How to buy property in Vietnam?
#1 Set up a 100% foreign-owned company in Vietnam
The first option to buy property in Vietnam is to set up a fully foreign-owned company. With a foreign company, you can purchase apartments or houses in Vietnam for a limited term.
The process of company registration in Vietnam is generally the same for all foreign investment companies and takes approximately 4-6 weeks if you don’t need any additional licenses.
During this time you will first acquire an Investment Registration License from the Department of Planning and Investment (DPI). This certificate allows you to start doing business in Vietnam.
The second step of incorporation in Vietnam is to obtain a Business Registration Certificate. Note that once you have received a business registration certificate from the DPI, you have 90 days to make the initial capital contribution.
Depending on your business line, you may also need additional licenses. For example, if you plan to sublease your property, you need a separate license for engaging real estate business in Vietnam. This will add some additional time to the company registration.
Note that foreign individuals or companies cannot own more than 30% of apartments in one apartment building. They also cannot own more than 250 separate houses including villas and row houses in areas where the population is equivalent to a ward-administrative division.
Length of foreign company’s lease agreements
Foreign-owned companies can hold lease agreements in Vietnam until the end of the duration of their Investment License which is usually granted for ten years.
The Investment License is renewable. However, make sure you keep your company in compliance and report taxes in Vietnam in a timely manner to ensure that there will be no issues with the extension.
You can also sell your property to another buyer. However, it is important that you also include the clause of ownership extension in the sales contract.
#2 Form a joint venture in Vietnam
Another option to buy property in Vietnam is to form a joint venture with a Vietnamese shareholder.
Locally-owned companies and Vietnamese citizens can purchase:
· Buildings for sale, lease, or lease purchase
· Entire or part of real estate project to build buildings for sale, lease, or lease purchase
The term of the agreement for Vietnamese citizens is indefinite. Local companies, on the other hand, can hold ownership of the property until the termination of the company.
However, be sure not to use an unreliable nominee as it is one of the common mistakes foreign investors do when starting doing business in Vietnam.
#3 Buy a house or an apartment as an individual
Foreign nationals who are residents in Vietnam can also buy dwelling houses without forming a legal entity.
However, as an individual, you can only purchase a house or an apartment for your own use. That means that you cannot rent it to third parties.
The term of ownership will be set in a housing sale agreement, but not for longer than 50 years per term. Lease agreements are renewable and upon sale, we suggest you also agree with the seller that:
· Renewal of the agreement is for free and no additional rent will be collected for the next lease period
· Processing of renewal is for free
· If the law on foreign ownership changes, the transfer of ownership to you will not include extra charges
This type of an agreement is a common practice in Vietnam as it is the closest available arrangement to private ownership. Only keep in mind that when acquiring property this way, you can only use it for residential, not for subleasing purposes.
Source : Emerhub