Since 01 January 2009, the State of Vietnam began a pilot scheme in Hanoi and Ho Chi Minh City which allows each of foreigners to own one residential house in Vietnam as long as they satisfy certain conditions.
After the pilot period, the factual market situation for the foreigners purchasing and owning residential property in Vietnam shows positive signals in attracting the abundant capital investment and finance from abroad, nonetheless, the consideration and issuance of the certificate of land use right and ownership of house for the foreign individuals, organizations were still difficult. A legislative turning point from 01 July 2015, when the Law on Housing 2014 and the Law on Business of Real Estate 2014 will come into effect, allowing foreign individuals and organizations to own (commercial) residential houses in Vietnam, including apartments and individual houses in residential housing investment projects, except areas used for national defence and security as stipulated by the Vietnamese Government. This is a great leap forward for the Vietnamese Government to create favourable conditions to attract further and continuing foreign investment in Vietnam, as well as develop the real estate business industry of Vietnam.
- Conditions for foreign individuals/foreign organizations to own houses in Vietnam
Even though the ownership of residential properties by foreigners in Vietnam is now legally recognized, there are still some conditions which need to be firstly met:
- Foreign organizations and individuals investing in a residential house construction project in Vietnam must have an investment certificate of the project for building the residential houses;
- FIEs, branches, representative offices of foreign enterprises, foreign- invested funds and branches of foreign banks operating in Vietnam must have an investment certificate or permission to run a business in Vietnam issued by the competent authorities. Such organizations are permitted to own houses for the term as agreed in the residential house sale and purchase contract but without exceeding the time limit stated in the investment certificate of that organization, including any extension. The housing ownership period is calculated from the date of the house ownership certificate and must be clearly stated in this certificate; and
- Foreign individuals must: (i) have full civil capacity to enter into the transactions in housing as prescribed in the laws of Vietnam; and (ii) legally enter into Vietnam and not granted diplomatic immunity and privileges in accordance with the applicable laws). Foreign individuals are permitted to own houses for a term as agreed in the residential house sale and purchase contract but not exceeding 50 years from the date of issuance of the certificate of house ownership. This can be extended under the provisions of Vietnam laws if required.