Individuals and foreign organizations owning and doing real estate business in Vietnam (P1)

Individuals and foreign organizations owning and doing real estate business in Vietnam (P1)

I. Foreigners and foreign organizations according to Vietnamese law

Foreign individuals: According to the provisions of Clause 5, Article 3 of the Law on Nationality, Foreigner residing in Vietnam is defined as foreign nationals and stateless persons who permanently or temporarily reside in Vietnam. According to this regulation, it can be understood that foreign individuals are understood to include two groups: (1) Foreign nationals; (2) Stateless person.

Foreign nationals are persons who holds the nationality of another country other than the Vietnamese nationality.

Stateless person is a person who has neither Vietnamese nationality nor foreign nationality.

Foreign organizations: According to the provisions of the Law on Enterprise, any organization that is established overseas under another country’s law. Organizations can be classified into two groups: economic organizations and other non-economic organizations.

Foreign-invested business organization: an organization whose members or shareholders are foreign investors.

Economic organizations under the Law on Investment include: enterprises, cooperatives, unions of cooperatives and other organizations conducting business investment activities.

II. Types of immovable property that foreigners and foreign organizations are allowed to own and use in Vietnam

Vietnamese law has separate regulations for each type of immovable property that individuals and organizations are entitled to use, own and do business in Vietnam in general and foreigners, foreign organizations in particular.

What is immoveable property: Immovable property is one of the property categories under Vietnamese law. According to the provisions of Article 107 of the Civil Code, immovable property includes 04 groups: (1) Land; (2) houses and construction works attached to land; (3) Other properties attached to land, houses and constructions; (4) Other property as prescribed by law.

1. Land: Article 53 of the Constitution stipulates that land is a public property, owned by all the people, and represented and uniformly managed by the State. The Land Law 2003 provides more specific provisions on the rights of ownership of all the people of as follows: Land belongs to the entire people with the State acting as the owner’s representative and uniformly managing land. The State shall grant land use rights to land users in accordance with this Law.

Therefore, it is affirmed that according to the provisions of Vietnamese law, land does not belong to the private ownership of individuals, organizations (i.e. individuals and organizations do not have the right to own land) but belongs to all the people, and represented and uniformly managed by the State. The State grants land use rights to land users for use in accordance with the provisions of the Land Law. The State grants land use rights to individuals and organizations using land through decisions on land allocation or land lease.

According to regulations, foreigners and foreign organizations have the rights to land for use and business purposes with appropriate purposes as prescribed through forms as following:

  • Lease of land from the State and paying land rental;
  • Receive land allocation and pay land use levy (for housing project);
  • Land lease or sub-lease from organizations or individuals;
  • Receive transfer of projects associated with land use rights.

2. Houses and construction works attached to land

2.1 Housing: any building in which households or individuals live

According to Article 159 of the Law on Housing, foreign organizations and foreigners eligible for the homeownership in Vietnam include:

  • Foreign entities who invest in project-based housing construction in Vietnam as prescribed in this Law and corresponding regulations of law;
  • Foreign-invested enterprises, branches, representative offices of foreign enterprises, foreign-invested funds and branches of foreign banks operating in Vietnam (hereinafter referred to as foreign organization);
  • Foreign individuals who are allowed to enter Vietnam;
  • Therefore, foreigners and foreign organizations in the above cases are entitled to own houses in Vietnam.

2.2 Constructions other than land-attached houses: if a foreigner or foreign organization has lawful land use rights, the construction is legally built and established on the land then ownership shall be recognized by the State. Foreigners or foreign organizations have ownership rights to that legal construction.

3. Other land-attached assets, houses, constructions and Other properties as prescribed by law: other properties attached to houses and constructions legally built and established is owned by foreigners and foreign organizations.

See part 2: Individuals and foreign organizations owning and doing real estate business in Vietnam (P2)

Disclaimer: This article is for general information only and is not a substitute for legal advice. Apolat Legal is a Vietnamese law firm with experience and capacity to advise on matters related to Real Estate. Please click here to learn more about our services and contact our lawyers in Vietnam for advice via email info@apolatlegal.com.