Doing Business

Step-by-step guide for foreign investors: Buying property in Vietnam

Trường Lăng

August 29, 2023

Doing Business

Step-by-step guide for foreign investors: Buying property in Vietnam

Trường Lăng

August 29, 2023

In an ever-evolving global real estate landscape, foreign investors are increasingly drawn to Vietnam as an alluring destination for property acquisitions. By providing up-to-date statistics, comprehensive analysis, and meticulous step-by-step instructions, this guide aims to arm foreign investors with the insights required to make well-informed decisions in Vietnam’s burgeoning real estate market.

Why should investors buy a property in Vietnam?

Principal among the reasons to consider investing in property in Vietnam is the relative affordability of real estate compared to other nations within the region and worldwide. According to Vietnam Credit, the average price per square meter of apartments in Hanoi and Ho Chi Minh City – Vietnam’s largest urban centers – was approximately $1,800 in 2023. This figure notably trails that of Bangkok ($2,600), Kuala Lumpur ($3,400), Singapore ($14,000), and Hong Kong ($28,000). Moreover, projections indicate that property prices in Vietnam are poised to grow by 6-8% annually over the next five years, promising a favorable return on investment for interested parties.

Furthermore, Vietnam presents a plethora of property types catering to various needs and preferences. Whether seeking residential properties for living or leasing, commercial spaces for business endeavors, or resort properties for investment or leisure, Vietnam has a selection to satisfy every investor. Among the most sought-after property types are below:

House ownership rights of foreigners in Vietnam

According to Article 7 of the 2014 Law on Housing in Vietnam, entities eligible for the ownership of Vietnam properties include: 

  • Vietnamese organizations, households, or individuals;
  • Overseas Vietnamese individuals;
  • Foreign organizations and individuals as regulated by the regulations.

In detail, Article 159, Clause 1 of the Law on Housing stipulates specific conditions whereby foreign organizations and individuals are provided the right to acquire property in Vietnam. Several qualifying scenarios include:

  • Foreign entities investing in project-based housing construction within Vietnam, as outlined in the Law on Housing, the Law on Real Estate Business, and corresponding regulations.
  • Foreign-invested enterprises, branches, representative offices of foreign enterprises, foreign-invested funds, and branches of foreign banks operating in Vietnam, provided they are registered to operate in the country.
  • Foreign individuals holding authorization to enter Vietnam, lacking diplomatic immunity and privileges as prescribed by law.

It can be seen that foreigners are not allowed to have their name on Certificate of land use rights, ownership of houses and other land-attached assets for foreigners. However, foreigners are allowed to have the name on the Certificate of land use rights, ownership of houses and other land-attached assets belonging to apartments and separate houses in housing construction for investment projects.

How to buy a property in Vietnam?

While the property acquisition process in Vietnam hinges on factors such as property type, acquisition method, and buyer nationality, common steps persist across scenarios: 

  • Step 1: Identifying a suitable property.

Foreign investors typically select apartments within commercial housing projects. Opting for reputable projects and investors mitigates risks, with a crucial review of eligibility for foreign sale per Vietnamese law. You can look for a property in Vietnam in top 3 trusted website below:

  • Step 2: Executing a house sales and purchase contract.

Upon selecting an appropriate apartment, investors can formalize their intent by entering a deposit contract, the value contingent on mutual agreement or project-specific terms. This deposit influences house valuation, contract timing, and pertinent conditions. Subsequent steps include formalizing the house purchase contract with the project’s investor, outlining the respective parties’ rights and obligations.

  • Step 3: Obtaining a Certificate of land use rights, ownership of houses and other land-attached assets

After Post-property receipt and tax obligation fulfillment, foreign investors will meet the conditions to be granted a Certificate as prescribed and proceed with procedures of obtaining Certificate of land use rights, ownership of houses and other land-attached assets, potentially facilitated by the project investor.

What needs to be mindful of when buying a property in Vietnam?

While acquiring property in Vietnam holds appeal, various legal parameters must be observed, in alignment with Decree 99/2015/ND-CP:Foreign organizations and individuals face legal restrictions on owning a property in Vietnam (Article 76 of Decree 99/2015/ND-CP). To be more specific, 

  • Foreign investors can own no more than 30% of apartments within a building and no more than 30% of the total number of apartments of all these apartment buildings
  • They can own no more than 250 individual houses within a project whose quantity of detached houses is equivalent to 2,500 houses. 
  • In case the quantity of detached houses of a project is fewer than 2,500, foreign entities may own up to 10% of the houses of such a project. 
  • If there are two or more projects where the total quantity of detached houses does not exceed 2,500 houses, foreign entities may own up to 10% of the houses of each project.

Foreign ownership extends to a maximum of 50 years.

  • Property ownership is subject to specific conditions when acquiring from housing project investors, foreign entities/individuals who own property, or when inheriting or receiving properties from Vietnamese individuals, households, or organizations. This effectively means that direct purchases from Vietnamese owners are not allowed.
  • Property acquisition is prohibited within areas designated for national defense and security.

To receive the Certificate of land use rights, ownership of houses and other land-attached assets, foreign investors must fulfill tax obligations and pay relevant fees, which include:

1Registration fee0.5% x property transfer price
2Fee for notarizing the contract To be determined based on the property transfer price
3Fees for appraisal of dossiers Based on the size of the land plot, the complexity of each type of application, the purpose of land use and the specific conditions of the locality.
4Fees for issuing for appraisal of dossiers for issuance of Certificate of land use rights, ownership of houses and other land-attached assets land use rights Based on specific local conditions and local socio-economic development policies
Tax obligations and Relevant fees in buying a house in Vietnam

Final thoughts

Purchasing property in Vietnam represents a strategic and potentially lucrative choice, contingent upon adherence to the steps and insights outlined in this guide. Should questions, concerns, or further assistance arise, Viettonkin Consulting stands ready to help. As a premier consultancy firm in Vietnam, we provide a comprehensive array of services, including market research, business registration, legal support, tax advisory, accounting, auditing, and more. Our seasoned experts possess extensive expertise in Vietnam’s real estate sector, poised to assist in property selection, purchase, and post-acquisition optimization. We are dedicated to delivering bespoke, high-quality solutions to our clients’ unique requirements. 

Contact us now for more information!

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