The Housing Law of 2014 has expanded the eligible entities for foreign organizations to own housing in Vietnam. Mr. Nguyen Manh Khoi, Deputy Director of the Housing Management Department, Ministry of Construction, shared notable new points related to this content.
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Regarding Entities Eligible for Home Ownership in Vietnam
According to Resolution 19/2008/QH12 dated June 3, 2008, of the National Assembly on the pilot program allowing foreign organizations and individuals to purchase and own homes in Vietnam, valid until June 30, 2015, foreign organizations eligible to own homes in Vietnam include: Foreign organizations investing in housing construction for lease or sale; Foreign-invested enterprises operating in Vietnam under investment law without real estate business functions, requiring housing for employees working at such enterprises.
The Housing Law of 2014 has expanded the eligibility of foreign organizations to own homes in Vietnam. Specifically, besides foreign enterprises investing in housing construction projects in Vietnam, the Law also adds that organizations such as foreign-invested enterprises; branches and representative offices of foreign enterprises; foreign investment funds and branches of foreign banks operating in Vietnam are also eligible to own homes in Vietnam.
Regarding the Types of Homes that Foreign Enterprises Are Allowed to Own
According to Resolution 19/2008/QH12, the types of homes that foreign enterprises are allowed to own only include apartments in commercial housing development projects. Meanwhile, according to the Housing Law of 2014, foreign enterprises are allowed to buy, lease purchase, receive as gifts, inherit commercial housing (including apartments and separate houses) in housing construction investment projects, except in areas ensuring national defense and security as per the regulations of the Government of Vietnam.
This is one of the important contents, expanding compared to the provisions of Resolution 19/2008/QH12, aiming to contribute to promoting and encouraging foreign investment activities into Vietnam.
Regarding the Number of Homes that Foreign Enterprises Are Allowed to Own
Foreign enterprises without real estate business functions are allowed to own no more than 30% of the apartments in a single apartment building; if it is separate houses (including villas, semi-detached houses) in an area with a population equivalent to a ward-level administrative unit, they are only allowed to own no more than 250 houses.
In areas with a population equivalent to a ward-level administrative unit that has multiple apartment buildings or for separate houses on a street, the specific number of apartments, separate houses that foreign enterprises are allowed to own will be regulated by the Government of Vietnam.
In cases where foreign enterprises are given or inherit houses exceeding the mentioned limit, they are only entitled to the value of such houses. This is a standout point in the policy on housing ownership rights of foreign enterprises by the State when expanding the types of houses eligible for this entity to own.
Regarding the Duration of Home Ownership by Foreign Enterprises
The Housing Law of 2014 generally retains the regulations on the duration of home ownership by foreign enterprises. Specifically, foreign enterprises are allowed to own homes according to the agreements in purchase, lease purchase, gift, inheritance contracts but not exceeding the duration stated in the granted Investment Certificate, including any extended periods; the home ownership period starts from the date the organization is granted the Certificate and is clearly stated in this Certificate.
However, a new point compared to Resolution 19/2008/QH12 is that the Housing Law of 2014 has detailed the handling of homes when the ownership period expires right in the legal text. Accordingly, prior to the expiration of the home ownership period, the owner can gift or sell the home to individuals eligible for home ownership in Vietnam.
If the ownership period expires and the owner does not sell or gift the home, the home will belong to the State of Vietnam.
Source: Financial Magazine
