Can foreigners buy houses to rent in Vietnam? If you have a house for rent, do you have to set up a business in Vietnam?

Can foreigners buy houses to rent in Vietnam?

Pursuant to Article 11 of the Law on Real Estate Business 2014, regulations on the scope of real estate business of domestic organizations and individuals, overseas Vietnamese and foreign-invested enterprises are as follows:

1. Any Vietnamese organizations and individuals may conduct real estate trading under following forms:

a) Purchase buildings for sale, for lease, or for lease purchase;

b) Rent buildings for sublease;

c) Build houses on land which is allocated by the State for sale, for lease, or for lease purchase; transfer the land which is divided into smaller lots for sale as prescribed in law on land; build technical infrastructures of cemetery on that land for transfer of both the land and the technical infrastructures;

d) Build houses on the land which is leased by the State for lease; build houses or constructions other than houses on such land for sale, for lease, or for lease purchase;

dd) Build houses on land which is recognized by the State for sale, for lease, or for lease purchase;

e) Build buildings on land which is transferred from organizations, households or individuals for sale, for lease, or for lease purchase;

g) Build buildings on land which is leased from organizations, households or individuals for lease according to proper land use.

h) Receive total or a part of real estate project from investors to build buildings on it for sale, for lease, or for lease purchase;

i) Receive or rent land from organizations, households or individuals to build technical infrastructures on it for transfer or lease of both the land and the infrastructure.

According to current regulations, foreigners cannot do real estate business by buying houses for subletting. Therefore, your purchase of a house for subletting is not allowed in Vietnam.

If you have a house for rent, do you have to set up a business in Vietnam?

According to Article 10 of the Law on Real Estate Business 2014 as amended by Point a, Clause 2, Article 75 of the Investment Law 2020 regulates the conditions of organizations and individuals trading real estate as follows:

1. Any organizations or individuals wish to conduct real estate trading shall set up enterprises or cooperatives (hereinafter referred to as enterprises) and have legal capital not smaller than VND 20 billion, excluding cases prescribed in Clause 2 of this Article.

2. Any organizations, households and individuals who conduct small-scale or irregular transactions of real estate sale, transfer, lease-out, and lease purchase shall not be required to set up enterprises, but they shall make tax declaration as prescribed.

3. The Government shall provide guidance on this Article.

Article 5 of Decree 02/2022/ND-CP stipulates that organizations, households and individuals selling, transferring, leasing, leasing or buying real estate on a small scale, infrequently as follows:

Organizations, households and individuals that sell, transfer, lease, lease-purchase real estate specified in Clause 2, Article 10 of the Law on real estate trading and are not required to meet the eligibility criteria specified in Article 4 of this Decree include:

1. Agencies and organizations that sell houses and construction works, transfer land use rights due to bankruptcy, dissolution, or division in accordance with law.

2. Agencies or organizations that sell, transfer, lease, lease-purchase real estate as public property in accordance with law.

3. Credit institutions, foreign bank branches, Asset Management Company (AMCs), Vietnam Asset Management Company (VAMCs) that sell houses, construction works, transfer land use rights, transfer real estate projects which are put up as guarantee or collateral for debt recovery in accordance with law.

4. Organizations, households and individuals that sell houses, construction works, transfer land use rights under decisions of courts or competent authorities when settling disputes, complaints, and whistleblowing reports.

5. Organizations, households and individuals that sell, lease, lease-purchase houses and construction works under lawful ownership, transfer, lease or sublease land use rights under their lawful land use rights.

6. Organizations, households, and individuals that sell, lease, lease-purchase or transfer real estate that is invested and constructed by themselves and this real estate is not for being put on market in accordance with the law.

According to this Article, the above provision stipulates that when only renting a house under their ownership, they are not required to set up a business but must declare and pay tax in accordance with the law of Vietnam.

Best Regards!