A Guide for Foreign Investors in Ho Chi Minh City

The rapid developments in one of the biggest cities in Vietnam has attracted a lot of foreign investors and opened new project launches in Ho Cho Minh City. With all the scramble to get the best real estate investment such as businesses and property for sale, where should you start as a foreign investor in Vietnam?

Here is an overview of real estate investment laws and requirements in Ho Chi Minh City.

Foreign Investors

In 2014, Vietnam revised its property laws and regulations to accommodate and encourage more foreign investment in the country. For example, if you are a foreigner who wants to buy a new property for sale in district 2, you should have the following requirements:

If you are a Vietnamese living overseas, you are required a passport stamped with mark from the immigration department and documents that validate your Vietnamese background.

For foreigners planning to invest in Vietnam properties, you are required to have a passport with a stamp from immigration department. Unless you own a business, buying of real estate apartments from new project launches in Saigon will no longer require work permit, residency documents, and other paperwork. However, you are restricted to own that property for only up to 50 years. If you wish to extend your ownership for another 50 years, you will have to apply for extension before your ownership ends. Any real estate foreign investor is subject to the same rights and laws that the local investors enjoy and follow.

Foreign organizations can own residential properties in Ho Chi Minh City, if it is used for residential purposes and the ownership is only covered in the period stated in the certificates. Organizations are not allowed to have their properties leased out. Remember also that a foreign investor or group cannot own more than 30% of the residential parties in a ward.

However, if the type of property you wish to buy in Vietnam is already sold out, try to inquire about vin homes resale at central park in Ho Cho Minh City for resold units. While the developer may have ran out of available condos, you may be able to find properties for sale from the resale market and buy it directly from the investor, instead. But before agreeing on the contract and releasing any amount of money, make sure to ask and research about the necessary requirements for the transfer of ownership.

Some of the taxes imposed in Vietnam are as follows: corporate income tax, value added tax, personal income tax, foreign contractor tax, special sales tax, import and export duties, natural resources tax, property tax, and environmental protection tax. Since there are no local or provincial taxes in Vietnam, you must remember that these are all national taxes that are carried out by local administrative offices.

Property tax is in the form of a land rental or land use fee. If you wish to own a real estate in district 4 or any other districts in Ho Chi Minh City, you should apply to the land management authority. The tax will vary on the location and type of infrastructure where the property is located. Since 2012, all those who own apartments and houses must pay a lang tax based on the square meter. These can be between .03% to .15%.

There are three forms of tax incentives in Vietnam that are given to companies, such as the exemption or reduction of land rent and levy; exemption or reduction of import tax on goods that are imported as fixed assets; and the lower rate of corporate income tax for a specific period or throughout the duration of a project. There are also incentives for those who wish to invest in projects and developments in disadvantaged regions, incentives for industries that are being prioritized to improve education, technology, and healthcare, as well as incentives for those who wish to invest in economic zones.


Taxation and Tax Incentives

Land for Foreign Investment

The law allows for ownership and the right to use land if the individual or party has an LUR certificate. In the revised 2014 Land Law, both local and foreign investors are given equal opportunities in Vietnam for housing projects, whether it is for residence or leasing or selling. Foreign investors can also pay either through short-term or long-term plans.

Foreign groups or enterprises, however, are not allowed to have LUR, but this can be acquired through leasing land from allowed lessors or if the party receives a capital contribution in the form of LUR from a Vietnamese party. This is common in joint venture companies that often have new project launches in the cities.

The same Land Law also covers provisions for the limit of the LUR lease contract, which is 50 years, the LUR transfer, and LUR mortgage. The lease terms are determined by the term of the project investment; however, this can be extended if permitted. Owners can also mortgage part or all of their assets and LUR at any approved credit institution in the country.