Foreigners Property Ownership Rights: Latest Legislation in Vietnam

1. Foreign Organizations and Individuals Permitted to Own Real Estate in Vietnam

a) Foreign organizations and individuals are permitted to own residential properties within housing construction investment projects as stipulated in Article 17 of this Law, excluding projects located in areas requiring national defense and security assurance according to the regulations of Vietnamese law.

b) The Ministry of National Defense and the Ministry of Public Security are responsible for notifying the areas requiring national defense and security assurance to the People's Committees at the provincial level for identification and public announcement on the electronic information portal of the People's Committees at the provincial level and the housing management agencies at the provincial level to establish a list of housing construction investment projects on the territory, allowing foreign organizations and individuals to own residential properties.

2. Foreign organizations and individuals are entitled to own residential properties and possess forms of property ownership in Vietnam.

2.1. Foreign organizations and individuals' entitlement to own residential properties in Vietnam encompasses:

a) Economic organizations with foreign investment capital are allowed to invest in residential construction projects in Vietnam according to the provisions of this law and other relevant legal regulations.

b) Economic organizations with foreign investment capital, branches, representative offices of foreign enterprises, foreign investment funds, and branches of foreign banks operating in Vietnam (from now on collectively referred to as foreign organizations);

c) Foreign individuals are permitted to enter Vietnam.

2.2 Forms of Property Ownership for Foreign Organizations and Individuals in Vietnam

Foreign organizations and individuals stipulated in paragraph 1 of this Article may own residential properties in Vietnam, including both condominiums and standalone houses, through the following forms:

a) Organizations specified in point a of paragraph 1 of this Article may own residential properties by implementing residential construction investment projects in Vietnam;

b) Organizations and individuals specified in points b and c of paragraph 1 of this Article may own residential properties through the purchase, lease-purchase, or inheritance of commercial houses from the project investor of residential construction investment projects, receiving gifts, inheriting commercial houses within residential construction investment projects not located in areas requiring national defense and security assurance as stipulated in Article 16 of this Law;

c) Organizations and individuals specified in points b and c of paragraph 1 of this Article may own residential properties through the purchase or lease-purchase of houses from foreign organizations and individuals who already own residential properties as regulated in point b.

3. Conditions for Foreign Organizations and Individuals to Own Residential Properties in Vietnam

a) For economic organizations with foreign investment capital specified in point a of paragraph 1 of Article 17 of this Law, they must be the investors in residential construction investment projects according to the provisions of this Law and real estate business laws.

b) For foreign organizations specified in point b of paragraph 1 of Article 17 of this Law, they must possess an Investment Certificate or an Investment Registration Certificate or relevant documents regarding their permission to operate or establish in Vietnam valid at the time of signing the transaction regarding residential properties (starting now collectively referred to as the Investment Certificate) issued by the competent state authority of Vietnam by the regulations of the law.

c) For foreign individuals specified in point c of paragraph 1 of Article 17 of this Law, they must not fall under cases eligible for diplomatic or consular privileges and immunities as prescribed by law.

4. Number of houses that foreign organizations and individuals can own in Vietnam

a) Foreign organizations and individuals as specified in points b and c of paragraph 1 of Article 17 of this Law are only permitted to purchase, lease-purchase, receive as gifts, inherit, and own up to 30% of the total number of apartments in a condominium building. For standalone residential properties, including villas and townhouses, within an area equivalent to the population scale of one ward, they are allowed to purchase, lease-purchase, receive as gifts, inherit, and own up to 250 houses.

b) In areas with a population equivalent to one ward that have multiple condominium buildings or standalone residential properties along a street, foreign organizations, and individuals are allowed to purchase, lease-purchase, receive as gifts, inherit, and own up to the number of apartments, the number of standalone houses specified in paragraph 1 of this Article.

c) The Government shall stipulate requirements regarding areas requiring national defense and security assurance, criteria for converting population scales equivalent to one ward, the number of residential properties that foreign organizations and individuals are permitted to own, extensions of ownership tenure, and the management and ownership of residential properties by foreign organizations and individuals in Vietnam.

5. Rights of Residential Property Owners who are Foreign Organizations and Individual

5.1. Economic organizations with foreign investment capital specified in point a of paragraph 1 of Article 17 of this Law shall exercise the rights of residential property owners as stipulated in Article 10 of this Law; in the case of constructing residential properties on leased land, they shall only have the right to lease out the residential properties.

5.2. Foreign organizations and individuals specified in points b and c of paragraph 1 of Article 17 of this Law shall have the rights of property owners for residential properties similar to Vietnamese citizens, but must comply with the following provisions:

a) They are only permitted to purchase, lease-purchase, receive as gifts, inherit, and own residential properties up to the prescribed quantity specified in Article 19 of this Law and shall be issued a Certificate for such residential property;

b) If foreign organizations and individuals receive as gifts or inherit residential properties not falling under the cases specified in point b of paragraph 2 of Article 17 of this Law,or exceeding the number of residential properties prescribed in Article 19 of this Law, or located in areas requiring national defense and security assurance as specified in Article 16 of this Law, they shall only enjoy the value of the residential properties;

c) Foreign individuals may own residential properties through agreements in buying, lease-purchasing, receiving as gifts, or inheriting residential properties for a maximum duration of 50 years, counted from the date of issuance of the Certificate, and may be extended once for a duration not exceeding 50 years if necessary; the ownership tenure must be clearly stated in the Certificate.

In the case of a foreign individual marrying a Vietnamese citizen residing in Vietnam, they shall own residential properties and have the rights of property owners as Vietnamese citizens.

In the case of a foreign individual marrying a Vietnamese expatriate permitted to enter Vietnam, they shall own residential properties and have the rights of property owners as Vietnamese expatriates;

d) Foreign organizations may own residential properties through agreements in buying, lease-purchasing, receiving as gifts, or inheriting residential properties for a duration not exceeding the period stated in the investment certificate issued to that organization, including any extensions; the ownership tenure shall be calculated from the date the organization is issued the Certificate and shall be clearly stated in the Certificate;

e) Before the expiration of the ownership tenure as stipulated in this Law, the property owner may directly or authorize another organization or individual to gift or sell the residential property to a person eligible to own residential property in Vietnam; if the residential property is not gifted or sold before the ownership tenure expires, it shall become state property.

In the case where the recipient or buyer of the residential property is the subject specified in points a and b of paragraph 1 of Article 8 of this Law, they shall have rights as specified in paragraph 1 of Article 10 of this Law.

6. Obligations of Residential Property Owners who are Foreign Organizations and Individuals

6.1. Economic organizations with foreign investment capital specified in point a of paragraph 1 of Article 17 of this Law shall have obligations of residential property owners as stipulated in Article 11 of this Law.

6.2. Foreign organizations and individuals specified in points b and c of paragraph 1 of Article 17 of this Law shall have obligations as residential property owners similar to those of Vietnamese citizens, but must comply with the following provisions:

a) Foreign individuals as property owners, are allowed to lease out residential properties for purposes not prohibited by law. However, before leasing out residential properties, the property owner must submit a notification of the lease to the district-level housing management authority according to the regulations of the Minister of Construction and must pay taxes on rental income according to the law.

In the case of a foreign individual marrying a Vietnamese citizen residing in Vietnam, they shall have obligations as residential property owners as Vietnamese citizens.

In the case of a foreign individual marrying a Vietnamese expatriate permitted to enter Vietnam, they shall have obligations of residential property owners as Vietnamese expatriates;

b) For property owners who are foreign organizations, residential properties may only be used to accommodate individuals employed by that organization;

c) Conducting payment for purchasing or lease-purchasing residential properties through credit institutions, branches of foreign banks operating in Vietnam;

d) If a foreign individual is subject to deportation or expulsion by the competent authorities of Vietnam or a foreign organization is compelled to terminate its operations in Vietnam due to a violation of Vietnamese laws in the use of its residential property, the residential property shall be handled according to the decision of the competent authorities of Vietnam.

7. Cases where Foreign Organizations and Individuals are not Granted Certificates for Residential Properties

7.1. Foreign organizations and individuals falling under the following cases shall not be granted Certificates for residential properties but may only sell or gift these properties to individuals eligible to own residential properties in Vietnam:

a) Foreign organizations and individuals receiving as gifts or inheriting residential properties not falling under the cases specified in point b of paragraph 2 of Article 17 of this Law, or exceeding the quantity of residential properties permitted to own according to the regulations of Article 19 of this Law, or located in areas requiring national defense and security assurance as specified in Article 16 of this Law;

b) Foreign organizations not operating in Vietnam, foreign individuals not permitted to enter Vietnam but receiving as gifts or inheriting residential properties in Vietnam.

7.2 The subjects specified in point a of paragraph 1 of this Article may directly or authorize another organization or individual to sell or gift the residential property; the subjects specified in point b of paragraph 1 of this Article may authorize another organization or individual residing and operating in Vietnam to sell or gift the residential property.

7.3 The inheritor of the residential property, which includes both organizations and individuals, falls into the category of those eligible and ineligible to own residential properties in Vietnam, then the parties must agree on how to handle the inherited property in one of the following ways:

a) To allow organizations or individuals eligible to own residential properties in Vietnam to inherit the property; organizations or individuals not eligible to own residential properties in Vietnam shall enjoy the value of the property corresponding to the inherited portion of the estate;

b) To gift or sell the property to organizations or individuals eligible to own residential properties in Vietnam to enjoy its value.

The Housing Law has been amended to be transparent, strict, and consistent with regulations and practices to create favorable conditions to attract and promote investment development, and "retain" a large number of foreign personnel, Highly qualified experts come to Vietnam to work. At the same time, it also increases the strictness of the law to avoid speculation.