Foreign ownership of houses and condominium in Vietnam is now possible

1. Foreign ownership of houses and condominium in Vietnam is now possible
Oliver Massmann
Vietnam - You are a foreigner and want to buy a House or Condominium ?
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Since 1st July 2015 two new laws are in place, the Law on Real Estate Business and the Law
on Residential Housing. Those laws allow foreigners to purchase Real Estate, Houses and
Condos. On 10 September 2015, the Decree implementing the Law on Real Estate Business
is adopted, shedding light on provisions of the related law. The guidance will start taking
effect from 01 November 2015. For other provisions that have not received any
implementation guidance yet, the Ministry of Construction instructed the authorities to follow
the new law and until the new implementation rules are available, the new law should be
implemented according to the old implementation guidelines as long as it does not breach the
new law. Details will be explained below.
1. The right to own property
The Law on Residential Housing provides that foreign individuals who are permitted to enter
the country are allowed to own property in Vietnam. They should also not belong to the
category who are entitled to preferential treatment rights, or diplomatic or consulate
immunities in accordance to law. The Government will issue a detailed guidance on how
foreign individuals could provide its eligibility to own property in Vietnam. This guidance is,
unfortunately, not in place yet.
Foreign investors and organizations are allowed to purchase real estate with an investment
purpose. The investor or organization will need an Investment Certificate (or Investment
Registration Certificate under the new Investment Law). From a general perspective,
domestic investors or foreign investors who already have existing projects in Vietnam can
easily meet easily this requirement. However, it could be problematic for investors who make
first time investment in Vietnam with the investment project being the transferred one.
In general, there are two different possibilities to become owner of property in Vietnam. The
first option is to make investment in construction projects of residential housing in Vietnam.
The second option is to purchase the house or condo after its completion of construction.
The Law on Residential Housing is granting even more rights to foreign individuals who are
married to a Vietnamese citizen, whereas they have the same rights as Vietnamese citizens
and have the opportunity to purchase property on a long-term basis.

2. 2. Restrictions
It must be noted that foreigners can only own houses for a duration of 50 years. The
Government puts an exemption in place and can decide itself after application if and for how
long it will extend the ownership duration.
Under Article 161.2(a) of the Law on Residential Housing, foreign individuals and foreign
invested enterprises are able to purchase multiple properties in a residential development
project including buildings and separate landed villas/townhouses. The maximum quantity
allowed to purchase is 30% of the total units in a building and 250 houses in a local area.
However, Article 68.4 of the fourth Draft Decree of the Law on Residential Housing limits
that foreign organizations/ individuals may only own maximum 10% of the total number of
individual housing in each residential housing project. This could be a restriction not in
compliance with the Law on Residential Housing.
Another restriction in the fourth Draft Decree of the Law on Residential Housing is also
introduced. While Article 159.2(b) of the Law on Residential Housing only prohibits foreign
individuals and organizations from buying houses in national defense and security area,
Article 67 of the fourth Draft Decree of the Law on Residential Housing does not allow them
to own residential houses in areas where foreigners are prohibited or restricted from residing
or traveling as stipulated under the Law on Residence and Travel.
The development of this regulation needs to be awaited.
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Please do not hesitate to contact Mr. Oliver Massmann under omassmann@duanemorris.com;
if you wish to take the opportunity and purchase property or if you have any questions on the
above. Oliver Massmann is the General Director of Duane Morris Vietnam LLC.