Vietnam Land Ownership Guide
What is the legal way to own land in Vietnam?
Under Vietnam’s Constitution, all land is collectively the property of all the people of Vietnam. As such, no one, whether Vietnamese or foreign, is permitted to ‘own’ land in respect of holding indefeasible title.
Instead, a person (a land user) can get access to land use rights in one of the following ways:
- by allocation from the State, for a definite or indefinite period;
- by leasing from the State;
- by sub-leasing through a developer of an industrial;
- by transfer from an existing land user zone or high-tech zone;
- by way of capital contribution by an existing land user.
Allocation of land by the State
Leasing from the State
Land sub-leased from Developer
Vietnamese laws also establish and recognize specific zones for development, including industrial, export processing and high-tech zones. Land for these zones can be leased to foreign-invested enterprises and domestic enterprises (ie. the developer), who develop and operate in these zones. Once construction of the infrastructure for the zone is completed, the developer can sub-lease the land to sub-lessees, including to foreign-invested enterprises. If the developer pays land rental on a lump sum basis it may sublet the land and collect rent either by an annual payment or a lump sum payment. However, if the land rental is made annually, the developer must only collect the rent annually from the sub-lessees in the relevant zone.
The law contemplates and regulates several forms of land transfer, including assignment (equivalent to ‘sale’), inheritance, gift and capital contribution.
Land transfer Contribution of land use rights as Capital
- Generally, in order to contribute land use rights, the Vietnamese party must have been allocated or leased the land use rights and have paid all land use fees or land rental in full.
- Once contributed, the joint venture enterprise has the same rights as the land users who were allocated or leased land by the State with full payment of land use fees or land rental. They may assign, lease, donate, mortgage or even contribute those land use rights.
Zoning and land management
Zoning and planning is determined at each level of Government, from the National Assembly down to the District People’s Committees. There are two main categories of land in Vietnam: land for agricultural purposes and land for non-agricultural purposes (which includes residential land and land for business or production purposes).
‘Real estate business’, which includes property development and property related services, is a ‘conditional’ investment sector. Foreign investors who wish to conduct real estate business in Vietnam need to take into account the following:
Housing regime for foreigners
Effective from 1 July 2015, restrictions on the purchase of residential houses by foreigners have been significantly relaxed. In principle and subject to restrictions, a foreign individual may purchase and own houses in Vietnam, if that person is permitted entry into Vietnam.
- Foreign invested enterprises that are licensed to develop residential projects;
- Foreign invested enterprises that are not engaged in residential development;
- Branches, representative offices of foreign companies;
- Foreign funds and foreign bank branches that are licensed to operate in Vietnam.
CRE Vietnam has an experienced working relationships with all of the main Vietnamese authorities body. It is our expertise to guide you through the acquisition of land for project in Vietnam.