Vietnam is one of the world’s fastest growing economies and one of the top investment destinations. For years, its real estate has been one of the most attractive sectors to foreign investors, second only to the manufacturing sector.

The country has an abundant workforce, more than 50% of its 100-million population is under age 35, and a rising middle income class. Rapid urbanization has been recorded in the past 10 years, from 31% in 2011 to 41% in 2022. By 2030, about 50% of the country’s population will live in urban areas and this number will increase to nearly 65% by 2069.

The government is investing heavily in infrastructure development (highways, hospitals, airports, seaports, etc.) to fuel up the national growth. Not to mention the political stability, preferential policies such as land incentives, exemption, and reduction of corporate income tax rates, etc. are in place to encourage companies investing and doing businesses in Vietnam.

Opportunities arise in every real estate sector in Vietnam in the mid to long term. For the time to come, greatest potential lies in the industrial, logistics, and office segments, followed by residential, retail, and hospitality assets.

Investors should be aware of the asset ownerships in Vietnam, which are protected by laws and regulations in-effect, ie. Land Law, Law on Housing, Law on Real Estate Business, etc. Generally, foreign invested enterprises (FIEs) are allowed to purchase properties for their employees’ residences, and they cannot lease out such properties or use them as offices or for other purposes. FIEs can also engage in the real estate business in Vietnam and setting up a company to engage in the real estate business requires that the application dossier receive in-principal approval from either the People’s Committee of the province where the project is located, the Prime Minister, or even the National Assembly.

For individual foreign investors, home ownership is permitted for up to 50 years (and possible extension of the same duration) if the person has a valid entry visa in Vietnam. However, there are some restrictions on the aggregate number of houses that foreigners (including an organization and individual) can own in a commercial residential project or apartment building or in a geographical area. The number of apartments or condos is limited to 30% of the total number of apartments or condos in one apartment building. The number of separate houses is limited to 250 villas or townhouses in an area having a population size equivalent to the administrative level of a ward.

In addition, foreigners are not permitted to own houses or apartments located in national defense and security areas as prescribed by the Ministry of Defense and the Ministry of Public Security. For the commercial assets such as offices and industrial facilities, foreign investors may be confronted with the possibility of extension in land use rights, overlapping and confusing administrative procedures, etc. Though there have been many on-going discussions on the amendment of the Land Law, Law on Housing, etc. in the country, changes are not in the near sight. Hence, it is advisable for foreign investors to have a local partner for proper consultancy when looking into the Vietnam real estate.

For more details of the real estate market in Vietnam, please drop me an email. Or if you are in Ho Chi Minh city, let’s have a chat over coffee!