Q&A for investing in Vietnam real estate
Q&A for investing in Vietnam real estate
I have been helping the investor to invest in Vietnam, hereby some most frequently asked question:
1. What is the process of buying an apartment in Vietnam (with/without Vietnam-properties.com service)?
I will update another post for full process, briefly it is:
a. Review and choose project
b. Come to Vietnam for signing contract, open a bank account
c. Follow the payment scheme until the apartment handed-over
d. Managing the asset: Sell or lease
2. What are the new Vietnam housing law’s major changes?
- When it takes effect: 1 of July 2017 - open up for foreign ownership
- All individuals and company that not entitled to diplomatic or consular immunities and privileges are eligible to buy
- Apartment (30% of them) and landed properties (10% but not more than 250 units)
- Ownership for 50 years, 3 months prior, you can ask for another 50 years
- The properties owned by foreigner can be sold, sub-leased, inherited and collateralized
3. What fee involve my apartment buying?
a. VAT fee: 10%
b. Maintenance fee: 2% (no tax on this fee)
c. Pink book fee: admin fee and registration tax for ownership 0.5%
4. What right I have if developer fail?
a. Bank guarantee: As the law: Decree No.76/2015, a project under construction, a developer is to provide buyers a guarantee by a capable commercial bank to guarantee.
b. Late handover: Developer has to pay default interest on the paid amount to the purchaser, the equal default interest rate will be applied to purchaser
c. Failure to complete: The buyer has the right to unilaterally terminate the SPA, have the money back without interest, and a compensation from developer (with equal amount of buyer fail to pay the developer)
5. What if you want to transfer the profit to your country?
- Pay your tax (lease is 10% income tax and sell is 2% of profit made)
- Submit your contract and invoice to bank
- Do the transaction from your Vietnamese bank account
6. IF you are not in Vietnam, how can you handle buying?
- You need to come to Vietnam - when signing the SPA and open a bank account, you can have a representative to take hand-over.
- Vietnam-Properties as your representative in Vietnam to handle: chose the apartment, hand-over, manage the asset
7. Who can manage your asset in Vietnam?
- There is asset management agent in the market, Vietnam-Properties also supply the service as your asset manager: look for tenant, maintenance, sell or lease it, do customer service
8. Payment scheme special note
Before the SPA: For both developers: 20%
Before hand-over: For international developer: 50% max
Before hand-over: For Vietnamese developer: 75% max
9. How much is an interior-furniture package?
Because in Vietnam, normally the apartment be handed over with basic hand-over condition, means only kitchen and bathroom is fully equipped, owner has to do interior
Interior package is
1 BR: 05k USD
2 BR: 10k USD
3 BR: 15k USD
4 BR: 20k USD
10. Is there any discrepancy in tax and other fee related to Vietnamese and foreigners?
11. What is the quota for foreigner?
30% for apartment project and 10% for landed property (not more than 250 units)
12. Is there any specific apartment/ house that foreigner cannot buy?
No, however, there is some location that very sensitive in defense, in that case, developer would not be allowed to sell to foreigner
Foreigner is allowed to buy from the second-market from another foreigner owned
13. Is there any difference in treating Vietnamese and foreigner buyer?
Government side: The pink book procedure of foreigner still has not many cases to conclude
Developer side: No
14. Can I have the spouse name in my apartment?
15. Can I do transaction by USD to buy an apartment?
No, only VND
16. Can I have a loan?
If you have a business or a job here, yes
If you don’t have business or job, it is impossible.
17. A project on paper costs less than an already completed project?
The first sales events would have some discount, after that, the price goes back to normal price, that’s why project in paper costs less than when it completed, besides if the market price goes up (and it normally does), the price will go up.
18. Is there any difference between local and international developer?
Yes, the local developer is cheaper than international one, however, it related to quality, transparency in procedure, and handle the paperwork, International one because they also sell a lot to foreigner they know procedure and have better connection
19. How many times do you need to come to Vietnam/ and for how long?
1 time at least – SPA time
20. Will your spouse/wife/partner need to come with you?
No but need to re-confirm with your developer/agent
21. Marriage certificate need: only when you sell your asset, need to re-confirm with your developer/agent
22. Criminal in business
A project now be guaranteed by the bank as per the law, hardly any scam can happen.
23. What is Vietnam-properties fee involving?
Hour fee: USD 30 per hr
Onetime fee: USD 3,000 per asset
24. Do you need a lawyer in Vietnam?
Depends on you, however for the basic legal matter, you don’t need to.
25. Do you need a lawyer in your country?
Depends on you.
26. What document do you need to provide for Spa/pink book?
a. Single: passport with entry visa
b. Marriage: both signature
27. If I hold a foreigner pink book, who can I sell to
-Vietnamese and foreigner
28. If quota runs out what should I do?
Lease Agreement: 50 years of ownership, and you have the same benefit as sales agreement
29. Bank fee
- Open a bank account: free
- Receiving the money from abroad: no cost
- Transfer money abroad: depends on bank, internet banking will be 11k/transaction, if transaction from 100 mils, charge 0.03%
30. What if you want to invest a few not only one project?
31. What if you want to change the owner of the apartment?
- Before the SPA: you just need to change the name
- After the SPA: before the pink book process start: possible
- After pink book applies process: you will have to do it by yourselfhttp://vietnam-properties.com/Vietnam-property-foreign-ownership