Vietnam
Last Updated:
May 06, 2008
This past year saw a mad explosion of property fever in Vietnam, pushed partly by laws passed last year liberalizing the entry of foreign developers, who can now compete on equal terms with Vietnamese. Then in April this year, after a stock market crash, followed by a tightening of bank credit for real estate transactions,.the number of successful transactions suddenly dropped by 30-40% compared to late 2007, with speculators trying to unload whatever they could.
A foreign investor may invest in Vietnamese real property by forming a joint venture company with a local partner, or a wholly foreign-owned company, or by forming a Build, Operate and Transfer (BOT) company or one of its variants.
Under a draft bill, individual foreigners also will soon be allowed to buy apartments. They will be able to buy one apartment only, which they will be able to sell after a year.
A foreign investor may invest in Vietnamese real property by forming a joint venture company with a local partner, or a wholly foreign-owned company, or by forming a Build, Operate and Transfer (BOT) company or one of its variants.
Under a draft bill, individual foreigners also will soon be allowed to buy apartments. They will be able to buy one apartment only, which they will be able to sell after a year.
Analysis of Vietnam Residential Property Market »
RENTAL YIELDS
Last Updated: Apr 01, 2009
Gross rental yields figures for apartments in Hanoi and Ho Chi Minh are unavailable due to insufficient data.
TAXES AND COSTS
Last Updated: Dec 10, 2008
Rental Income: Non-residents are liable to pay tax on their Vietnamese-sourced income at a flat rate of 20%.
Capital Gains: Capital gains tax is levied at a flat rate of 25%. Taxable capital gains are computed by deducting the acquisition costs and incidental expenses from the gross sales proceeds.
Inheritance: Inheritance exceeding VND10,000,000 (US$597) is taxed at a flat rate of 10%.
Residents: Residents pay tax on their worldwide income at progressive rates, from 5% to 35%.
Capital Gains: Capital gains tax is levied at a flat rate of 25%. Taxable capital gains are computed by deducting the acquisition costs and incidental expenses from the gross sales proceeds.
Inheritance: Inheritance exceeding VND10,000,000 (US$597) is taxed at a flat rate of 10%.
Residents: Residents pay tax on their worldwide income at progressive rates, from 5% to 35%.
BUYING GUIDE
Last Updated: Nov 06, 2006
Buying property is technically a transfer of leasing rights on the land. The total roundtrip cost of buying a dwelling house is around 6.2% of the property value.
To register a property takes around 67 days and five procedures, according to the World Bank.
To register a property takes around 67 days and five procedures, according to the World Bank.
LANDLORD AND TENANT
Last Updated: Jun 28, 2006
Vietnamese rental practice is strongly pro-landlord.Rent: The rent can be freely negotiated by both parties. It is usually fixed for the duration of the lease term, typically 1 to 2 years. Rents are paid well in advance and interest is charged on late payments.
Tenant Security: If payment is delayed by 15 days, the landlord has the right to terminate the tenancy agreement by sending a 3-day written notice to the tenant. The landlord is entitled not to return the security deposit and to charge the tenant one month's rent penalty.
ECONOMIC GROWTH
Last Updated: May 06, 2008
Break-neck economic growth
Vietnam (pop. 83.6 million) is one of south-east Asia’s fastest growing economies. The average growth for the past five years has been 7.2%. Officially a socialist government, elements of market forces and private enterprise were introduced from the late 1980s.After gaining independence from France, Vietnam was divided into two, the communist North Vietnam and the France and US-backed South Vietnam in 1954. A bitter war ensued, until the South Vietnam government collapsed in 1975. Vietnam was officially reunited in 1976 under the socialist government.
However, with the international decline of capitalism and the collapse of the Soviet Union, pro-market economic reforms were adopted in the late 1980s and 1990s. In 1986, the government initiated doi moi, the policy of economic renovation.The stock market opened in 2000. Vietnam has seen a rapid rise in foreign investment. In the cities, the consumer market is growing, fuelled by the appetite of a young, middle class for electronic and luxury goods.
Despite the reforms, the government still has to tackle problems of corruption and poverty. The slow pace of political reforms is also worrying.
Vietnam joined the World Trade Organization in January 2007. New legislation governing private enterprises and investment are rapidly improving the operating environment for local and foreign investors.
