Real estate business

Foreign individuals and organizations owning and carrying out real estate business in Vietnam (P1)

I. Foreigners and foreign organizations according to Vietnamese law:

Foreign individuals: According to the provisions of Clause 5, Article 3 of the Nationality Law, foreigners residing in Vietnam are defined as foreign nationals and stateless persons who permanently or temporarily reside in Vietnam. According to this regulation, foreign natural persons can be understood to comprise two groups: (1) Foreign nationals; (2) Stateless.

Foreign nationals are people who hold the nationality of another country other than Vietnamese nationality.

Stateless is a person who has neither Vietnamese nationality nor foreign nationality.

Foreign organizations: According to the provisions of the Companies Act, any organization established abroad under the law of another country. Organizations can be classified into two groups: economic organizations and other non-economic organizations.

Commercial organization with foreign capital: an organization whose members or shareholders are foreign investors.

The economic organizations covered by the investment law include: enterprises, cooperatives, unions of cooperatives and other organizations carrying out business investment activities.

II. Types of real estate that foreigners and foreign organizations are allowed to own and use in Vietnam:

Vietnamese law has separate regulations for each type of real estate that individuals and organizations have the right to use, own and do business in Vietnam in general and foreigners, foreign organizations in particular.

What is real estate: Real estate is one of the categories of property according to Vietnamese law. According to the provisions of article 107 of the civil code, real estate includes 04 groups: (1) Land; (2) houses and construction works attached to the land; (3) Other property attached to land, houses and buildings; (4) Other property prescribed by law.

1. Land: Article 53 of the Constitution stipulates that the land is a public good, property of all, represented and uniformly managed by the State. The Land Act 2003 provides more specific provisions on the property rights of all persons as follows: Land belongs to the people as a whole, with the state acting as the owner’s representative and uniformly managing the land. The State grants land use rights to land users in accordance with this Law.

Therefore, it is asserted that according to the provisions of Vietnamese law, land does not belong to the private property of individuals, organizations (i.e. individuals and organizations are prohibited from owning land) but belongs to all the people, and is represented and uniformly managed by the State. The state grants land use rights to land users for use in accordance with the provisions of the land law. The state grants land use rights to individuals and organizations using land through land allocation or leasing decisions.

In accordance with the regulations, foreigners and foreign organizations have the right to access land for use and business purposes for appropriate purposes, as prescribed by the following forms:

  • Lease of land from the State and payment of ground rent;
  • Receive land allocation and pay land use tax (for housing project);
  • Lease or sublease of land from organizations or individuals;
  • Receive the transfer of projects associated with land use rights.

2. Houses and construction works attached to the land

2.1 Housing: any building in which households or individuals live

According to Article 159 of the Housing Law, foreign organizations and foreigners eligible for property in Vietnam include:

  • Foreign entities investing in project-based housing construction in Vietnam in accordance with this law and related regulations;
  • Foreign-invested enterprises, branches, representative offices of foreign enterprises, foreign-invested funds and branches of foreign banks operating in Vietnam (hereinafter referred to as “foreign organization”);
  • Foreigners allowed to enter Vietnam;
  • Therefore, foreigners and foreign organizations in the above cases have the right to own houses in Vietnam.

2.2 Constructions other than terraced houses: if a foreigner or a foreign organization has legitimate land use rights, the construction is legally built and established on the land, the ownership must be recognized by the state. Foreigners or foreign organizations have ownership rights to this legal construction.

3. Other property attached to land, houses, buildings and other properties prescribed by law: other properties attached to legally constructed and established houses and constructions belong to foreigners and foreign organizations.

See part 2: Foreign individuals and organizations owning and carrying out real estate activities in Vietnam (P2)

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