The homeownership of foreigners in Vietnam

Currently, the fact that foreigners demand to own houses in Vietnam has become more and more popular due to changes in conditions and procedures in Law on Housing 2014. This demand has been impacted by the development of foreign investment and the need of using foreign businesses of the domestic enterprises. The following article will details the conditions and procedures for foreigner (who has foreign nationality) to buy houses in Vietnam.

Foreign entities eligible for the homeownership in Vietnam include:

• Foreign entities who invest in project-based housing construction in Vietnam as prescribed in this Law and corresponding regulations of law;
• Foreign-invested enterprises, branches, representative offices of foreign enterprises, foreign-invested funds and branches of foreign banks operating in Vietnam (hereinafter referred to as foreign organization);
• Foreign individuals who are allowed to enter Vietnam.

The foreign entities eligible for the homeownership in Vietnam if they:

• Invest in project-based housing construction in Vietnam;
• Buy, rent and purchase, receive, or inherit commercial housing including apartments and separate houses in the project for housing construction, except for areas under management relating to national defense and security as prescribed in regulations of the Government.

According to Law on Housing 2014, foreigners are only allowed to own commercial houses/apartments, and not allowed to own houses outside the project and can not be transferred land use rights.

Requirements pertaining foreigner eligible for the homeownership in Vietnam:

• For foreigner who is an investor in Vietnam: must have Investment Registration Certificate issued by the competent authority;
• For foreigner who is not an investor: are required to have a permission to enter Vietnam and he/she is not granted diplomatic immunity and privileges.

Procedures for foreigners to own a house in Vietnam:

Step 1. Foreigners examinate commercial apartment/house that fulfill the conditions in accordance with the law.

Step 2. Enter into a sale contract with a commercial housing project manager or a foreigner who is the owner of the house. Under the Civil Code 2015 and Housing Act 2014, thousing sale contract must include the following provisions:

• Information of the parties entering into the contract;
• The characteristics of a house/apartment are the subject of a purchase transaction: quantity; location, floor area, usable floor area, furniture; owner of the house/apartment;
• The value of the house, method and time of payment;
• Rights and obligations of contracting parties;
• The validity period of the contract;
• Penalty for breach of contract, compensation for delay payment;
• Other terms agreed by the parties but not contrary to the law.

If the contract is in English or any other languages, it must be translated into Vietnamese before submitted to the compenent authority.

On the form of payment, foreigners may choose to pay in one of the following forms:

• Transfer money from foreigner’s account in Vietnam to project owner’s account;
• Transfer money from account of the investor from abroad to project owner’s account;
• Transfer money in Vietnamese Dong to the account of the project owner. (except for cases where cash is not allowed in Decree No.101/2012/ND-CP, Circular No.46/2014/TT-NHNN).

Foreigners are not allowed to pay cash directly to the project owner. In addition, when paying directly in cash, foreigners will not be able to provide legally valid proof of payment.

Step 3. Apply for a certificate of housing ownership for foreigners:

Dossiers of application for house ownership certificates shall include:

• Application for housing ownership certificate (follow the form in Circular No.24/2014/TT-BTNMT);
• Valid documents of the seller’s house ownership;
• House sale contract which is translated and notarized;
• Copy of foreigner’s passport.

After completing the above steps, the foreign investor has legally become owner of the house.

However, foreign investors should note the some points:

• Foreigners are not allowed to own more than 30% of apartments in an apartment building.
• All the required documents of the foreigner should be translated into Vietnamese and notarized.
• Foreigners only have the right to rent and purchase, receive, inherit house/apartment when having the certificate of housing ownership.

For more information about requirements and procedures for foreigners to own a house in Vietnam, please contact Viet An Law Firm through email and hotline below.

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