One of the most promising markets in Vietnam that contribute to the growing economy is the property market. Investment in the property sector is taking place in the country from all over the world.
This article provides essential information about property purchase restrictions for foreigners and the legal rights of foreigners to purchase property in Vietnam.
Request to buy property in Vietnam
Vietnam’s property market is growing at a very fast pace. For example, only in Ho Chi Minh City, apartment sales reached 30,972 units in 2016 and the number peaked at 47,163 units in 2017, a significant increase of 52%. More detailed reasons Vietnam is the best country to buy a property which is detailed as follows:
Quick foreign direct investment
The continuous flow of foreign direct investment has fueled strong economic growth in Vietnam.
Data from Vietnam’s Ministry of Planning and Investment showed that in 2017, the first foreign direct investment reached the US $ 9.05 billion in the first seven months of the year. This amount increased by 5.8% year-on-year.
Unhealthy growing economy
Vietnam has a stable inflation index of 4% –5%, which creates favorable economic environment and growth opportunities for property investors. Between 2010 and 2016, the average annual growth rate per capita GDP in Vietnam was 8.4%, lagging behind other Southeast Asian countries such as India, Cambodia, and the Philippines.
Also, it is predicted that upper-income households in Vietnam will increase more than double in 2020, while middle-income households will increase by 52.8%.
By 2040, Vietnam will have a population of about 120 million people, an increase of 25 million compared to the current population of 95 million. Therefore, the increase of residents will increase the demand for housing and property in Vietnam.
Vietnam’s property prices are rising
The main demand for new and better housing is from wealthy households and foreign white-collar groups. They are considered the primary driving force in Vietnam’s wealth growth.
While housing prices have gone up, especially in Ho Chi Minh City, property in Vietnam is still very affordable compared to other ASEAN countries such as Singapore and Hong Kong.
Best place to buy property in Vietnam
Many regions in Vietnam provide foreigners a good position to purchase the property. However, depending on what is better for you in terms of geographical area, infrastructure, size, and weather, we recommend the following attractive cities for your property investment in Vietnam.
The city is Vietnam’s largest cultural and industrial center with the largest human development index. It is considered by PwC to be one of the fastest-growing cities in the world and a luxurious apartment can be purchased at an average price of $ 3,000 / mm.
Ho Chi Minh City
Being the largest city in Vietnam, Ho Chi Minh City has attracted the most people and locals as it is also the largest financial and economic center of the country. The rapid growth of the population requires the construction of more apartments. A CBRE figure showed that 60,000 apartment units were completed in 2018 and 66% of apartment buyers were investors.
Being a coastal region of Central Vietnam, Nha Trang’s economy grows considerably due to the tourism boom. With this, the demand for property has also increased.
The most popular properties for foreign investors in Da Nang are high-end resorts, hotels, and beach villas.
Can Foreigners get property in Vietnam?
Foreigners found it difficult to keep the property in Vietnam. Now with the Vietnamese law in 2015, the Vietnamese government’s efforts to attract more FDI on residential housing (LRH), has made buying a property in Vietnam so much easier for foreigners.
Currently, foreigners can buy as many property units as they want, as there is no limit on the total purchase of property units. However, some restrictions still apply.
Here are some important details that foreigners should pay attention to:
A foreign person may have a limited number of property units in an administrative ward.
A foreigner can only buy a maximum of 30% units and is not allowed to own more than 10% of the assets of a project.
Can foreigners allowed to buy land in Vietnam?
Unfortunately, foreigners are not allowed to buy land in Vietnam. But thanks to Vietnam’s Land Use Rights (LUR) (also known as Property Ownership Certificate), foreigners are allowed to use and control the leased land, with a lease term of 50-70. It is a year. Happens till then. Is allowed to do. The leasehold period is renewable.
Keep in mind that freehold ownership is not allowed for foreigners until a foreign national is married to a Vietnamese citizen. To clarify, even if you cannot own the land as a separate alien, you can still own the property built on the land.
How to get property in VIETNAM?
The best option is to set up a 100% foreign-owned company in Vietnam that allows you to buy property in the country. You can buy houses and apartments on behalf of your foreign company for a specified period.
Registering a foreign-owned company in Vietnam is easy and convenient, and will only take 4-6 weeks.
When your company enters into a lease agreement in Vietnam, it will be valid until the expiration of your investment license, which has a validity of 10 years. You can sell your company’s assets to someone else.
A joint venture company
Another option for purchasing a property in Vietnam is the establishment of a joint venture company with a Vietnamese citizen as a locally owned company.
Through this local company, you and your Vietnamese shareholders can participate in the purchase of homes, the purchase and leasing of buildings, and the buildings of the entire real estate project. Ownership of the property by this local joint venture company will cease only when the company decides to terminate.