• Vietnam Property Guide

Investing in Vietnam Real Estate: A Guide to Foreigners

1. Why invest in Vietnam?

Vietnam has made rapid progress in the past few decades thank to its competitiveness in its industrial and manufacturing sectors. The country remains one of Asia’s most promising markets as it has been more open for foreign investments since 2015, and investing in real estate is among the best roads to benefit from the country’s rising GDP, growing population, and large – scale infrastructure improvements. More importantly, the nation’s success in controlling Covid-19 has made Vietnam a safe haven to protect investors’ portfolios and increase their profitability.

A view of Ho Chi Minh city

2. Key changes in the new Housing Law - July 2015

  • Foreign individuals who are permitted to enter Vietnam have the right to buy and own apartments and houses in Vietnam. (Before July 2015, only those who are WORKING in Vietnam for at least ONE year and meet other criteria can buy properties in Vietnam).

  • A foreign ownership quota of 30% for commercial (branded) condominiums, and a foreign ownership quota of 10% of total landed projects (villas and houses) or 250 landed property units in one administrative ward are applied.

  • The duration of the property ownership is 50 years and can be extended, subject to the authority's approval.

  • The foreign owner reserve the right to occupy, sell, rent out, donate, transfer the property and use the property as a mortgage.

3. Payment for property purchase

Payment Methods

It is recommended that foreign investors should open a local bank account to transfer payments for their property to the Developer’s bank account.

Payment Schemes

Generally, for projects under construction, the payment scheme is decided by developers and agreed before the transaction. The maximum collection before handover is limited to be up to 70% (of the purchase price) for local Vietnamese developers, and up to 50% (of the purchase price) for foreign developers by the Housing Law. The law also stipulates that the final 5% of the purchase price is only collected upon issuance of the pink book.

A default interest shall be stated and agreed in the SPA (commonly the default interest rate is at 1.5% per month of the late amount). If this violation exceeds the time given in the SPA, the developer reserve the right to unilaterally terminate the SPA and forfeit an amount. At a common practice, the forfeiture amount is roughly 20% to 30% of the apartment selling price.

4. Handover process

Upon completion of the project, the developer shall inform the buyers the date of handover for the units and the outstanding amount to be paid before taking over the unit through a Handover Notice.

On the handover date, the buyer take over the units by examining carefully and signing the Minutes of Handover. The applications for a pink book, electricity, water, and telephone contracts with suppliers can also be handled at the handover date.

5. Yield from property investment in Vietnam

Interestingly, different cities and areas in Vietnam might have different appeal, thus different rental yield.

For example, a list of projects and estimated gross rental yields can be found below. The estimations are provided by one of the biggest franchised real estate companies in the world:

  • Metro Star (District 9 - HCMC): 6% – 8%

  • Sunshine City Saigon (District 7 - HCMC): 5%

  • The Marq (District 1 - HCMC): 4%

  • The Grand Manhattan (District 1 - HCMC): 4%

  • Malibu MGM (Hoi An): 16% guaranteed the first 2 years

  • TMS Luxury Condotel (Danang): 10% guaranteed for 10 years

  • Wyndham Soleil Da Nang Condos (Danang): 9% guaranteed (unknown for how many years)

Gross rental yield in Ha Noi are estimated around 4 to 8%.

6. Investor tax and expense list

The taxes and expenses incurred during property transaction in Vietnam are as follow:

Collected and composed by Vietnampropertyguides

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