Allowing foreign entities to own houses in Vietnam brings many positive impacts to the economy and society, but also poses certain challenges. On the one hand, it helps increase and diversify the structure of investment capital in the real estate market, especially large projects, as well as helps improve the quality of housing products. On the other hand, home ownership by these entities can lead to risks of real estate speculation and security and defense concerns. Housing Law 2023 (Housing law) has made new adjustments in the direction of expanding the rights of subjects with foreign elements. The article will summarize and analyze the regulations on housing ownership conditions for this group of subjects in the overall legal system on real estate in Vietnam.

Home ownership is one of the three main rights in the real estate legal system, along with land use rights regulated by the 03 Land Law (Land Law) and real estate business rights are regulated by the Law on Real Estate Business 2023. Regulations on these rights always have an impact and are interdependent. Subject with foreign elements In Vietnam’s real estate law, there are 5 groups: (i) Foreign individuals including foreign citizens and stateless persons who are allowed to enter Vietnam; (ii) Foreign organizations (economic organizations with foreign investment capital; branches, representative offices of foreign enterprises, foreign investment funds; branches of foreign banks in Vietnam); (iii) Foreign organizations with diplomatic functions; (iv) Vietnamese people residing abroad; and (v) People of Vietnamese origin residing abroad. Each group will enjoy rights within a certain scope and limit as summarized in the table below.

Table 1. Summary of rights to real estate of entities with foreign elements

For foreign individuals, organizations, Vietnamese people residing abroad and people of Vietnamese origin residing abroad, the regulations are as follows:

For foreign individuals and organizations

The right to own housing for foreign individuals and organizations under the Housing Law is generally maintained as in the old law with restrictions on space, time and number of houses. Foreign individuals and organizations must first meet the conditions for entry into Vietnam. For individuals, they must have a valid passport with an entry stamp into Vietnam / equivalent legal documents for entry into Vietnam.^[1] and not in the case of enjoying diplomatic or consular privileges and immunities.^[2] As for organizations, a valid Investment Certificate / Investment Registration Certificate / documents related to permission to operate or establish in Vietnam are required.

Foreign individuals and organizations are allowed to own houses in the following ways: (i) purchase or hire-purchase from the project investor, and/or (ii) purchase or hire-purchase from another foreign individual or organization that already owns the house.^[3] This means that foreign organizations and individuals are not allowed to transact secondary housing available from domestic entities. As for organizations with foreign investment capital, they can own housing through self-implementation of housing projects depending on the conditions of the Investment Law 2020 (Investment lawThese organizations can implement projects through the forms of establishing project enterprises; contributing capital, purchasing shares; and/or signing business cooperation contracts (BCC).

There are three main limitations on home ownership for foreign individuals and organizations: (i) Space limitationsForeign individuals and organizations are not allowed to own houses in projects located in areas requiring national defense and security.^[4] (Ii) Time limit, Foreign individuals and organizations are allowed to own houses for a period of 50 years and can request a one-time extension of up to 50 years. That is, the right to own a house has a term of no more than 100 years. (iii) Quantity limit, foreign individuals and organizations are only allowed to own no more than 30% of the number of apartments in an apartment building for residence. In case an apartment building has many units or many blocks sharing the same base, they are only allowed to own a maximum of 30% of the total number of apartments in each unit/block. If it is a single house including a villa or a townhouse, they are allowed to own no more than 250 houses on a area has population size equivalent to a ward (ie 10.000 people)^[5]). This ownership limit also applies even if in a area with population equivalent to a ward There are 02 or more housing construction investment projects. When foreign individuals and organizations have owned enough individual houses, they are not allowed to own additional individual houses in other projects in this area.^[6] These restrictions can be removed if a foreign individual marries a Vietnamese citizen, their rights will be extended to the same extent as those of their spouse.^[7]

Investors should note that they are only allowed to sell, lease-purchase, or give away houses to foreign organizations and individuals in the correct quantity.^[8] Any subsequent sales and lease-purchase transactions will not be legally valid. Before signing the contract, the construction investor can look up information on the Electronic Information Portal of the provincial housing management agency where the housing construction investment project is located and the information system and database on housing and the real estate market through the account granted according to the instructions in Decree 94/2024/ND-CP.^[9].

For Vietnamese citizens and people of Vietnamese origin residing abroad

Vietnamese citizens residing abroad, according to the Housing Law and Land Law, still maintain full home ownership rights associated with land use rights and are equal to domestic entities.^[10] The residence factor does not limit the enjoyment of rights. Vietnamese citizens need to prove their Vietnamese nationality through a valid citizen identification card. To be granted a Land Use Rights Certificate, they need to provide documents proving legal ownership of the house, including: a business license if investing in building a house for business purposes or documents proving the transaction if ownership is through purchase, gift, or inheritance.

The new Land Law has specific provisions on land use rights of people of Vietnamese origin residing abroad, while the Housing Law does not separate provisions for this group but follows the Land Law. The condition for enjoying this right is that they must enter Vietnam according to the law on nationality. People of Vietnamese origin residing abroad can therefore enjoy land use rights in the case of investing in building houses for business purposes.^[11] under the conditions of the Investment Law. In the case of implementing housing construction investment projects, people of Vietnamese origin also have the right to transfer and have their names on the Certificate of land use rights and house ownership without having to ask someone else to have their names on their behalf as limited in the 2014 Land Law. However, in the case of receiving a transfer or inheriting land use rights and house ownership rights, they are only entitled to the value of the rights and are not entitled to have their names on the Certificate. Thus, people of Vietnamese origin have had their rights to real estate expanded in Vietnam. We believe that allowing people of Vietnamese origin to enjoy land use rights will attract investment capital to contribute to the development of their homeland.

[1] Article 3.3.d Decree 95/2024/ND-CP

[2] Article 18 of the 2023 Housing Law

[3] Article 17.2 of the 2023 Housing Law

[4] Article 16.1 of the 2023 Housing Law

[5] Article 5.1 of Decree 95/2024/ND-CP: “The population is determined to be equivalent to a ward, regardless of the administrative unit level, as the basis for determining the number of individual houses that foreign organizations and individuals are allowed to own is 10.000 people according to the planning approved by the competent authority.”

[6] Article 5.2.b Decree 95/2024/ND-CP

[7] Article 20.1.c and 21.2.a of the Housing Law 2023

[8] Article 7.2.a Decree 95/2024/ND-CP

[9] Investors can refer to the Housing and Real Estate Market Information System at the website: https://batdongsan.xaydung.gov.vn/Trangchu.aspx

[10] Article 8.1.b Housing Law 2023

[11] Article 148.4 Land Law 2024