Legal Regulations in Purchasing Real Estate in for Foreigners in Vietnam

Vietnam has become a better place for foreigners to visiting and staying. Many chose Vietnam as home and they come to Ho Chi Minh City, Ha Noi, Da Nang, Phu Quoc, Nha Trang… to buy real estates for living. Many foreigners consider seeking understanding and with the advisory of their real estate lawyers in Vietnam to purchase the property under their name for best interest protection. There are a number of foreigners seek to cooperate with local Vietnamese under investment agreement to invest in properties. It has always been suggested the buyer or investor to receive legal advice from lawyers and real estate law firms in Vietnam before committing the investment to a certain extent.

According to the Law on housing 2005, foreign organizations and individuals investing in construction of houses for sale and lease in Vietnam have the right to own the houses in Vietnam. However, according to the provisions of the Law on housing 2014, the house owners expand and include foreigners being investors building the houses under investor projects, foreign organizations operating in Vietnam and foreign individuals being allowed to enter Vietnam under the provisions of the Law on Entry, Exit, Transit and Residence of Foreigners in Vietnam; and are not entitled to diplomatic privileges and immunities.

Under the provisions of the Law on housing 2014, foreign organizations and individuals are allowed to own apartments, individual houses (villas and townhouses) in commercial housing projects. The total number of foreign individuals/organizations owned does not exceed 30% of an apartment building or does not exceed 10% or 250 houses of a housing project. Foreign individuals may own houses for up to 50 years and are allowed to extend for no more than 50 years. Foreign organizations own the houses according to the time limit on the Investment Registration Certificate and the extension period. During the time of owning the houses, foreign individuals are allowed to sublease, but foreign organizations are not allowed to sublease the houses.

For foreign individuals/organizations, when buying the houses in Vietnam, it is necessary to have a well drafted sales contract for purchase and sale of the houses because all rights and obligations related to the purchase, sales and ownership of houses are regulated in the contract. Therefore, the buyer should consider the contract carefully, usually with the help of real estate lawyers whom understand Vietnam laws before signing, in order to protect their legitimate rights and interests.

The foreigner when buying and selling the houses, especially off-plan house, need to also pay attention to the regulations on payment schedule in the contract. According to Article 57 of the Law on housing 2015, the payment in the purchase, sales, lease sales of the off-plan real estate in Vietnam is carried out in installments, and the first time must not exceed 30% of the contract value, the next times must be in accordance with the construction schedule, however, not exceeding 50% of the contract value when not handed over when the buyer is an enterprise with foreign investment, not exceeding 70% the value of contract, if the buyer is the foreigner individual the payment is not exceed 50% the value of the contract before handing over the house to the buyer. Until the buyer is issued with a certificate of land use right, ownership of houses and other assets attached to the land, the buyer shall pay no more than 95% the value of contract.

Foreigners in Vietnam need to be assisted to be familiar with the laws relating to the purchase and sale of real estate in order to protect their legitimate rights and interests when participating in transactions in Vietnam. It is important that the foreigners consider using the services of law firm in Vietnam specializing in real estate to advise and help manage the transaction.

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Certain provisions of 2012 Labor Code will be amended

The Law on Amendments and Supplements to 37 Laws relating to planning and the XIVth National Assembly’s Resolution No. 72/2018/QH14 prescribes certain contents of the 2012 Labor Code which have been and will be amended or supplemented, including:

- Delete the word “planning” in clause 2 of Article 235 on state management of labor.

- Intend to amend and supplement Chapter XIII on trade unions with a view to giving permission for establishment of employees’ representative organizations which are not subordinate to the Vietnam General Federation of Labour, including the following regulations: 

+ Regulation on the employee’s right to establish and accede to representative organizations which are not subordinate to the Vietnam General Federation of Labour;

+ Principles-based regulation on requirements and processes for establishing, authority to register, operations and dissolution of employees’ representative organizations.

- Intend to supplement Chapter V, Chapter XIII and Chapter XIV relating to trade unions, employees’ representative organizations, right of discussion at workplace, collective bargaining agreements, resolution of collective labor disputes and strikes.

This also includes the regulation on resolution of labor disputes that may arise in the context of multiple representative organizations in existence, such as disputes between representative organizations about the right of collective bargaining, etc.

-thuvienphapluatvn-

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Foreign investors prefer indirect investment in Vietnam

HCMC - Foreign investors have stepped up their indirect investments in Vietnamese enterprises through capital contributions and stake acquisitions, instead of direct investments.

According to data from the Ministry of Planning and Investment’s Foreign Investment Agency, new foreign direct investment (FDI) approvals in Vietnam this year reported a decline over last year, while there was a surge in foreign indirect investment inflows.

Specifically, from early this year to December 20, foreign investors conducted nearly 6,500 transactions to contribute funds and acquire shares in local firms, with a combined value of US$9.89 billion, up a staggering 59.8% from the year-ago period.

Meanwhile, the country issued investment certificates for over 3,000 new FDI projects, with total registered capital of nearly US$18 billion in the period, down 15.5% year-on-year.

In addition, FDI investors registered an additional US$7.59 billion for nearly 1,200 other operational projects in the period, marking a fall of 7.59% against the same period last year.

In general, the country attracted US$35.46 billion in new foreign investment this year, equivalent to 98.8% of the figure recorded last year.

According to the Foreign Investment Agency, foreign investors injected capital into 18 sectors, of which the manufacturing and processing sector was the most attractive, receiving a total investment of US$16.58 billion, making up 46.7% of the fresh capital.

The real estate sector came in second, with US$6.6 billion, followed by the retail and wholesale sector, with US$3.67 billion.

Japan remained Vietnam’s largest investor this year, with US$8.59 billion, accounting for nearly 24.2% of the total. South Korea ranked second, with US$7.2 billion, and the third largest investor was Singapore, with US$5 billion.

- Saigon Times -

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Vietnam wants China to import more, invest more

China should increase imports of Vietnamese goods and make more hi-tech investments, government officials and business representatives say.

Le Hoai Trung, Vietnam's Deputy Minister of Foreign Affairs, proposed at the Vietnam-China Economic Promotion Forum Thursday that China creates more favorable conditions for more Vietnamese goods to enter the country through border gates.

"We hope that the Chinese government will be more open to the Vietnam market, especially for products that Vietnam has strong supply and China has high demand for, such as rice, pork, milk, agriculture, seafood, electronics and consumer goods," Trung told the forum attended by 500 Vietnamese government and business representatives and 200 Chinese counterparts.

Vietnam has a high trade deficit with China. From January to November, the country exported $37.7 billion worth of goods to China and imported $59.6 billion, a trade deficit of $21.9 billion, according to Vietnam Customs.

Vu Tien Loc, chairman of the Vietnam Chamber of Commerce and Industry, said: "Although Vietnam’s exports to China have been increasing this year and trade deficit is declining, I don’t think this trend will be sustainable."

He said it would require a big effort from authorities to pave the way for Vietnamese goods, especially agriculture products, to enter China.

Loc also proposed that that unofficial trade activities between the two countries at the border be formalized to guarantee long-term benefits for both sides.

As protectionism in the world rises, Vietnam and China need to cooperate to control trade cheating, like Chinese businesses exporting its goods via Vietnam to other countries, which would impact on sustainable development of both countries, Loc said.

Trung said at the forum that Vietnam welcomes foreign direct investment from China that is focused on high technology in infrastructure, supporting industry and agriculture.

He added that Chinese FDI businesses should ensure environmental protection and Vietnamese labors’ benefits when investing in the country. 

Loc added that China, as a leading country in the world in the high-tech sector, can provide this kind of investment to Vietnam.

"Vietnam is looking for a new type of foreign investment which has higher quality, integrate more with Vietnamese businesses using high-technology which are environment-friendly," he said.

China is Vietnam’s largest import market, while Vietnam is China’s largest trading partner in ASEAN and the 8th in the world.

From January to November, bilateral trade turnover reached over $97 billion, up 16.5 percent year-on-year, according to official data.

China has invested in over 2,000 projects in Vietnam, with a total registered capital of $13 billion. It ranks 7th out of 129 countries with FDI in Vietnam.

-evnexpress-

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