Unlike other Asia properties, investing in Vietnam property is a little bit more complicated for foreigners. But with the booming Vietnam property market, this shouldn’t stop you from investing in real estate there. You just need to take note of a few things before you plan for an overseas property investment.
City view of Saigon, Vietnam
Strict Limitations for Foreign Purchase
Technically, foreigners are not allowed to own land. Not even its citizens can. Unlike other Asia properties, the farthest a foreigner can own a Vietnam property is limited to the ownership of dwelling houses. You are allowed to purchase dwelling houses but cannot own the land in which it is built. However, the state gives you the option to lease the land from them if desired.
If you’re both a foreigner and a local resident, you are allowed to own dwelling houses. However, you are still not allowed to sublease the Vietnam property you own.
50 Year Lease
Despite the strict limitations, there are still ways to purchase from the local property market. Chesterton, the leading real estate agent in Vietnam is offering a unique 50 year lease scheme, which is almost already like a sale. A foreigner can acquire the right to the property for 50 years, and the right to renew the lease at the term’s expiry without any additional payment. Within those 50 years, there might be a chance that ownership of a Vietnam property by foreigners will be legal. Once that happens, the owner will transfer the property title to the buyer. Thus, this is a good opportunity to invest in a property in Vietnam even with the strict limitations given by the government,
But it doesn’t just stop there. What can give you good returns in your foreign property investment is the fact that the contract is only a lease. This means that you, the foreigner, can sub-let your property anytime. Although it might be quite an unusual leasing contract, it gives the buyer investing in real estate many of the rights of ownership.
Alternatively, you can also invest in a Vietnam property by forming a joint venture company with a local partner, or by forming a Built, Operate and Transfer (BOT) company.
Gold as Currency
Unlike other Asia properties, what makes Vietnam property unique is the currency it uses for real estate transactions. The currency they use is pure gold. One tael (1.25 ounces) of gold is equivalent to more than US$500. Thus, if you’re planning an overseas property investment in Vietnam, you need to be aware of this conversion rate at all times because transactions are not done in the country’s local currency.
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