In general, it is not permitted to own land in Vietnam as a private entity because the land belongs to the people and the State of Vietnam thereby operates as the administrator.
However an
ownership of a right to use land is permitted according to Vietnamese Law.
This so-called Land Use Right (“LUR”) Certificate provides the means to
lease land from the State for Vietnamese and foreign people. This LUR
Certificate entitles the land users to protect their legitimate rights and
interests. The sale of a house or real estate is in fact the transfer of
the rights for house ownership combined with the transfer of the land from the
seller. The right to use land can be directly acquired by different ways
that are: lease from the state; sub-lease from a developer of a zone; transfer
from another land user; allocation from the state. The legal grounds for
Land and House Law of Vietnam are stipulated in the Law on Housing 2005 of Vietnam
as well as in the Law on Land 2003. The rights and entitlements of
holders of house ownership and the holders of the LUR Certificate are settled
in this law.
According to
Article 12 of the Law on Housing 2005, the name of the individual who holds the
house ownership shall be written in the house ownership right certificate and
his/her rights are stipulated in Article 21 that include for example the rights
to posses; use; sell; lease; donate; exchange; lend or to let other people stay
temporarily in the house. As stipulated in Article 106 of the Law on Land
2003, the one who holds the LUR and house ownership certificate is entitled to
exercise the full range of rights over the land/house. As such, land use rights
and ownership of assets on the land are combined in the Certificate of Land Use
Right and House Ownership Right (LURC).
But the
possibilities to acquire land or houses depend on the individual/organization
that wishes to do so, because Vietnamese, overseas Vietnamese and Foreigners do
not have the same rights. Especially for foreigners, it was often quite
challenging to acquire land or houses in Vietnam. Before the year of 2009,
foreigners could not legally acquire property but only could make a joint
venture with a Vietnamese company. But the Resolution No. 19/2008(ND-QH12,
effective January 2009, started to entitle foreigners to own houses in Vietnam
under the conditions that the foreigner 1) is hired by an enterprise that
currently operates in Vietnam and 2) must have at least a temporary
residence card to purchase and own an apartment unit in
Vietnam. This five-year piloting program that would end in 2014 is now
discussed by the Vietnamese Prime Minister to continue this program after the
first five years to support the real estate market and to make it more
attractive for foreigners.
Even though about
80,000 expats live and work in Vietnam, only more than 400 cases of foreigners
buying houses in Vietnam could be registered. Of course, this might be due to
the difficulties for foreigners to buy houses before this pilot program . But
this Resolution No. 19, which was guided by Decree No. 51/2009/ND-CP, still
does not make it easy to operate in the real estate market in Vietnam for
foreigners because of the complicated procedures to register ownership. After
the first 5 years, the government stated to have the plan to review the pilot
policy and the Ministry of Construction also opened up for the idea to allow
foreigners to buy houses no matter if they work and do business here or if they
want to buy real estates in
Vietnam.
As the Vietnam’s
real estate situation seems to stand before a turning point, it is necessary to
keep up to date with all legal changes and developments. Due to the fact that
Vietnamese law has special provisions for every organization or individual who
wishes to operate with land and real estates related to House Law, it is
inevitable to know about this legal circumstances in Vietnam.
ANT Lawyers could
assist in different land and house related projects and matters such as land
ownership, house purchase or sale and is aware of the differences between
provisions on house law for foreigners and Vietnamese. Our professionals could
advise clients about possibilities and potential risks concerning real estate
laws, housing laws in Vietnam and furthermore could support clients with
required procedures with the Vietnamese authorities.
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