It’s been nearly 6 years since the new Law on Residential Housing (LRH) made it possible for foreigners to buy property in Vietnam. Foreigners can now own property for up to 50 years, with an option to renew. Since then, the foreign investment in the property market (FDI) has become a major contributer to the rapid economic growth of the country.
In order to be eligible to buy property in Vietnam as a foreigner, certain requirements must be met:
- Allowed to Enter Vietnam (under any type of Visa)
- Valid Passport with entry stamp by the immigration authorities in Vietnam
- Having a local bank account
Types of Ownership:
Foreign buyers can purchase property in Vietnam under two types of contracts:
- Sales & Purchasing Agreement (SPA)
- Long Term Lease (LTL)
Understanding the Differences:
|Who gets what?||Buyers who fall within the housing quota (30% of total units) can receive SPA||Buyers who do not fall within the housing quota for foreign buyers (30% of total units) can only receive LTL|
|Does the Buyer gets a Certificate of Ownership?||Yes. The buyer will receive a certificate of ownership known as the “Pink Book”||No. The buyer will not receive a certificate of ownership|
|How long is it valid?||50 years (renewable) from the moment the pink book is issued||50 years (renewable) from when the developer’s business license is approved|
|Is the buyer eligible?||Buyer must show proof of entry to Vietnam||Buyer does not need to show proof of entry to vietnam|
|Can the buyer resell the property?||Yes. The buyer can resell the property via notary office.||Yes. The buyer can resell the property but it is dependent on developer. This transaction is also done via notarization office|
|Can the buyer resell to local?||Yes. Local buyers will get freehold||Yes. Local buyers will get freehold|
|Can the buyer lease out the property?||Yes. The buyer can lease out to tenants.||Yes. The buyer can lease out to tenants|
|Advantages||Can Acquire Pink Book||Easier purchasing process|
|Disadvantages||The law is not clear on how to transfer the ownership to another foreigner once the Pink Book has been issued||Is usually valid less than 50 years & can’t acquire Pink Book.|
From whom can foreigners buy from?
- Primary Market: Foreigners can buy the units directly from the developers under LTL or SPA ownerships.
- Secondary Market: Foreigners can only buy from a foreign individual and inherit the remaining ownership tenure for either LTL or SPA ownerships.
Why Invest in Vietnam?
Regardless of the type of ownership, foreigners should invest in Vietnam as it is one of the fastest growing economies in Asia that counts with a preferable demographics, growing tourism, rapid urbanization, high yields and competitive prices.