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 – Law firm in Vietnam that
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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