How Foreigners Could Buy Real Estate in Vietnam?

       

Regulations on foreigners owning real estate in Vietnam are regulated in Civil Code 2015, Law on Land 2013, Law on Housing 2014, Decree no. 99/2015/ND- CP on guidelines the Law on Housing and related documents.

For land, foreign individuals are not eligible to use land assigned or leased by the State, recognized land use rights, received transfer of land use rights. However, a foreign-invested enterprise could be allocated or leased land by the State, recognized land use rights, or received a land use right transfer. Foreign-invested enterprises that are assigned land by the State with the collection of land use levies to execute investment projects on the construction of houses for sale or for sale in combination with lease.

For housing, foreign entities eligible for the homeownership in Vietnam include: foreign entities who invest in project-based housing construction in Vietnam as prescribed in this Law and corresponding regulations of law; foreign-invested enterprises, branches, representative offices of foreign enterprises, foreign-invested funds and branches of foreign banks operating in Vietnam (hereinafter referred to as foreign organization); foreign individuals who are allowed to enter Vietnam.

The foreign entities are eligible for the homeownership in Vietnam if they invest in project-based housing construction in Vietnam as prescribed in this Law and corresponding regulations of law; or buy, rent and purchase, receive, or inherit commercial housing including apartments and separate houses in the project for housing construction, except for areas under management relating to national defense and security as prescribed in regulations of the Government.

Foreign organizations and individuals must have documents proving being the eligible subjects and meeting conditions to own houses in Vietnam. A foreign individual must have an unexpired passport bearing the entry seal of the Vietnam’s immigration authority and not given diplomatic immunity and privileges according to Ordinance on diplomatic immunity and privileges of diplomatic missions, consular offices, and representative authorities of international organizations in Vietnam. Foreign organizations must be subjects of owning houses in Vietnam which have investment registration certificate or a permission issued by a Vietnam’s competent authority for operation in Vietnam which is still unexpired at the time of housing transaction (hereinafter referred to as investment registration certificate).

A foreign entity shall not be granted a Certificate of the house and may only sell or offer it to another entity eligible to own housing in Vietnam in the case being: a foreign organization or individual receives a house as an inheritance or a gift which is located in an area in which foreign entities must not own houses, or the quantity of which exceeds the permissible limits; a foreign organization that does not operate in Vietnam, or a foreign individual who is not permitted to enter Vietnam, receives a house in Vietnam as a gift or an inheritance.

For specific situations, to avoid future dispute in house ownership arisen from the purchase, lease of property, house, land from the state, developer or other seller, or lessor it is important that the client check with property lawyers for eligibility, conditions and other relevant matters.

We help clients overcome cultural barriers and achieve their strategic and financial outcomes, while ensuring the best interest rate protection, risk mitigation and regulatory compliance. ANT lawyers have Attorneys in Hanoi, Attorneys in Ho Chi Minh and Attorneys in Danang.

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How to Obtain Construction Practicing Licenses in Vietnam?

        

The Construction Practicing License (practicing license) shall be issued to any Vietnamese citizens, overseas Vietnamese or foreigners who legally carry out construction activities in Vietnam in order to hold certain positions or operate their own construction business as prescribed in the amended Law on Construction 2020.

Holders of titles and individuals practicing construction activities who are required to possess practicing licenses as prescribed in Law on Construction include construction investment project managers, construction planning design managers, construction survey managers, construction design or design verification managers, construction supervision consultants, and managers in charge of formulating, verifying and managing construction investment costs. Any foreigner who obtained a practicing certificate issued by a foreign authority or organization and has practiced construction in Vietnam for less than 06 months shall be permitted to practise construction activities. If he or she has practised construction in Vietnam for at least 06 months, he or she is required to change the construction practicing license.

A foreigner shall be issued with the practicing license if he or she: has full legal capacity as prescribed by law and obtains a residence permit or work permit in Vietnam; has qualifications and experience relevant to requirements of the practicing certificate; passes the test in the field that is covered by the practice license applied for.

Practicing licenses shall be classified into Rank-I, Rank-II and Rank-III. In particular, a Rank-I practicing license is granted to the individual who gains a bachelor’s degree in appropriate major and at least 07 years’ experience relevant to requirements of that practicing license; a Rank-II practicing license is granted to the individual who gains a bachelor’s degree in appropriate major and at least 04 years’ experience relevant to requirements of that practicing license; a Rank-III practicing license is granted to the individual who has appropriate qualifications and at least 02 years’ experience relevant to requirements of that practicing license with respect to the holder of the undergraduate degree and at least 03 years’ experience with respect to the holder of the associate degree or intermediate diploma.

The competence authority in Vietnam to grant practice licenses: the construction-specialized agencies directly under the Ministry of Construction shall grant Rank-I practicing licenses; The Department of Construction issues Rank-II, Rank-III practicing license and recognized socio-professional organizations grant Rank-II, Rank-III practicing license to individuals who are their members and members.

An application for issuance of the construction practicing license for the first time includes: An application form enclosed with the applicant’s 02 color 4 x 6 cm and white background pictures which are taken within the last 06 months; Qualification(s) granted by a legal training institution in accordance with the type or rank of the certificate applied for; Decisions on task assignment (responsibility assignment) issued by an organization to an individual or written confirmation of completed typical tasks provided by the legal representative of the investor, in case the individual runs his/her own construction business, a contract and record on commissioning of listed typical tasks are required; Legal residence-related documents or work permit issued by a Vietnam competent authority, applicable to foreigners. The above documents must be notarized, legalized, authenticated then translated with certified true copies into Vietnamese or included in a file that contains color photos of originals or copies presented together with the originals for comparison. Besides, satisfactory test result in case the test is done before the date of submission of the application for the practicing license.

For application of the practicing license, the applicant shall submit an application form for issuance of the practicing license, electronically or by post or in person, to the issuing authority. From the date on which the satisfactory application is received, the issuing authority shall issue the construction practicing license within 20 days in the case of issuance of the license for the first time. In the case the application is unsatisfactory, the issuing authority shall notify the applicant in writing once within 05 days from the date on which the application is received.

The practicing license of a foreign individual, its effective period shall be determined according to the period specified in the work permit or temporary resident card issued by a competent authority but not exceed 05 years.

The above are provisions on the process of granting construction practicing licenses for foreign individuals working in Vietnam under the amended Law on Construction 2020. The amended Law on Construction 2020 takes effect from January 1, 2021.

ANT Lawyers, a law firm in Vietnam with offices in Hanoi, Da Nang, Ho Chi Minh city could assist clients with application process.

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Temporary Residence Card in Vietnam

        

If a foreigner have been sponsored work permit in Vietnam to work or he/she decides to set up a company in Vietnam, he/she could be granted temporary residence card to live in Vietnam instead of applying and re-newing business or travel visas every three months.

We detail here some procedures which help foreigners to prepare for before applying for temporary residence card.

I. Subjects to be granted temporary residence card:

Members of foreign representative agencies and their accompanying relatives (father, mother, wife, husband, children under 18 years old).

Foreigners who work with the Institute of the Supreme People’s Procuracy, the Supreme People’s Court, the ministries, ministerial-level agencies, agencies attached to the Government and People’s Committees of provinces and cities directly under the Central Government and the Central offices of mass organizations, mass organizations.

Foreigners who work in projects already approved by competent state agencies licensed in Vietnam.

Foreigners who work with businesses in Vietnam has the work permit valued more than 01 year.

Persons on the payroll of foreign representative offices and branches of economic organization, culture and other professional organizations of foreign non-governmental organizations based in Vietnam.

Foreigners staying in Vietnam for other purposes.

II. Conditions for implementation

+ Time to stay in Vietnam more than 01 year;

+ Valid passport more than 01 year;

III. The composition, the number of records:

1) The composition profile, including:

A written request of agencies, organizations and individuals offering, guarantee and propose for temporary residence card;

01 declaration of information of foreigners who apply for temporary residence, with photos and sealed by the agency or organization: A written request for temporary residence card (Form N7A); a declaration about Foreigners applying for temporary resident card (Form N7B)

02 3 x4 cm size photographs;

01 copies of passport, valid visa, immigration cards (bring original for comparison);

01 copies or photo (bring the original for comparison) proof of purpose to stay in Vietnam.

As the case may file appropriate documents: investment licenses, permits the establishment of enterprises, work permit in Vietnam, certificate of board members and permits the establishment of representative offices, marriage/birth registration.

2) The number of records: 01 (one).

IV. Implementing agencies administrative procedures:

Immigration management Department, Police provinces and cities directly under the Central Government.

V. Implementation time: 05 to 07 days;

VI. Subjects performed: by organizations and individuals;

We help clients overcome cultural barriers and achieve their strategic and financial outcomes, while ensuring the best interest rate protection, risk mitigation and regulatory compliance. ANT lawyers have Attorneys in Hanoi, Attorneys in Ho Chi Minh and Attorneys in Danang.

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What Are Rights and Obligations of Foreigners Owning Properties in Vietnam?

        

According to the current Vietnamese law, the ownership of houses in Vietnam by foreigners has changed significantly towards more openness. However, home ownership of foreigners and Vietnamese citizens are still different.

Foreign house ownership is allowed in commercial housing construction projects only (i.e., only in newly formed residential areas), not an area of national defense and security purpose. In case of house donation or inheritance of house not subject to this regulation, the foreigner only receives the value of that house.

The foreigners combined may not buy, rent and purchase, receive, inherit and own more than 30% of apartments in an apartment building; or not more than 250 houses of separate houses including villas, row houses in an area whose population is equivalent to a ward-administrative division

In an area whose population is equivalent to that of a ward, if there is a commercial housing construction project for sale or lease-purchase, the quantity of detached houses that may be owned by foreigner is specified below: where the quantity of detached houses of an project is fewer than 2,500, foreigner may own up to 10% of the houses of such project; where there is only one project whose quantity of detached houses is equivalent to 2,500 houses, foreigners may own up to 250 houses of them; where there are two or more projects where the total quantity of detached houses does not exceed 2,500 houses, foreigners may own up to 10% of the houses of each project. In case a house is donated or inherited in excess of the number of houses under this regulation, only the value of that house is entitled.

The foreigners are eligible for the homeownership as agreed in agreements on housing sale, lease purchase, gifting, or inheritance for not more than 50 years from the date of issuance of the Certificate and have can be extended further according to the Government’s regulations if the need arises; house ownership period must be specified in the Certificate.

In case a foreign individual marries a Vietnamese citizen or an overseas Vietnamese, he/she can own a stable, long-term house and has the same rights as a Vietnamese citizen.

The foreign organization are eligible for the homeownership as agreed in agreements on housing sale, lease purchase, gifting, or inheritance for not longer than duration stated in their Certificate of investment, including extension duration, the duration of the homeownership shall be determined from the day on which the organization is granted the Certificate and stated in such Certificate.

In addition, foreign organizations and foreign individuals permitted to enter Vietnam have the same obligations as Vietnamese citizens but must comply with the following provisions:

If the homeowner is a foreign individual, he/she is entitled to lease house for lawful purposes provided that he/she notifies the agency of district in charge of housing where the house is located of housing lease as prescribed in regulations of the Minister of Construction and pays taxes on housing lease as prescribed before leasing houses. If a foreign individual gets married to a Vietnamese citizen or an oversea Vietnamese, he/she qualifies for stable and long-term homeownership and has all rights of homeowner similarly to Vietnamese citizens.

If the homeowner is a foreign organization, its house is/are only provided for their employees but it is not allowed to use their house for lease, offices, or other purposes.

The above are provisions on rights and obligations of foreign organizations and individuals when owning properties in Vietnam. For specific matters, please consult with property, real estate lawyers for legal advice for the property transaction from deposit agreement, house sales and purchase agreement, and registration of ownership with authorities for certificate of land use right, or house owership certificate of to avoid property disputes in Vietnam, where the house ownership, land use rights are restricted for foreigners.

We help clients overcome cultural barriers and achieve their strategic and financial outcomes, while ensuring the best interest rate protection, risk mitigation and regulatory compliance. ANT lawyers have law firm in Hanoi, law firm in Ho Chi Minh City and law firm in Da Nang.

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Digitalizing Vietnam Supporting Industry Database

       

On June 19, the Department of Industry (Vietnam Ministry of Industry and Trade) collaborated with the International Financial Corporation (IFC) of the World Bank Group, with funding from the Australian Department of Foreign Affairs and Trade (DFAT) and the Swiss Federal Economic Office (SECO) organized the “Opening Ceremony of the Database System of Vietnam’s processing, manufacturing and supporting industries” and put the Supporting Industry Portal into operation.

This system is intended to support the provision of adequate information about enterprises for organizations and individuals wishing to search, connect and trade; It provides foreign-invested enterprises (FDI enterprises) with an overview of production capacity, supply capability, product quality and technology of Vietnamese manufacturing enterprises, as the same time, enhancing connectivity between Vietnamese enterprises and FDI enterprises and investors.

Supporting industries are industries that produce raw materials, accessories, spare parts, and semi-finished products to supply the manufacturing, processing and assembling industry of finished products being production materials manufacturing or consumer products.

Vietnam’s supporting industry is growing and playing an important role in participating in the global supply chain and value chain. Large foreign companies and corporations have established many company manufacturing, processing and assembling factories in Vietnam. In 2019, the whole country has 3,478 new projects, with a total capital of nearly 31.8 billion USD; in which, processing and manufacturing industry accounted for the highest proportion with a total capital of 21.6 billion USD, accounting for 67.8% of total registered investment capital. This demonstrates the expectation of FDI enterprises to reduce transportation costs and risks, so it will create great opportunities for domestic parts suppliers to develop production.

According to data on the Enterprise Information Database system, Vietnam now has 500 enterprises in the field of mechanical engineering, 347 enterprises in the field of automobiles, 750 enterprises in the field of electricity, 1,145 enterprises in the textile sector and 910 enterprises in the footwear sector.

The database system of manufacturing, processing and supporting industries is an important milestone in addressing the need to establish a domestic B2B connection network with foreign countries, helping enterprises and investors finding information quickly, accurately, meeting the needs of investment connection, enhancing cooperation opportunities between Vietnamese enterprises and FDI enterprises and multinational corporations.

In the future, the government will continue to support resources and finance to improve the qualifications of the database system management staff, expand the data information of many industries and continue to develop new features that allow enterprises to create their own booths to introduce products, proceed to establish an e-commerce platform for the processing, manufacturing and supporting industries, help enterprises proactively approach and promote cooperation, contribute to the development of Vietnam’s industry in the future.

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How Mediation and Labor Arbitration Councils Work in Settlement of Labor Disputes?

       

During and after the Covid-19 pandemic, the financial health of enterprises have been negatively impacted leading to management’s decision to reduce cost through termination of labour contract with employee. The illegal termination of labour contract could lead to disputes between employer and employee which sometime would cost the employer more than it gains. It is important for the employer to engage with labour lawyers to consult before taking the decision to consider factors that would involve. After disputes arise, mediator or labour arbitration councils could be used for resolving disputes.

Individual labor disputes shall be settled through mediation by labor mediators before being brought to the Labor arbitration council or the Court, except for the following labor disputes which mediation is not mandatory: disputes over disciplining under dismissal or unilateral termination of employment contracts; disputes over damages and allowances upon termination of employment contracts; disputes between a domestic worker and his/her employer; disputes over social insurance in accordance with social insurance laws, disputes over health insurance in accordance with health insurance laws, disputes over unemployment insurance in accordance with employment laws; disputes over insurance for occupational accidents and occupational disease in accordance with occupational safety and hygiene laws; disputes over damages between an employee and enterprises, organization that dispatches the employee to work overseas under a contract; disputes between the outsourcing employee and the employer using outsourcing employee.

The mediator shall complete the mediation process within 05 working days from the receipt of the request from the requesting parties or the authority. Both disputing parties must be present at the mediation meeting. The disputing parties may authorize another person to attend the mediation meeting.

In case the two parties reach an agreement, the labor mediator shall make a written record of successful mediation which bears the signatures of the disputing parties and the labor mediator. In case the two parties do not reach an agreement, the labor mediator shall recommend a mediation option for the disputing parties to consider. Where the two parties do not agree with the recommended mediation option or where one of the disputing parties is absent for the second time without a valid reason after having been legitimately summoned, the labor mediator shall make a record of unsuccessful mediation which bears the signatures of the present disputing parties and the labor mediator.

The disputing parties shall be entitled to request the settlement from Labor arbitration councils in the following cases: a disputing party fails to perform the agreements specified in the record of successful mediation; mediation is not mandatory; the labor mediator fails to initiate the mediation by the deadline; the mediation is unsuccessful.

After the Labor arbitration council has been requested to settle a dispute, the parties must not simultaneously request the Court to settle the same dispute. If within 07 working days from the receipt of the request, an arbitral tribunal is not established; or within 30 working days from the establishment of the arbitral tribunal, it fails to issue a decision on the settlement of the labor dispute, parties shall be entitled to request the settlement from the Court. In case a disputing party fails to comply with the decision of the arbitral tribunal, the parties are entitled to bring the case to Court.

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What is Agreed Matrimonial Property Regime of Spouses Under Vietnam Laws?

       

Husband and wife have the right to choose to apply the statutory or agreed property regime. Basic contents of an agreement on the matrimonial property regime (prenuptial agreement) includes: (i) Property determined as common property and separate property of the husband and wife;(ii) Rights and obligations of the husband and wife toward common property, separate property and related transactions; property to meet the family’s essential needs;(iii) Conditions, procedures and principles of property division upon termination of the property regime;(iv) Other related contents.

When choosing to apply the agreed matrimonial property regime, husband and wife may reach agreement on determination of property as follows:(i) Matrimonial property includes common property and separate property of husband and wife;(ii) Husband and wife have no separate property and all property a spouse has before marriage or during the marriage period is common property;(iii) Husband and wife have no common property and all property a spouse has before marriage and during the marriage period is separate property of that spouse;(iv) Property is determined as otherwise agreed by husband and wife.

Although property regime is based on the wills of the parties, it still must comply with regulation of law. Agreed property regime shall be made in writing before their marriage and be notarized or certified. The agreed matrimonial property regime shall be established on the date of marriage registration. It should be noted that in case of applying the agreed matrimonial property regime, when establishing and making a transaction, a spouse shall provide a third party with relevant information. If a spouse fails to perform this obligation, the third party shall be regarded as acting in good faith and have his/her/its interests protected.

An agreement on the matrimonial property regime shall be declared to be invalid by a court when: (i) It fails to meet the conditions on effect of transactions;(ii) It violates one of the provisions in Article 29, 30, 31 or 32 of Law on marriage and family 2014;(iii) Its contents seriously infringe upon the rights of being supported and inherit and other lawful rights and interests of parents, children and other family members.

Specifically, both parties must still comply with the regulations on:

General principles of the matrimonial property regime: (i) Husband and wife have equal rights and obligations in the creation, possession, use and disposition of their common property without discrimination between housework labor and income-generating labor; (ii) Husband and wife have the obligation to ensure conditions for meeting their family’s essential needs.; (iii) When the performance of property rights and obligations of husband and wife infringes upon lawful rights and interests of the wife, husband, their family or other persons, compensation shall be paid.

Rights and obligations of husband and wife to meet their family’s essential needs: (i) Husband and wife have the right and obligation to conduct transactions to meet their family’s essential needs; (ii) In case husband and wife have no common property or their common property is not enough to meet their family’s essential needs, they shall contribute their separate property according to their financial capacity.

Transactions related to the home being the sole domicile of husband and wife and transactions with third parties in good faith related to bank accounts, securities accounts and other movable assets which registration for ownership and use is not required according to regulation of law.

In summary, although property regime is based on agreement of both parties, this written agreement still must comply with regulation of law and is not allowed to violate rights of other party or any other individual, organization. If such agreement violates above provisions, persons with related rights and interests may request a court to declare it invalid. According to regulation of law, following agencies, organizations and individuals are entitled to require the Court to declare matrimonial property regime of spouse invalid: (i) Spouses have agreed on property regimes; (ii) Person whose right and legal interest violated due to matrimonial property regime of spouse and his/her guardian.

Once property regime agreement is mad, are both parties entitled to edit?

In case of applying the agreed matrimonial property regime during the marriage period, husband and wife may reach agreement to modify and supplement some or all contents of that property regime or apply the statutory matrimonial property regime. The agreement modifying and supplementing the matrimonial property regime shall be notarized or certified in accordance with law. The agreement modifying and supplementing contents of the matrimonial property regime shall take effect on the date it is notarized or certified. A spouse shall provide a third party with relevant information. Property rights and obligations arising before the time of modifying and supplementing the matrimonial property regime must remain legally valid, unless otherwise agreed by involved parties.

Upon divorce, the following case will apply statutory matrimonial property regime, it means that parties will reach agreement, if they fail to reach agreement, at the request of a spouse or both, a court shall settle it according to Law on marriage and family: (i) There is no written agreement of matrimonial property regime of spouse;(ii) Written agreement of matrimonial property regime of spouse is declared completely invalid by the court.

Case will apply agreed matrimonial property regime: There is a written agreement of matrimonial property regime and this written agreement is not declared completely invalid by the Court. The following cases will apply provisions of Law on marriage and family:(i) The agreement is insufficient or unclear;(ii) The matters are not agreed by both husband and wife.

It is important that spouses consult with family lawyers if potential disputes would lead to divorce for proper preparation before filing a lawsuit.

We help clients overcome cultural barriers and achieve their strategic and financial outcomes, while ensuring the best interest rate protection, risk mitigation and regulatory compliance. ANT lawyers have Attorneys in Hanoi, Attorneys in Ho Chi Minh and Attorneys in Danang.

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