Foreign Ownership Restrictions in Vietnam's Real Estate Sector
Foreign lawyer admitted in Japan and Vietnam
Kazuya Mori, Senior Advisor to the firm (Japanese law)
NEXORA Law Firm — Managing Attorney
Attorney admitted in Vietnam
Mediator, Bankruptcy Trustee, Outside Statutory Auditor
Table of Contents
01 - Overview
02 - Key Foreign Ownership Restrictions in the Real Estate Sector
This article organizes the current state of foreign ownership restrictions in Vietnam's real estate sector by investment type (indirect vs. direct investment) and by development purpose (residential, industrial parks, commercial facilities, etc.). A Vietnamese attorney explains the legal basis for these restrictions and the latest practical trends in clear, accessible terms. NEXORA Law Firm has extensive experience supporting foreign investors across a wide range of real estate matters — development, leasing, sale and purchase, and project M&A — and can provide end-to-end assistance, from obtaining licenses and structuring contracts to negotiating with the authorities. Our team, well versed in real estate practice, provides strong support for your market entry.
01 - Overview
The real estate business was not addressed in Vietnam's WTO accession commitments, but domestic legislation (the Law on Real Estate Business, the Law on Housing, etc.) opens the sector to foreign investors as follows.
Even a wholly foreign-owned enterprise may conduct a real estate business in Vietnam. However, because real estate is a conditional investment sector, the following conditions and restrictions apply.
*Real estate business includes real estate development, leasing and sale of real estate, and real estate brokerage, among others.
Foreign individuals and foreign-invested enterprises may own real estate (i.e., hold land use rights over it) in Vietnam provided the applicable conditions are satisfied.
02 - Key Foreign Ownership Restrictions in the Real Estate Sector
2‐1
Conditions for Acquiring Land Use Rights
Foreign-invested enterprises cannot readily acquire land use rights in Vietnam; they may generally only do so through a construction investment project — such as residential construction, offices, or shopping malls — i.e., what is commonly referred to as a real estate development investment project.
2‐2
Conditions for Housing Ownership
Eligible housing: The housing must consist of condominium units and/or individual houses built under a commercial housing construction project, and it must be located outside areas designated for national defense and security purposes.
Quantity limits: Foreign investors may not own more than 30% of the total units in any given condominium building, nor more than 10% of the total individual houses in any given project (with an overall project-wide cap of 250 units for townhouses, individual houses, and villas taken together).
Ownership term: A maximum of 50 years, which may be extended upon expiry.
2‐3
Conditions for Conducting a Real Estate Business
As a precondition, engaging in a real estate business requires establishing a locally incorporated entity in Vietnam. There is no minimum charter capital requirement.
Type of real estate involved
Permitted scope of business
a. Housing, buildings
· Leasing for the purpose of sub-leasing
b. Land allocated by the State
· Investment in residential construction for sale, lease, or hire-purchase (lease with an option to purchase)
c. Land leased from the State
· Investment in residential construction for lease
· Investment in building construction for sale, lease, or hire-purchase
d. Land leased within industrial parks, industrial clusters, export-processing zones, or hi-tech parks
· Investment in building construction for a business consistent with the designated land-use purpose
Other permitted activities
e. Receiving a transfer of all or part of another investor's real estate project, for the purpose of investing in the construction of housing or buildings for sale, lease, or hire-purchase
2‐4
Conditions for Providing Real Estate Services
① As a precondition, a locally incorporated entity must be established.
② An organization or individual operating a real estate brokerage service must employ at least two persons holding a real estate brokerage practice certificate.
③ An enterprise operating a real estate exchange must likewise employ at least two persons holding a real estate brokerage practice certificate, and the manager/operator of the real estate exchange must hold a real estate trading practice certificate.