Vietnam: A promising destination for real estate investment
© David Bokuchava / Shutterstock.com

Vietnam: A promising destination for real estate investment

Did you know? Real estate prices in Vietnam have surged by over 150% in the past decade, with prime areas like Ho Chi Minh City and Hanoi witnessing gains exceeding 200%. In 2024 alone, residential property prices in Ho Chi Minh City jumped 22% year-on-year, outpacing many regional markets. This remarkable growth, fueled by a booming economy, expanding middle class, and rising foreign investment, positions Vietnam as a prime destination for global real estate investors.

In this article, we explore the opportunities and legal landscape of real estate investment in Vietnam and how Ecovis Vietnam can support investors in navigating this dynamic market.

Legal Framework for Foreign Real Estate Investment

Vietnam allows foreign individuals and foreign-invested enterprises (FIEs) to participate in the real estate
market under defined conditions. The key laws governing these transactions include:

  • Law on Housing 2023: Governs residential property ownership.
  • Law on Real Estate Business 2023: Regulates real estate business activities.
  • Land Law 2024: Defines land-use rights and ownership regulations.
Real Estate Ownership by Foreign IndividualsReal Estate Investment by Foreign-Invested Enterprises (FIEs)
Types of Properties Foreign Individuals Can Own:

  • Apartments & Condominiums: Own up to 30% of units in a building.
  • Landed Property (Villas & Townhouses): Own up to 10% of units in a commercial housing project (or 250 houses per ward).
  • Leasehold Land Use Rights (LURs): Lease land for up to 50 years, renewable upon approval.
Permitted Real Estate Activities for FIEs:

  • Commercial Land Leasing: Up to 50 years, renewable to 70 years in special cases.
  • Property Development: Develop residential, commercial, and industrial projects.
  • Leasing & Subleasing: Lease office spaces or apartments and sublease to tenants.
  • Industrial & Logistics Real Estate: Lease land in Industrial Parks (IPs), Export Processing Zones (EPZs), and High-Tech Parks (HTPs) for factories, warehouses, and logistics hubs.
Ownership Restrictions for Foreign Individuals:

  • No ownership in national security-sensitive zones (e.g., border areas).
  • No property flipping or resale for commercial gain without proper licenses.
  • Must purchase from licensed developers or other foreign owners.
Restrictions for FIEs:

  • No direct land purchases from private Vietnamese individuals (must lease from the state or through approved projects).
  • Limited access to residential property, except for staff housing or company use.
  • • Investment approval is required for large-scale projects.

Step-by-Step Guide to Purchasing Real Estate in Vietnam

StepFor Foreign IndividualsFor Foreign-Invested Enterprises (FIEs)
1Legal Due Diligence: Verify ownership and legal status of the propertyObtain an Investment Registration Certificate (IRC) and Enterprise Registration Certificate (ERC)
2Sign & Notarize the Sale and Purchase Agreement (SPA): Notarization is required for legal validitySign a Land Lease Agreement with the state or approved developers
3Register Ownership: Obtain the Land Use Rights Certificate (LURC) (commonly known as the “Red Book” or “Pink Book”)Secure necessary Construction & Business Licenses
4Payment & Taxation: Use a Vietnamese bank account for transactions, ensuring compliance with foreign exchange regulationsRegister Leasehold Rights with local land authorities
5Ensure compliance with corporate tax obligations, including VAT and land rental fees

Taxes & Fees for Foreign Real Estate Investors

For Foreign IndividualsFor Foreign-Invested Enterprises (FIEs)
  • Value-Added Tax (VAT): 10% (on newly built properties).
  • Registration Fee: 0.5% of the property value.
  • Personal Income Tax (PIT) on Resale: 2% on the gross sale price.
  • Corporate Income Tax (CIT): 20% on net profit from real estate business activities.
  • VAT: 10% on sales and rental income.
  • Land Use Fees & Rental: Payable annually or as a lump sum, depending on the lease agreement.

How Ecovis Vietnam Supports Your Investment Journey

Navigating Vietnam’s real estate market requires expert legal support to ensure compliance and maximize returns. At Ecovis Vietnam, we provide comprehensive services, including:

  • Legal Due Diligence: Ensuring property legitimacy and regulatory compliance.
  • Investment Licensing: Handling IRC, ERC, and land use rights registrations.
  • Contract Review & Negotiations: Drafting and reviewing contracts for your protection.
  • Tax & Regulatory Compliance: Managing CIT, VAT, and land rental fees obligations.

Contact Ecovis Vietnam today for expert legal guidance and seamless transactions.

Contact us:

Vu Manh Quynh
ECOVIS Vietnam Law
Unit SAV1.02.11, Tower 1, The Sun Avenue,
28 Mai Chi Tho Street, Thu Duc City
71100 Ho Chi Minh City
Phone: +84 898 120 121
www.ecovis.com/vietnam/law

Real estate law