Legal Regulations in Purchasing Real Estate in for Foreigners in Vietnam

Vietnam has become a better place for foreigners to visiting and staying. Many chose Vietnam as home and they come to Ho Chi Minh City, Ha Noi, Da Nang, Phu Quoc, Nha Trang… to buy real estates for living. Many foreigners consider seeking understanding and with the advisory of their real estate lawyers in Vietnam to purchase the property under their name for best interest protection. There are a number of foreigners seek to cooperate with local Vietnamese under investment agreement to invest in properties. It has always been suggested the buyer or investor to receive legal advice from real estate lawyers and law firms in Vietnam before committing the investment to a certain extent.

According to the Law on housing 2005, foreign organizations and individuals investing in construction of houses for sale and lease in Vietnam have the right to own the houses in Vietnam. However, according to the provisions of the Law on housing 2014, the house owners expand and include foreigners being investors building the houses under investor projects, foreign organizations operating in Vietnam and foreign individuals being allowed to enter Vietnam under the provisions of the Law on Entry, Exit, Transit and Residence of Foreigners in Vietnam; and are not entitled to diplomatic privileges and immunities.

Under the provisions of the Law on housing 2014, foreign organizations and individuals are allowed to own apartments, individual houses (villas and townhouses) in commercial housing projects. The total number of foreign individuals/organizations owned does not exceed 30% of an apartment building or does not exceed 10% or 250 houses of a housing project. Foreign individuals may own houses for up to 50 years and are allowed to extend for no more than 50 years. Foreign organizations own the houses according to the time limit on the Investment Registration Certificate and the extension period. During the time of owning the houses, foreign individuals are allowed to sublease, but foreign organizations are not allowed to sublease the houses.

For foreign individuals/organizations, when buying the houses in Vietnam, it is necessary to have a well drafted sales contract for purchase and sale of the houses because all rights and obligations related to the purchase, sales and ownership of houses are regulated in the contract. Therefore, the buyer should consider the contract carefully, usually with the help of real estate lawyers whom understand Vietnam laws before signing, in order to protect their legitimate rights and interests.

The foreigner when buying and selling the houses, especially off-plan house, need to also pay attention to the regulations on payment schedule in the contract. According to Article 57 of the Law on housing 2015, the payment in the purchase, sales, lease sales of the off-plan real estate in Vietnam is carried out in installments, and the first time must not exceed 30% of the contract value, the next times must be in accordance with the construction schedule, however, not exceeding 50% of the contract value when not handed over when the buyer is an enterprise with foreign investment, not exceeding 70% the value of contract, if the buyer is the foreigner individual the payment is not exceed 50% the value of the contract before handing over the house to the buyer. Until the buyer is issued with a certificate of land use right, ownership of houses and other assets attached to the land, the buyer shall pay no more than 95% the value of contract.

Foreigners in Vietnam need to be assisted to be familiar with the laws relating to the purchase and sale of real estate in order to protect their legitimate rights and interests when participating in transactions in Vietnam. It is important that the foreigners consider using the services of law firm in Vietnam specializing in real estate to advise and help manage the transaction.

Why Client Should Retain Real Estate Lawyers in Vietnam?

Benefits of retaining a Real Estate Lawyer in Vietnam

Due to changes in law attracting foreigners to come to live, and invest in Vietnam, foreigners have growing interest in investment and acquiring real estate. However, as real estate is valuable assets, the law on real estate ownership and real estate transactions are complicated, especially for foreigners.

Under the land ownership regime in Vietnam, land belongs to the entire people with the State acting as the owner’s representative and uniformly managing land. Hence, in Vietnam, the land users will have the land use right without the private ownership of the land. Land law 2013 does not allow foreigner to have land use rights in Vietnam. It only allows foreign invested enterprises to be permitted to use land through the form of land allocation or lease.

Although foreigner do not have land use rights in Vietnam, they are allowed to own houses in Vietnam under the Law on Housing. In addition, the Law on Real Estate Business has certain limitations for foreign investors to conduct real estate business in Vietnam and must meet the legal requirements.

Foreign investors investing in Vietnam wish to use the land to conduct business activities, or intend to conduct real estate business in Vietnam, or simply a foreigner wishing to purchase and own real estate in Vietnam should be aware of the legal provisions on conditions of implementation, orders and procedures to of the transactions to minimize risks. The assistance of the lawyers on real estate in Vietnam shall be worthwhile.

Real estate lawyers in Vietnam would have in-depth knowledge of the Land Law, Law on Housing, Law on Real Estate Business and related regulations. In addition, they would have practical experience in implementing legal procedures, handling disputes, and supporting real estate transactions in Vietnam. The real estate lawyers could explain the restrictions on land use rights of foreign organizations and individuals in Vietnam and the conditions for conducting business in real estate in Vietnam. The lawyers at request could assist the foreigners with the process and procedures to work with state agencies to obtain land use rights for enterprise and home ownership rights for individual more effectively.

When conducting transactions related to real estate such as buying, selling, transferring, renting, leasing, real estate lawyers could also provide assistance in in legal due diligence of the real estate to minimize legal risk to clients. It is important to evaluate the legal status of the property, the owner of property, whether property is in dispute, or subject to additional requirements of government before being sold by the developer and the people eligible for entering into the transaction. In addition, the lawyers in Vietnam can advise clients to draft or review the agreements, sales contract as well as the process to legalize the process to comply with the law in Vietnam.

Da Nang Calls for Investment in 60 Projects in 2019

After the Lunar New Year, Da Nang began to implement the investment promotion of 60 investment projects, focusing mainly on high-tech, urban and tourist areas real estate, attracting foreign investors to come and invest in Danang.

Da Nang City People’s Committee has just approved the program to attract investment in 2019. Accordingly, after the Lunar New Year, the city began to attract investment in 44 projects with the capital from 30,000 USD to 400 million USD, mainly in the fields of high technology and real estate in urban areas and resorts; and at the same time promoting new investment negotiations for 16 other projects. Among the 44 projects calling for investment, half of them are in information technology and high technology, mainly locating in Da Nang High-Tech Park and the Information Technology Zone. In particular, the city wants to call for investment in a solar power plant with a capital of 150 million USD to 400 million USD and production of semiconductor materials to manufacture specialized circuits and specialized electronic components with a total investment of 200 million USD. In addition, the city will conduct negotiations to promote projects that have been delayed without being able to grant investment licenses for various reasons such as the 52ha wide Software Park project.

According to the program, the city will prioritize attracting FDI capital into industries that seek to advance the industrial revolution 4.0 such as digital, nano-technology, bio-industry, new materials… and the agricultural sector also attracts projects with high technology application, rejecting projects with outdated technology and destroying the environment. Therefore, the city has a policy of focusing on approaching and inviting multinational investors, mainly from Japan, Korea, USA, Australia and Europe.

ANT Consulting assists clients with Market Entry, Legal Advice, Tax Advice and Outsourcing Services in Vietnam.

We are located in Hanoi, Da Nang and Ho Chi Minh City.

Talk to our consultants at +84 28 730 86 529 or email us ant@antconsult.vn

Why Asian Investors Prefer Vietnam Real Estate Market?

Profitability of high-end real estate in Vietnam surpasses that of ASEAN countries.

According to Mr Pham Lam, General Director of DKRA Vietnam, in the past 3 – 5 years, Asian investors from Korea, Hong Kong, Japan, Malaysia and China have been active in the Vietnam real estate market. They prefer golden land funds, specializing in high-end and luxury real estate development.

Also according to leaders of DKRA Vietnam, the investment wave of Asian investors will increase in the next few years. The expert also outlines the 7 causes of the trend that Asian investors hunting for golden land to develop high-end real estate projects.

Firstly, Vietnam is a developing real estate market. In emerging markets, there are more investment opportunities than markets that have grown too long (saturation of opportunity). Real estate in many Asian countries are too expensive and the investment at the present time is not attractive in the native country has urged Asian investors poured capital into Vietnam market.

Secondly, Vietnam is a country with political stability, which is considered as the most important factor that is of international concern before entering a new market. The stable political background brings safety for investment yields in the context of global geopolitical fluctuation is increasingly unpredictable.

Third, high-end and luxury real estate in Vietnam, especially Ho Chi Minh City (HCMC), is more profitable than ASEAN countries. According to a recent report of some surveyors in the country, high-end real estate in districts 1 and 3 of HCMC have a profitability ratio of more than 4%. In District 2, especially Thao Dien, An Phu and Thu Thiem areas, luxury apartments achieved a profitability rate of 5 – 6.5%.

Meanwhile, the profitability rate of investment in luxury apartments in ASEAN is fluctuating in the range of 3.7 to 5.2% and in Asia, it also has the same threshold. Therefore, luxury real estate in HCMC is considered quite competitive while the price is lower.

Fourth, Vietnam has Asian culture in accordance with the culture of other countries in the area. The similarity or proximity in culture is a very effective bridge in the process of investment promotion, investment cooperation, helping the Asian real estate owners easily access and penetrate the real estate market in Vietnam.

Fifth, Vietnam has a young population and is experiencing a spurt in income, so the demand for housing has increased sharply. The middle class, even the rich and the super-rich, are among the fastest growing groups in the world. This is a remarkable advantage of Vietnam.

With the flagship product of Asian investors, which is high-end real estate, they target rich consumers who are willing to pay for high-value assets with outstanding quality to assert their position.

Sixth, interest rates in the developed real estate markets in the Asia is very low. Interest rate in Japan is 1%, Singapore is 3%, Korea is below 2% and other regions such as Taiwan, Hong Kong is also at a modest level compared to Vietnam. This is the factor attracting the attention of investment funds and major real estate companies in Asia coming to Vietnam. In addition to developing projects with committed profit margin, they also carry out loan deals with better interest rates than in their hometowns.

Seventh, due to the same region, the moving distance between Vietnam and their home country of Asian investors is considered to be faster, more convenient than other continents. Close geography distance helps Asian investors have more opportunities to monitor, check the new market and make important decisions in time, making the most effective investment.

ANT Consulting assists clients with Market Entry, Legal Advice, Tax Advice and Outsourcing Services in Vietnam.

We are located in Hanoi, Da Nang and Ho Chi Minh City.

Talk to our consultants at +84 28 730 86 529 or email us ant@antconsult.vn

Vietnam Real Estate Sector Review

Real estate is one of the sector with important position and role for the national economy, have a direct relationship with the financial and monetary market, the construction market, building materials market and the labor market… The sustainable development and effective management of this sector will contribute significantly to promoting economic-social development, creating the ability to attract investment capital, contributing to the development, industrialization and modernization of the country.

There have been more favorable developments for the country’s economy in 2015 and 2015. The prices of oil continued to fall; GDP grows at stable rate around 6%. The inflation rate was controlled at 4.09% average; reduced deposit rates, lending rates were adjusted down to 10%. Foreign direct investment in Vietnam reached US $ 20.23 billion, exceeding 19% compared to the target (17 billion dollars) and expected in increase in 2016.

Mr. Nguyen Tran Nam, Former Deputy Minister of Construction, president of the Vietnam Real Estate Association, said the real estate market has been recovering, particularly in 2015. There were 40,000 successful transactions, increased 75% compared to 2014 in only Hanoi and HCM. In addition, the Vietnamese laws have changed which allow foreigners and Vietnamese people living abroad to own real estate in Vietnam from January 7/2015. The metro construction projects in Hanoi and HCMC, modern road system construction suchas Nhat Tan Bridge, Long Thanh – DauGiay highway … are also factors contributing to boost the real estate market.

Along with these positive factors, the volatility of the financial markets due to the impact of political issues and global movement (the gold market, securities, forex have reduce the lending rate) has turned the property into a safe place for investment at the moment.

In the current favorable environment, the property becomesa channel to attract investors who want to own property not to live but to invest in. This is an appropriate time for investment after nearly 7 years. In a report, Mr. Marc Townsend, Managing Director of CBRE Vietnam, saidthat ” in 2015 the real estate market will witness the spectacular comeback of property speculators”

According this report, if in 2014, cheap apartment was considered as the hottest segment of the market, in 2015, the segment of medium and high-end apartments returned to be the hottest attraction. According to data from CBRE, yielding from investing in luxury apartments in Vietnam is quite high compared to other countries in the region (7- 8% compared to 3% in Singapore, 4-6% Bangkok and 4% in Hong Kong). With a minimum profit margin of 7-8% a year and the highest one at 15-20%, this segment is attracting the attention of real estate speculators.

The project with big scale which delayed during freezing period such as Goldmark City, Sapphire Palace, Gemek Tower in Hanoi, Vista Verde, the Park Residence, Le Meridien, City Gate Towers, has been released to sell up.

As reported by CBRE, in the quarter 4/2014, in HCM, it was recorded that 6670 apartments were offered, increased 117.8% from the previous quarter and 150.2% over the same period last year. For the whole 2014, it was sated that 60% of 14 807 apartments from 37 projects were offered while this figure was 47% in Hanoi of total 16,200 units from 31 projects.

In terms of price, the projects inside the city and surrounding areas with developed infrastructure continue to attract buyers and tends to keep the price high. The average selling price luxury apartments in Hanoi and Ho Chi Minh City are in the range of US $ 1500-1700 / m2, apartment Range US $ 1,000 / m2, the budget – US $ 700 / m2.

The companies with foreign investors are allowed to sublet the property which has been leased or acquire buildings which has been built. This contributes to dynamic of office properties in Vietnam. According to CBRE’s report, in 2014, many office buildings have adopted methods of long-term lease or buy off the area. In 2015, this trend will be more popular in terms of office building.

In the segment of real estate retail, restructuring the dynamics of retail businesses such as Parkson Hanoi Co. and the close of Parkson shopping center in Keangnam Landmark Tower Complex (Hanoi) showed very strong pressure this segment due to increase in supply and competition. With more than 90 million people, Vietnam is a leading nations in the Asia – Pacific region in terms of growth of retail market (9.3% versus 6.3% in Hong Kong, 4.5 1.7% of Malaysia and Singapore). Thus, the segment of retail market is still promising.

A series of big brand to expand the retail network such as as Aeon Group (Japan) plans to open 20 hypermarkets in Vietnam. Vinmart plans to build 9 shopping center, 100 supermarkets and 1,000 Vinmart convenience stores in 2017. Lotte Group (Korea) announced that it would open 60 supermarkets in Vietnam in 2020…

However, in 2015, the new game will be very intensed. According to the CBRE, in 2015-2016, the market will welcome nearly 800.000m2 retail space from 24 projects. Therefore, retailer market will be faced a new challenges. Rising operating costs, the development of electronic commerce and improved knowledge of consumer in purchase decision will be the factors that led to high level of market competition.

Also in 2015-2016, villa projects seem to become very attractive investment in Vietnam. In 2016, Vingroup will launch the resort in Da Nang, Nha Trang, Quy Nhon, PhuQuoc that combines financial investment to attract investors. Especially, at the beginning of March, the Group will launch VingroupVinpearl Resort & Villas project in Long Beach – Nha Trang.

ANT Consulting assists clients with Market Entry, Legal Advice, Tax Advice and Outsourcing Services in Vietnam.

We are located in Hanoi, Da Nang and Ho Chi Minh City.

Talk to our consultants at +84 28 730 86 529 or email us ant@antconsult.vn

Vietnam Real Estate Attracts Singapore Investors

Investment flows from Singapore to Vietnam real estate sector are increasing with the presence of many huge investors.

According to the Consulate General of Republic of Singapore in Ho Chi Minh City (HCMC), Vietnam is one of the leading markets for investment of Singapore businesses. Currently, Singapore’s real estate businesses are operating successfully in Vietnam. A typical case is the 7 Vietnam – Singapore Industrial Parks (VSIP) that has attracted more than 8 billion USD of investment capital and creating jobs for more than 155,000 workers.

According to Director of Department of International Business Development of Singapore, many multinational enterprises that headquartered in Singapore are also very interested in the real estate market of Vietnam. One example is the Kusto Home Company based in Singapore, which is developing and managing the Diamond Island project in HCMC.

According to President of Kusto Home, they have studied Vietnam real estate market since 2005 and found that Vietnam is a potential and dynamic market, especially the housing segment.

There are many Singapore real estate investors that have operated in Vietnam market for a long time and have been quite successful such as Keppel Land, Mapletree, Sembcorp, CapitaLand…

In particular, Keppel Land is one of Singapore’s real estate investor that has been presented in Vietnam very early and became one of the largest investors in the real estate market of Vietnam.

In Vietnam, Keppel Land has a diversified investment portfolio in Hanoi, HCMC, Dong Nai and Vung Tau with 19 licensed projects, including the grade A office buildings, premium residential projectsnd, modern urban area complex serviced apartments.

According to CEO of Keppel Land, Vietnam with rapid growth rate is one of the key markets of Keppel Land at the present and in the future.

If Keppel Land invests in many market segments in Vietnam, CapitaLand is now regarded as the leading investors in the segment of housing development. Presented in Vietnam since the 90s of the last century, CapitaLand is developing projects in 6 major cities of Vietnam as Hanoi, HCMC, Hai Phong, Da Nang, Nha Trang and Binh Duong. So far, CapitaLand has provided for the housing market of HCMC and Hanoi of about 7,850 quality apartments, with 8 housing projects.

According to General Director of CapitaLand, Vietnam is one of CapitaLand’s key markets in Asia. According to forecasts, in the coming time, Singapore still continues to invest heavily in the Vietnam market.

According to the latest report of the Foreign Investment Department (Ministry of Planning and Investment), by the end of June 2016, investment capital in real estate sector accounted for more than 30% of the total foreign direct investment (FDI) of the ASEAN region to Vietnam, with 97 projects. In particular, Singapore accounted for nearly 80% of the number of projects and 60% of total investment capital in this field. The projects of Singapore investors belong to many segments from residential, office, retail space to the real estate for tourism, resort.

According to Chairman of the Singapore Real Estate Brokerage Association, among Singapore’s 10 large enterprises that are investing in Vietnam, there are up to 5 businesses invest in the real estate sector.

In addition to traditional investors that are actively expanding their operations in Vietnam market, many new investors are pouring capital into this country.

SynGience Financial Group from Singapore, Lucky Land Company and Minh Nguyen Long Company have signed contract to invest 400 billion VND in Depot Metro Tham Luong project with the scale of 660 apartments, next to the Tham Luong line stop of the subway no. 2 (Ben Thanh – Tham Luong).

Most recently, Ibeworth Pte. Ltd., – a subsidiary with 100% capital of Keppel Land and Nam Long Investment Joint Stock Company have signed contract to register to buy convertible bonds of Nam Long with a total value of 500 billion VND.

ANT Consulting assists clients with Market Entry, Legal Advice, Tax Advice and Outsourcing Services in Vietnam.

We are located in Hanoi, Da Nang and Ho Chi Minh City.

Talk to our consultants at +84 28 730 86 529 or email us ant@antconsult.vn

How Vietnam Real Estate Sector Performed in 2015?

Invest in real estate in Vietnam

The the real estate industry in 2015 have beee influenced by foreign investors and easier access to credit source.

With the credit easing policies, foreigners are allowed to buy houses in Vietnam and the infrastructure development has been the driving force for the recovery of the real estate market in 2015. The real estate industry outlook in 2015 will come from foreign investors and the easier access to credit source. Then, the B and C class apartment segment with prices ranging from 50,000 USD/apartments with full infrastructure, near the metro will attract attention in 2015.

Credit easing policy and interest rates on deposits and loans are at their lowest in 3 years; therefore, this is a good time to invest. Moreover, changes in Circular 36 will help reducing the risk factors for real estate loans, thereby creating more room for credit loan and lending rates are at their lowest in 3 years will encourage real estate businesses continue to develop projects to serve the increasing demand. It is expected that low interest rates will make the cash flow moving into other investment channels such as real estate.

Foreigners now can own houses are also the catalyst for the real estate market in 2015. Currently with nearly 80,000 foreigners are working in Vietnam, the home owning is expected to be a catalyst for the real estate market to become more active in 2015.

In addition, the lending conditions for the 30,000 billion VND lending package will be simplified, thereby helping to speed up the disbursement of this package in 2015.

The year 2015 witnesses the return of speculators, private investors in the real estate market. Mainly the apartments in segment A and B are their targets when the price of those segment decreased by 20 -25% compared with the peak of the market.

Besides, the development of infrastructure is also the motivation for the growth of the real estate market. With the expectation that in 2015 the Government will maintain the spending of over 3 billion USD for infrastructure, construction and expansion of roads, railways, power grids…, that will actively support the development of real estate market. The most obvious evidence is the construction of Metro no.1 in 2014 has attracted more real estate projects on the path of the Metro line.

Some notably infrastructure projects in 2015:

+ Complete Nhat Tan Bridge: The Ring Road 2 connect with the Nhat Tan Bridge will help reducing the travel time around Hanoi as well as connecting to Noi Bai International Airport. This will be a positive landmark for real estate projects in the northwest corridor of the capital.

+ Complete the Hanoi – Hai Phong highway: The 106 km long highway linking Hanoi and Hai Phong – the largest port city in Northern of Vietnam will help real estate projects in Long Bien and Gia Lam becomes more vibrant.

+ Complete the Ho Chi Minh City (HCMC) – Dau Giay highway and continue building the Ring Road 2 in HCMC will help the real estate projects in the Eastern of the city (District 2, 9, Thu Duc) becomes more attractive.

+ Construction of Ben Luc – Long Thanh highway: This is a part of Ring Road 3 that will connect Long An to Long Thanh International Airport in the future without having to go through the central districts of HCMC. The project is expected to help improving the real estate market in the Southern of HCMC.

ANT Consulting assists clients with Market Entry, Legal Advice, Tax Advice and Outsourcing Services in Vietnam.

We are located in Hanoi, Da Nang and Ho Chi Minh City.

Talk to our consultants at +84 28 730 86 529 or email us ant@antconsult.vn

Czech Republic Wants to Promote Investment Cooperation with Vietnam

Invest in real estate in Vietnam

The traditional friendship and multifaceted cooperation between Vietnam and the Czech Republic have been constantly being promoted and promoted by the two countries’ people. Today Vietnam is still a familiar destination for Czech businesses to set up business in Vietnam.

At the Czech-Vietnamese Business Conference recently held in Hanoi, Deputy Minister of Industry and Trade of the Czech Republic – Mr Vladimir Bartl said that Vietnam is increasingly attracting investment from abroad, including the Czech Republic. The Czech Republic wishes to promote cooperation and investment between the two countries’ businesses in the areas such as environmental protection, mining technology, construction technology, chemicals, telecommunications, radar, industrial machinery and agriculture, especially biotechnology and nanotechnology.

On the Vietnamese side, the Vice President of the Vietnam Chamber of Commerce and Industry (VCCI) said that the economic and trade development between the two countries is based on three main features.

First, in terms of bilateral relations, trade exchange between the two countries have a stable growth and strong development. The potential investment cooperation areas between the Czech Republic and Vietnam are agricultural products, textiles, machinery and equipment, hospital medical equipment, energy and information technology.

Second is multilateral relations, Vietnam is now an important gateway to trade in ASEAN, the market with over 600 million people. The Czech businesses will have to prepare investment plans, not only with the Vietnam market with more than 90 million consumers but also to deepen access to the ASEAN market.

Meanwhile, the Czech Republic is the gateway for goods to enter the European Union (EU). Especially when the EU – Vietnam Free Trade Agreement (EVFTA) comes into effect, it will facilitate Vietnamese products entering the European market.

Finally, the cooperation between Vietnam and the Czech Republic is always given priority by the business community and the two Governments. The sixth session of the Intergovernmental Committee of Vietnam – Czech Republic is taking place in Hanoi, with the presence of many businesses of the two countries, especially the presence of Mr Vladimir Bartl has demonstrated this special relationship.

ANT Consulting assists clients with Market Entry, Legal Advice, Tax Advice and Outsourcing Services in Vietnam.

We are located in Hanoi, Da Nang and Ho Chi Minh City.

Talk to our consultants at +84 28 730 86 529 or email us ant@antconsult.vn

Highlights in Real Estate Investment in Vietnam

Real Estate intelligence in Vietnam

Vietnam is attracting interest of investors in both domestic and foreign market. Overall, investor confidence was returning to the Vietnam real estate market. Both buyers and sellers have enhanced activity in recent months.

The real estate market of Vietnam has overcome the recession period within 4 or 5 years ago but in the last 12 months, the market has recovered and noted positive signs as well as confidence in the market in general.

Law on housing and real estate business Law takes effect in July 2015 and has acted quickly and positively on the real estate market in Vietnam. The changes in the Law on housing have significantly eased the regulations on home ownership for foreigners, although there are still some limitations.

“Hot spots” of FDI inflows

According to a recent report of Jones Lang LaSalle Vietnam (JLL), a series of free trade agreements such as TPP, EU and ASEAN will further promote the medium and long term development. Interest rates and inflation rate have declined significantly and became more stable in the past two years, helping the investment activity to occur more positive in both Ho Chi Minh City and Hanoi. With some domestic and foreign investors such as CapitaLand and Keppel Land, they have spurred the construction activities thanks to the growing revenue in the last 12 months.

Accordingly, the amount of disbursed FDI in the period from January to September of 2015 rose by 8.4% compared to the same period last year, reaching 9.7 billion USD. This is the strongest growth since the late 1980s, contrary to the slowdown of the Chinese economy. The amount of registered capital of new investors also rose even more sharply with 11 billion USD, focused primarily on the manufacturing industry, in which the energy and electronics industries are the sectors with the highest registered capital investment in the year, followed by the real estate sector.

According to the Ministry of Planning and Investment, FDI investment in the industrial park in Vietnam accounted for 67% of total FDI in Vietnam with 11 billion USD and accounting for 59% of the total 1,400 projects in the first 9 months of 2015. A notable transaction is the event that Amata Corporation acquired the land worth 279 million USD in Long Thanh (Dong Nai) for the purpose of building residential and industrial areas valued of 500 million USD.

According to JLL, the residential real estate prices in Vietnam maintained an average rate with 2 bedroom apartments, 70 m2, 10 – 15 minutes to reach the central area of Ho Chi Minh City, which are sold at the price of 1,600 – 2,000 USD/m2, equivalent to 112,000 – 140,000 USD/apartment. When compared with the big cities in the region, the price is believed to increase significantly.

Who dominated the real estate market of Vietnam?

JLL’s report showed that domestic investors are boosting investment activity in the real estate market of Vietnam. The largest real estate investors in Vietnam are Vingroup and Novaland Group.

Vingroup is Vietnam’s largest real estate development and management with market capitalization of about 3.4 billion USD. Vingroup’s investment portfolio includes 45 real estate projects spread across many sectors of the real estate market, including Vinhomes luxury apartments and villas; Vincom Center and Vincom Mega Mall; Vincom Office; 5 star Vinpearl resort; Vinpearl Luxury resort….

Novaland Group has participated in the real estate market in 2007 with the first project is Sunrise City with investment capital of 500 million USD located on Nguyen Huu Tho road, district 7. The real estate business of Novaland focused on the apartment complex segment from mid to high classes and the segment of house land with 25 projects that are being implemented throughout the downtown districts.

Vietnam is becoming an attractive place for foreign investment in the medium term than many other countries in Southeast Asia. Data from Real Capital Analytics (RCA) recorded that there are more attention from a number of private investment funds that are allocated foreign capital into Vietnam in an attempt to increase their market presence in Vietnam.

In the 2nd quarter of 2015, a joint venture of Warburg Pincus – a US investment fund, has invested 100 million USD into Vincom Retail, the Vietnam’s largest trade center ownership and management in Vietnam. Also in this quarter, Gaw Capital Partners has received the transfer of 4 real estate projects under various segments from Indochina Land with a total value of 106 million USD. Gamuda Land has also receive the transfer of 40% shares (equivalent to 64.1 million USD) in the Celadon City project, a modern urban area with initial investment by a joint venture between Sacomreal, Thanh Thanh Cong (TTC) and An Phu Gia.

The current real estate profit margin is high

JLL’s analysis shows that investors are now enjoying 6 – 7% profitability rate for residential real estate and 9 – 11% for commercial real estate, depending on location, completion time, quality of the project and the signing time of the tenants.

According to General Director of JLL Vietnam, real estate investment in emerging markets has always been seen as risky investments but with higher potential profits. Investors are willing to engage in joint venture projects in these markets, where they will combine with local investors who wish to have capital supporting – in order to have a foothold in the market before and also experience the exponential growth in the future when the economy of these market growing fast.

Moreover, the emerging markets such as Vietnam will have the potential growth factors, including population growth and high urbanization rate. Investors and project developers can take advantage of these factors.

ANT Consulting assists clients with Market Entry, Legal Advice, Tax Advice and Outsourcing Services in Vietnam.

We are located in Hanoi, Da Nang and Ho Chi Minh City.

Talk to our consultants at +84 28 730 86 529 or email us ant@antconsult.vn

Vietnam’s Tourism Real Estate Sector

Real Estate intelligence in Vietnam

According to forecasts, in the next 5-10 years, Vietnam will remain as an attractive destination for foreign investors. In which the tourism real estate sector is preparing to welcome a new wave of investments with large-scale projects.

A report of Capital Partners Group Vietnam shows that in the next 5-10 years, GDP per capita of Hanoi and Ho Chi Minh City will be equivalent to those of some large cities in Southeast Asia. Therefore, beachfront apartments will become the new growth segments.

Mr. Kenneth Atkinson, CEO of Grant Thornton Consulting Group Vietnam claiming that the living standard of people in general are more advanced, the demand for tourism is growing and a lot of foreign investors are heading their attention to resort projects. The demand for hotels, luxury resorts in the long term are remains high, therefore the number of projects in the hotel and resort sectors will continue to increase with more luxury resorts to meet diverse customer demand.

Recently, many localities have also implemented plan and urged local and foreign investors to invest in tourism real estate projects.

For example, recently, Quang Ninh is calling for investors to set-up business and invest in Vietnam for the period from now till 2020, including projects: coastal resorts, tourism, casino…There are some huge projects: Casino and entertainment complex with scale up to 2,000 hectares in Van Don with a total investment of 4-5 billion USD, Phoenix resort projects (Van Don) 250 million USD; Dam Nha Mac Service Industrial Park with 3,170 hectares and 530 million USD…

In Binh Dinh province, Vingroup has built the Hai Giang tourism project, with a total of more than 650 hectares, a total investment of nearly 3,500 billion VND. In 2015, it is expected that Vingroup can supply over 830 seaside villas to the market from three locations: Phu Quoc, Nha Trang and Da Nang.

FLC Group is also preparing to launch the complex project of golf course, resort, villas and high-end entertainment named FLC Nhon Ly in Nhon Ly Commune, Quy Nhon city. The project has a total investment of 3.500 billion VND.

Most recently, M.I.K Company has introduced the Sol House luxury resort project in Phu Quoc. The project is expected to be launched in early 2016, with a total investment of over 40 million USD, including 260 hotel rooms and villas, spa, indoor and outdoor entertainment areas, two restaurants, beach bar…

Mr. Than Thanh Vu, Deputy Chairman of Tourism Real Estate Association also said that recent moves of the Government on reducing the administrative procedures will provide ventilation for the real estate business, real estate market in general and tourism real estate in particular. In the next phase, tourism real estate sector will have a rapid growth.

Furthermore, Mr. Nguyen Nam Son, Executive Director of Capital Partners Vietnam said that: “If in the future, Vietnam can minimize the troublesome administrative procedures, increase Government budget on promoting tourism of Vietnam on international channels, travel trade fairs, open representative offices in foreign countries…, that will help Vietnam tourism industry and tourism real estate sector to grow fast”.

“Because investors are lack of information about the policy, project planning therefore they do not know where to invest in, which specific projects, for how long… so the local governments should organize more meetings, dialogues for domestic and foreign investors to exchange with each other and discuss with the leaders of the provinces and thereby make the appropriate investment decisions, “said Mr. Jonathan Tizzard, Department of hotel and resort, Cushman & Wakefield Vietnam.

According to Mr. Jonathan, the coastal localities like Nha Trang, Da Nang, Hai Phong, Binh Thuan, Ninh Thuan will become the most attractive destination in the next 5 years. In particular, the island of Phu Quoc (Kien Giang) has great potential to become a “hot” destination. Phu Quoc is not soon becoming an attractive casino center and tourism in Southeast Asia if the open policy of Government that enterprises can invest in resorts include casino soon to be widely implemented.

ANT Consulting assists clients with Market Entry, Legal Advice, Tax Advice and Outsourcing Services in Vietnam.

We are located in Hanoi, Da Nang and Ho Chi Minh City.

Talk to our consultants at +84 28 3520 2779 or email us ant@antconsult.vn

Resort Real Estate Segment Flourishes with New Projects

Real Estate business consultant in Vietnam

2016 is identified as a good year for the resort real estate segment with a series of new launching projects to attract the attention of both investors and consumers. In particular, the real estate projects located in the sea area are attractive to consumers who want to own a second home to serve the needs of pleasure. From the end of 2015, there were many resort real estate projects that are introduced to the market.

According to statistics, the sales volume of apartment and villa are very good, with 70-80% of the launched units were ordered. The amount of people interested in the projects and decide to buy is increasing, thanks to the incentive sales policy, profit commitments from investors, support for preferential interest loans from the cooperative banks with the investor and can use the house for free for a certain period.

Many wealthy families share that they would like to own a coastal apartment or villa because the demand for resort tourism is increasing sharply. Moreover, foreign investors see that resort real estate segment in Vietnam is rich in potential with many famous tourist resorts and long beautiful beaches. The loosening policy allows foreigners to buy and own real estate in Vietnam is also a positive move to promote the demand of many investors jumping into this playground although there are still many difficulties in policy implementation

Currently, many domestic enterprises began to invest into the resort real estate segment, which is an inevitable trend of the market. For about 10 recent years, resort real estate has been formed and attracted the attention of investors. Some domestic investors have experienced successfully in other segments also expanded into this segment. Most of the projects are in the luxury and high-end segments such as beach villa. On the other hand, according to experts, if we can build resort real estate products at a reasonable price, the liquidity will be very good.

Vietnam has the potential for tourism therefore resort real estate is a good investment channel. Investing in an area with great potential for tourism and large amount of passenger traffic would have faster payback than the places that tourism does not develop. At the present, Vietnam has a lot of large investors as Vingroup and Sungroup… are capable to invest in large-scale resort projects. At the same time, the market is also attracting a lot of foreign investors with good financial capability and ability to invest quickly.

Currently the coastal cities like Da Nang, Nha Trang and Phu Quoc are 3 hotspots in attracting capital investments in resort real estate segment. In terms of location, these coastal cities have the potential to attract investors the most because they are also the famous tourist destination that attracting millions of tourists each year.

2016 is the year of resort real estate segment. The projects in this segment stretch from the sea to the mountain and Sapa is a typical example. Many large investors as Vingroup or Sun Group have been implementing major investment projects here.

Only in 2015, Sa Pa tourism has welcomed nearly 2 million passengers, increased by 42.2% compared with 2014. Currently, the number of tourists visiting Sapa is large and has always had a tendency to increase. While the demand for luxury resort services continues to rise, the supply is limited. Hence, this is a good opportunity to develop the resort real estate segment in this dreamy mountain city.

Resort real estate has opportunity to develop rapidly thanks to the development in transport infrastructure such as airport, highway and cable car system… allowing the movement of tourists to be convenient and easy.

ANT Consulting assists clients with Market Entry, Legal Advice, Tax Advice and Outsourcing Services in Vietnam.

We are located in Hanoi, Da Nang and Ho Chi Minh City.

Talk to our consultants at +84 28 3520 2779 or email us ant@antconsult.vn

Vietnam Real Estate Ranks Second in Attracting FDI

Real Estate regulatory in Vietnam

In the first quarter of 2017, the real estate sector continued to grow steadily as it continued to rank second in attracting foreign direct investment (FDI) and the number of newly established businesses continued to increase. Those are good signs showing that foreign investors prefer to invest and set up company in Vietnam.

According to the Vietnam National Real Estate Association (VNREA), in a total of 7.71 billion USD registered FDI in the first quarter of 2017, the real estate business sector attracted 0.34 billion USD, accounting for 4.5% of total registered capital and ranked second after processing and manufacturing industries in attracting FDI.

The most remarkable project in the field of real estate in the first quarter was the Vietnam – Singapore Industrial Park III project, which is invested in Hoi Nghia commune (Tan Uyen town) and Tan Lap commune (Bac Tan Uyen district), Binh Duong province, on an area of 1,000 hectares with investment capital of 284.7 million USD, invested by Vietnam – Singapore Industrial Park Joint Venture Limited Company (VSIP).

The first quarter, also recorded 924 real estate businesses were newly established, increasing 55% in number of enterprises and 34% in capital.

According to real estate professionals, in the second quarter, the resort real estate market will continue to grow strongly, attracting the attention of both foreign and domestic investors thanks to the great tourism potential of Vietnam.

Regarding capital for real estate development, it is forecasted that FDI capital will still accounts for a high proportion, domestic capital is the main source of capital. Capital in the people and remittances will be mobilized more, especially investment in the tourism and resort sectors.

Real estate transactions are expected to increase as some large projects with thousands of units are soon to be offered for sale. However, investors are advised to be cautious in selecting projects with good incentives and professional operators to invest.

ANT Consulting assists clients with Market Entry, Legal Advice, Tax Advice and Outsourcing Services in Vietnam.

We are located in Hanoi, Da Nang and Ho Chi Minh City.

Talk to our consultants at +84 28 3520 2779 or email us ant@antconsult.vn

CIPY Starts Construction 5.7 Million USD Factory in Phu Yen

Set-up factory in Vietnam

Presently, more and more foreign investors choose to set up company in Vietnam and Coilcraft Corporation is not the exception. This is the first electronic components factory to be built in Phu Yen with capacity of 500 million pieces/year with the main products are RF chip inductors and electromagnets.

On May 13th, CCIPY Vietnam Co., Ltd (under Coilcraft Corporation, USA) has started the construction of an electronic component factory in An Phu Industrial Zone in Tuy Hoa city, Phu Yen province with the attendance of Phu Yen province’s leaders.

According to the General Director of CCIPY Vietnam Co., Ltd, the total investment for the factory is more than 5.7 million USD and 100% of the products will be exported. The establishment of this factory in Phu Yen province is part of Coilcraft Corporation’s goal to develop production in Asia.

When it comes into operation, the project will introduce and share new technology secrets, create jobs for about 2,000 workers and contribute to increase local export and import turnover.

The project is expected to be completed and put into operation in January 2018.

In order for the project to be soon completed and put into production on schedule, the Economic Zone Authority will coordinate with relevant departments, sectors and localities to continue to create the most favorable conditions for investors to complete the factory construction plan as scheduled.

On the side of the investor, the Management Board suggested that CCIPY Vietnam Co., Ltd must ensure safety, efficiency, put the factory into production and business on time, promoting the socio-economic efficiency of the project…

ANT Consulting assists clients with Market Entry, Legal Advice, Tax Advice and Outsourcing Services in Vietnam.

We are located in Hanoi, Da Nang and Ho Chi Minh City.

Talk to our consultants at +84 28 3520 2779 or email us ant@antconsult.vn

Hong Kong Investors Explore Vietnam Infrastructure Projects

Real Estate regulatory in Vietnam

Hong Kong investors are promoting investment in southern provinces in the areas such as infrastructure investment, waste water treatment, waste and also learn about set up company in Vietnam.

Recently, about 40 Hong Kong investors and experts in investment and infrastructure development sectors have visited Ho Chi Minh City. Sharing the purpose of this business trip, Mr Vincent HS Lo – Chairman of the Hong Kong Trade Development Council said that these investors are people who have a lot of experiences in the financial, consulting, architecture, energy, water and waste treatment, engineering and construction, law and accounting, transportation sectors…

Also according to Mr Vincent HS Lo, investors and businesses in Hong Kong are very interested in Vietnam infrastructure projects, especially the system of railway, road, airport and seaport.

Previously, during meetings with representatives of the Ministry of Transport in Hanoi, representatives of Hong Kong investors and businesses also expressed their interest in the North-South Expressway Project with a length of more than 1,300 km. A Hong Kong representative said that this project would help develop the strengths of a gateway to attract investment in large projects.

According to Hong Kong businesses, in addition to transport infrastructure, they are also interested in large-scale real estate projects in Vietnam. Mr Johnson Choi, Managing Director of Sunwah Group said that the company had many large investment projects in Vietnam, notably real estate projects. According to Mr Choi, among countries in Asia, Vietnam is considered as a potential country for real estate. Therefore, not only investing in projects in HCMC, Hong Kong businesses also pay attention to projects in Hanoi and the Central region.

According to the Ministry of Planning and Investment, as of the end of the first quarter of 2017, Hong Kong is the sixth largest investor in Vietnam with more than 1,200 projects and a total registered capital of more than 17.57 billion USD.

Hong Kong’s licensed projects in Vietnam are quickly implemented. For example, the project of Worldon Vietnam Co., Ltd in Dong Nam Industrial Zone (HCMC), after being licensed to increase capital by 140 million USD in 2016, has nearly completed the Fashion Design and Production Center for high quality knitwear.

Or project of Nam Phuong Textile Joint Venture Co., Ltd., with registered capital of 120 million USD in Viet Huong 2 Industrial Zone (Binh Duong), has made new moves in the project implementation after starting work at the end of 2014. The project is constructed on an area of 12 hectares, operating in the field of weaving fabric, phase I has capacity of 36 million meters of cloth per year, mainly for export…

In 2016, Vietnam is Hong Kong’s largest export market in ASEAN with a total export turnover of 9.25 billion USD. In addition, Vietnam is Hong Kong’s third largest trading partner in the ASEAN region with a total bilateral trade reached 16.2 billion USD.

ANT Consulting assists clients with Market Entry, Legal Advice, Tax Advice and Outsourcing Services in Vietnam.

We are located in Hanoi, Da Nang and Ho Chi Minh City.

Talk to our consultants at +84 28 3520 2779 or email us ant@antconsult.vn

Invest in Real Estate of Vietnam in 2016?

The real estate market in 2016 will continue to recover. Vietnam real estate sector had signs of recovery in late of 2013 and lasted until 2015. Up to now, there were not any signs showed that development flow will be slowed in 2016.

In general, as recorded, real estate price is increasing and the actual increase amplitude ranging from 5 – 15%, certainly not with every market segment and every project. According to experts, the price increasing is also consistent with the rule that the market is starting to come up from the bottom but not yet peaked.

If we look at the profit of the real estate businesses in 2014, businesses that operated efficiently in 2014 have achieved profit in the range of 5 – 15%. In 2015, the number has increased to 15 – 20%. However, a common project construction time is about 3 – 4 years so the profit margin is not too high. Compared with the period of the real estate bubble, this is still sustainable growth rate.

Also in 2016, the property was evaluated as a safe investment channel and promising to create added value. If the national economy continues to grow, along with a series of extensive integration opportunities that we are, can hope 2016 will form the opportunity to create added value for real estate Vietnam.

The important thing is the final price when reaching home buyers is still in the acceptable range. According to the real estate consultants, if buyer has financial capability, they should buy or invest in real estate right now because the price in the next year is likely to rise.

In 2016, real estate is evaluated as a safe investment channel and promising to create value added. If the national economy continues to grow along with a series of extensive integration opportunities that Vietnam had, it is hoped that 2016 will form many opportunities to create value added for Vietnam real estate market.

When investing in real estate market at this time, investors can easier to buy at cheaper price and more options. Market supply is abundant only with the apartment segment with prices more than 20 million VND/m2, while the segment with prices below 20 million VND/m2, there are not enough houses to sell to buyers.

There are many projects that products are sold out within a month. Hence, small and medium class segments are having greater certainty and especially never being affected by the financial crisis. It also demonstrates two issues: consumer confidence has begun to return to Vietnam real estate market and real estate market of Vietnam always have really secure segment.

How ANT Consulting Could Help Your Business?

Please click here to learn more about ANT Consulting or contact our lawyers and consultants in Vietnam for advice via email ant@antconsult.vn or call our office at +84 28 3520 2779