Rights of Foreign Individuals and Foreign Organisations to Real Estate in Vietnam

1. Land use rights (“LURs”)

As a matter of principle, land is under ownership by the entire people, with the State acting as the representative owner and exercising unified management, and the State grants LURs to land user[1]. Therefore, in Vietnam, organizations and individuals do not have the right to “own land,” and the State only recognizes the “land use rights” for entities that meet certain requirements. According to the provisions of the Land Law over various periods, foreign individuals and organizations (exclusive of foreign organizations with diplomatic functions as prescribed by the Land Law 2024[2]) are not recognized as “land users” who are entitled to land use rights. Thus, it can be affirmed that foreign individuals and organizations do not have the land use rights in Vietnam.

Currently, legal documents in the field of real estate do not specifically define “foreign individuals”. However, based on relevant provisions of the Law on Housing 2023 (“LOH 2023”) and the Law on Real Estate Business 2023 (“LOREB 2023”), foreign individuals can be understood as foreign individuals allowed to enter Vietnam[3], do not benefit from diplomatic, consular privileges and immunities as per the law[4] and currently reside legally in Vietnam[5].

We note that the Land Law 2024, LOREB 2023, and LOH 2023 do not specifically and uniformly define the term “foreign organization”. While the Land Law 2024 and LOREB 2023 do not have a definition of “foreign organization”, LOH 2023 regulates foreign organizations including organizations operating in Vietnam as follows[6]:

(i) Foreign-invested economic enterprises;

(ii) Branches, representative offices of foreign enterprises, foreign investment funds; and

(iii) Branches of foreign banks.

However, for the purpose of this article and for avoidance of misunderstanding, foreign organization herein means an organization established overseas under the laws of foreign country as stipulated in the Law on Enterprise 2020[7].

2.  Housing ownership rights

According to the LOH 2023, foreign organizations are not permitted to own houses in Vietnam. Meanwhile, foreign individuals being allowed to enter Vietnam is one of the subjects being allowed to own a house in Vietnam[8]. Therefore, this article only presents the contents of housing ownership rights in Vietnam for foreign individuals.

a. Forms of housing ownership of foreign individuals

Foreign individuals may own residential houses, including apartments and individual houses in Vietnam through the following forms[9]:

• Form 1: (i) purchasing, (ii) lease-purchasing commercial residential houses from the investor of the residential construction investment project, (iii) receiving gifts, (iv) inheriting residential houses in commercial projects of residential construction investment not in areas requiring national defense and security assurance;
• Form 2: (i) purchasing, (ii) lease-purchasing residential houses from foreign individuals having owned residential houses under Form 1.

Additionally, although they do not have land use rights, foreign individuals still have ownership rights over residential houses and will be issued a Certificate of ownership for their legally owned residential houses[10] when they have sufficient documentation regarding the housing transaction as prescribed by law.

In practice, foreign individuals only need a visa to enter Vietnam (regardless of visa type, including tourist visas), and a self-commitment statement not exempt from diplomatic immunity to own houses that are allowed to be sold to foreigners in Vietnam.[11]

Regarding the lawful residence period in Vietnam, a foreigner is considered to have lawful residence in Vietnam if he presents in Vietnam within the period specified on his visa or temporary/permanent residence card. As current law does not require a minimum residency period for foreign individuals being eligible to own houses, it can be understood that foreigners only need to prove their permission to enter Vietnam through a valid visa or residence card to meet the conditions for purchasing and owning houses in Vietnam.

b. Limitations on foreign individuals’ ownership of residential houses in Vietnam

Due to national defense and sovereignty concerns related to land ownership and residency, foreign individuals owning residential houses in Vietnam face limitations regarding the areas of residences, quantity, and ownership duration as follows:

• Regarding the areas where residential houses can be owned in Vietnam[12]: Foreign individuals are only permitted to own residential houses within residential construction investment projects that do not fall within areas requiring national defense and security assurance as stipulated by Vietnamese laws. The Ministry of National Defense and the Ministry of Public Security are responsible for notifying areas that need to ensure national defense and security so that the Provincial People’s Committee can identify and publicly announce on the website of the Provincial People’s Committee and the provincial housing management agency (Department of Construction) the list of housing construction investment projects in the area that allow foreign individuals to own houses. Therefore, foreign individuals should be highly vigilant before proceeding to enter into agreements with developers by checking the website of the People’s Committee and the local Department of Construction to confirm whether the intended residential project is included in this list. This helps save time and ensures initial legal security for foreign individuals.
• Regarding the quantity of residential houses owned: Foreign individuals are only allowed to purchase, lease-purchase, receive gift, inherit, and own up to a maximum of 30% of the total number of apartments in a condominium building. For detached houses including villas, semi-detached houses, they can purchase, lease-purchase, receive as donation, inherit, and own up maximum to 250 houses in an area equivalent to a ward in terms of population scale[13]. This limitation also applies in cases where an area with a population equivalent to a ward having multiple condominiums, or for individual houses on the same street.

In this context, the population equivalent to that of a ward is understood as 10,000 people according to the approved planning by the competent authorities[14]. Accordingly, when approving the planning, the provincial-level planning management authority will publish the population equivalent to a ward on its official electronic portal.

In addition, the housing law does not regulate the number of houses that each foreign individual can own[15]. Therefore, foreign individuals can own many apartments in an apartment building, many individual houses in an area with a population size equivalent to a ward, provided that foreign ownership limits in that area are met.

In case a foreign individual receives a gift or an inheritance that exceeds the prescribed limit, or is not eligible for ownership, located in a national defense and security area, the foreign individual is entitled to enjoy the value of the house[16].

Regarding the term of ownership: Foreign individuals are entitled to own houses as agreed in transactions of purchase, lease-purchase, donation, or inheritance, but not exceeding 50 years from the date of issuance of the Certificate of Land Use Rights and Ownership of Assets Attached to Land (“Certificate”), extendable once for up to another 50 years if necessary. The term of ownership must be clearly stated in the Certificate[17]. Thus, the total term of housing ownership in Vietnam for foreign individuals is no more than 100 years.

In addition, foreign individuals should be aware that upon expiration of the ownership term as stipulated by the LOH 2023, the property owner may directly or authorize another organization or individual to exercise the right of donation,   selling their residential property to individuals eligible to own residential houses in Vietnam (including other foreign individuals)[18]. In cases where the recipient of the gift, buyer, or inheritor of the residential property is a foreign individual, the LOH 2023 does not clearly specify whether such individuals will be entitled to own the property for 50 years, extendable once for another 50 years from the date of issuance of a new Certificate, or for the remaining term stated in the original Certificate of the former foreign individuals. Therefore, we should await further governmental guidance on the implementation of the LOH 2023  to gain a precise understanding of these scenarios.

In the event of not exercising this right of sale or donation, the residential property will become State-owned assets. Therefore, foreign individuals should take note of this regulation to avoid their property becoming State-owned. However, in practice, the terms of 50 years, and 100 years (in cases where extension is granted once) are quite long compared to the average lifespan of a person, hence the risk in such cases is relatively low.

c. Some other considerations

If a foreign individual marries a Vietnamese citizen residing in Vietnam, they are entitled to own residential property and enjoy the rights of property ownership similar to Vietnamese citizens. Therefore, they are not restricted by ownership term, ownership area, or quantity regarding foreign individuals as mentioned in Section b above.

In the case of marrying a Vietnamese residing abroad being permitted to enter Vietnam, the foreign individual is entitled to own residential property and enjoy property ownership rights similar to Vietnamese residing abroad. However, depending on whether the Vietnamese residing abroad retains Vietnamese citizenship, the rights of the foreign individual as the spouse will have a corresponding accordingly. Thus, if the spouse of the foreign individual is a Vietnamese residing abroad who retains Vietnamese citizenship, the scope of property ownership rights for that foreign individual will be expanded similar to domestic individuals, as analyzed in Section 5 below.

3. Real estate business rights

Under the provisions of the law, real estate property includes land, houses, and buildings attached to land, other assets attached to land, houses, buildings, and other assets as stipulated by law[19].

Real estate business is an activity aimed at seeking profits through investing capital to create houses, construction works, land use rights with technical infrastructure in real estate projects for sale, transfer; lease, sublease, lease-purchase of houses, construction works; lease, sublease land use rights with technical infrastructure in real estate projects; transfer of real estate projects; real estate service business[20], collectively referred to as “real estate business”.

As stated above, foreign organizations are not considered as “land users” and are not eligible to own residential property in Vietnam. Therefore, in principle, foreign organizations do not have the right to conduct real estate business in Vietnam.

For foreign individuals, although they do not have the right to use land under the regulations of land laws, they can own residential houses through forms analyzed above. Accordingly, foreign individuals are entitled to own residential houses in Vietnam under certain conditions and limitations, and they also have the rights of homeowners like Vietnamese citizens, including selling, leasing, purchasing, leasing-purchasing, donating, exchanging, inheriting, contributing capital with houses, transferring contracts for the sale and purchase of houses, leasing, lending, allow others for stay, authorizing house management and other rights as prescribed by law[21]. However, these activities shall not be considered as “real estate business activities” under real estate business laws. The LOREB 2023 specifically stipulates the scope of real estate business rights of subjects that are domestic organizations and individuals, Vietnamese people residing abroad, and FIC, excluding “foreign individuals”[22]. Besides, the LOREB 2023 specifies that organizations and individuals engaging in real estate business must establish enterprises in accordance with the laws on enterprises and must register the business lines of real estate business[23]. Therefore, it can be concluded that foreign individuals cannot directly engage in real estate business activities in Vietnam. Instead, they may indirectly conduct real estate business activities by becoming owners, members, or shareholders of an economic organization authorized to engage in real estate business in Vietnam.

In addition, concerning the exercise of the right to lease residential houses owned legally, foreign individuals may lease them for purposes not prohibited by law. However, the owner must provide written notification of the lease of the residential house to the housing management authority at the district, urban district, town, city under provincial administration, city under central authority, and must pay taxes payable from this rental activity as stipulated by law[24].

[1] Article 12 of the Land Law 2024
[2] Article 4.5 of the Land Law 2024
[3] Article 17.1(c) of the LOH 2023
[4] Article 18.3 of the LOH 2023
[5] Article 15.4 of the LOREB 2023
[6] Article 17.1(b) of the LOH 2023
[7] Article 4.32 of the Law on Enterprise 2020
[8] Article 17.1 of the LOH 2023
[9] Article 17.2 of the LOH 2023
[10] Article 148.5.a of the Land Law 2024
[11] Refer to the spirit in the article https://thuvienphapluat.vn/chinh-sach-phap-luat-moi/vn/ho-tro-phap-luat/bat-dong-san/10932/nhap-canh-mot-ngay-duoc-mua-nha
[12] Article 16 of the LOH 2023
[13] Article 19 of the LOH 2023
[14] Article 5.1 of Decree 95/2024/ND-CP detailing some articles of the LOH 2023
[15] Refer to the Ministry of Construction’s instructions at Official Dispatch No. 5027/BXD-QLN, accessed at https://moc.gov.vn/vn/tin-tuc/1285/74091/huong-dan-ve-so-luong-can-ho-chung-cu-ma-to-chuc–ca-nhan-nuoc-ngoai-duoc-so-huu.aspx
[16] Article 20.2.b of the LOH 2023
[17] Article 20.2 of the LOH 2023
[18] Article 20.2.dd of the LOH 2023
[19] Article 107.1 of Civil Code 2015
[20] Article 3.1 of the LOREB 2023
[21] Article 20.2 and Article 10.1 of the LOH 2023
[22] Article 10 of the LOREB 2023
[23] Article 9.1 of the LOREB 2023
[24] Article 21.2 of the LOH 2023