Legal issues with Vietnamese property

Compulsory conditions and documents

Currently, purchasing property in Vietnam for a foreigner can still be a tough task, despite the recent changes and evolutions in the real estate sector.

Before 2009, it was not possible for any foreigner wanting to move to Vietnam to legally acquire property. The only way for expats to reach this goal was to form a joint venture with a Vietnamese company.

Because of a new implementation, expats can now legally acquire property on their own, but with several conditions regarding their situation.
In order to be able to acquire a property legally, the buyer’s profile must match at least one of the following categories:

• The buyer must be a person investing in Vietnam. These expats are asked to provide an investment certificate that proves they are involved in economic activities in Vietnam. The expiration date of the certificate should be at least 12 months after acquiring the property. Or, they are to provide proof that they are a board member of management of a firm operating in Vietnam.
• The buyer must be a person awarded by Vietnamese government. These expatriates must provide a medal awarded from the Vietnamese government.
• The buyer must hold a diploma in a useful sector for the country. These expats have to provide proven qualifications.
• The buyer must be married to a Vietnamese individual. These expats must present their marriage certificate.

However, if you are willing to buy property on the behalf of a company, your situation must fit within one of the following described:

• The company was established in Vietnam, in order to invest in Vietnam on the Vietnamese market.
• A Vietnamese company shared with a foreign stakeholder.
• The company must be a company that does not have any link with real estate activity.

In addition to the documents requested above, there are several documents foreigners also have to provide. These include your personal ID card/passport and your permit to stay on Vietnamese land, which has to be valid for at least 12 months. Foreigners who do not have a Vietnamese Residence Permit, or holds one with a validity of less than 12 months, are not allowed to buy property on Vietnamese ground.

Legal basis of Vietnamese real estate

When acquiring a property, you have to remember that the freehold basis is not complete, as landowning is not a legal right in Vietnam. In other words, you will never have 100 percent ownership when buying a house in Vietnam. Landowning is prohibited by Vietnamese law for both foreigners and the local Vietnamese population or entities.

Buyers are only allowed to acquire the structure built on a property, but the land remains regulated by the Vietnamese state, as it is considered a national good. The land has to be leased to the government with the Land Use Right Certificate (LURC).

Foreigners are allowed to acquire a dwelling house for several years, and lease the land to the state. The longest lease contract you can obtain lasts only 50 years. However, the Vietnamese government may allow you to extend this deadline until 70 years, if you have a reliable and significant project.

Buying real estate in Vietnam, factually speaking, is clearly a transfer of lease contracts. It is important to note that a property can be resold only after a minimum of 12 months after having been contracted. Since 2014, foreigners have been able to rent out property to tenants.