement or document proving the permanent residence abroad (residence card, residence visa, …);
  • Household registration in Vietnam and a copy of the passport of the person who is in progress of settlement;
  • Documents proving the origin of the foreign currencies to be transferred abroad.

2| Notes

The reality situation has the following ways to apply for purchasing and owning foreign real estate:

  • The first way, is to operate through the method of establishing enterprise, investment where Vietnamese Citizen want to purchase and own foreign real estate. This method is understood as applying for a foreign investment procedure at Ministry of Planning and Investment, then using this investment license to transfer money to foreign countries to purchase real estate. However, this method has some disadvantages that are managed by the Ministry of Planning and Investment. In addition, this foreign exchange activity can only be performed with a bank account which is registered with State Bank and the currencies amount must be in accordance with the investment capital amount by the investment certificate. However, this way is not really appropriate and accurate as prescribed by law.
  • Second way, by having a relative of a nationality who wants to settle in the name of purchasing real estate, then carry out foreign exchange in the form of a pension to relatives abroad, transferring currencies to the foreign beneficiary and then use that amount of currencies to purchase real estate. The downside of this is it depend on abroad relatives and sometimes not everyone can meet these conditions.

However, it is important to understand that Vietnamese legal system only covers domestic issues. Regarding the possession of foreign real estate, Vietnamese legal system does not prohibit nor support nor protect the above matter. In addition, this issue is also depending on the country where Vietnamese Citizen want to purchase and own foreign real estate.

II. Legal Issues Of Vietnamese Citizen And Foreign Settlement 

1| How is the foreign settlement prescribed by law?

According to the provisions of Vietnamese legal system regarding Nationality and Settlement, a Vietnamese Citizen in their settlement in foreign country is not prohibited by law but must comply with the provisions related to Nationality and Settlement.

Pursuant to clause 3 article 3 Decree 138/2006/ND-CP, “Overseas Vietnamese” means Vietnamese nationals who are residing and working permanently in foreign countries. And clause 1 article 27 of Law on Vietnamese Nationality 2008, “A Vietnamese Citizen who files an application for renunciation of Vietnamese nationality to accquire a foreign nationality may be permitted to renounce Vietnamese nationality”

It could be understood that the foreign settlement would not make the Citizen Nationality invalid. If a Vietnamese Citizen settles down and wishes to natualize a foreign country in the place where that Citizen is in settlement, the Citizen shall proceed with the procedure for renunciation of Vietnamese nationality and naturalization of the country where that Citizen is in settlement.

In order to conduct foreign settlement, a dossier must include:

  • Passport
  • Residence visa
  • Invitation to the country document

Please keep in mind that the above dossier is a basic request, depend on the reality situation and the requirements of the consulate of the country where Vietnamese Citizen wants to make settlement, the components of documents may be specified or different.

2| Notes

Vietnamese Citizen settles in foreign must comply both Vietnamese law in accordance with the principle of Nationality and the regulations in the country where the Citizen settles.

Pursuant to article 4 of Law on Vietnamese Nationality 2008, Vietnamese government only recognize Vietnamese Citizen have only on nationality as Vietnamese nationality. The current law does not regulate that Vietnamese nationals with dual nationality are prohibited acts but only do not recognize, therefore, depend on the practical situation of the host country, citizen should consider whether retention dual nationality or not.

Vietnamese Citizen in foreign settlement do not directly lose their Vietnamese nationality. Vietnamese nationality will only be lost in the circumstance that Vietnamese Citizen conducts a procedure to relinquish Vietnamese Nationality (aggressive) or be deporived of Vietnamese nationality (passive). However, not all Vietnamese Citizen can carry out the procedure to relinquish Vietnamese nationality. The following cases are not allowed to carry out procedures for relinquishing Vietnamese nationality under clauses 2, 3 and 4 article 27 of Law on Vietnamese Nationality 2008:

“2. A person applying for renunciation of Vietnamese nationality may not renounce Vietnamese nationality if hhe/she falls into any of the following cases:

  • Owning tax debts to the State or having a property obligation toward an agency, organization or individual in Vietnam;
  • Being examined for penal liability;
  • Serving a Vietnamese court’s judgement enforcement;
  • Being kept in detention pending judgment enforcement;
  • Serving a decision on application of the administrative handling measure of confinement to an education establishment, a medical treatment establishment or a reformatory.

3. A person applying for renunciation of Vietnamese nationality may not renounce Vietnamese nationality if such renunciation is detrimental to Vietname’s national interests.

4. Cadres, civil servants and those who are serving in Vietnamese people’s armed forces may not renounce Vietnamese nationality.

In short, the Vietnamese Government does not prohibit foreign real estate ownership or foreign settlement. However, in each specific circumstances, the identification of options for fulfilling these need is relatively complicated as it relates to not only Vietnamese legal system but also the laws of country where Vietnamese Citizen intend to own the real estate or set settlement.

If you have any questions or require any additional information, please contact Apolat Legal – An International Law Firm in Viet Nam.

This article is for general information only and is not a substitute for legal advice.