Foreigners to buy into Phu Quoc

Permission has been given for foreign residents to purchase houses on Phu Quoc island in a bid to boost investment

The permission was included in a recent prime ministerial decision on Phu Quoc’s operation statute, which was issued as part of a bigger plan to build the undeveloped island group into a world-class tourist destination.
Foreigners are currently not permitted to buy houses in the rest of the country while only four categories of overseas Vietnamese are eligible for house purchase.
The statute gives the thumbs-up to overseas Vietnamese, foreign-invested enterprises and individuals to build houses for lease and sales or sublease and transfer land use rights of land areas with infrastructure.
The decision also allows permanent foreign residents to take long-term lease of land and overseas Vietnamese to purchase houses with attached land use right. However, it does not detail how long foreign residents can take land lease and purchase houses.
Bui Ngoc Suong, chairman of the Kien Giang provincial People’s Committee, said foreign investors who build houses for sale and lease in Phu Quoc will have to follow the island’s 1/2000 master plan. The province will zone areas where land and houses can be sold.
He said the government’s statute for Phu Quoc was more unique and tolerant than any existing regulations in Vietnam.
The statute provides investors in Phu Quoc with all the incentives applied to poor regions in Vietnam.
Businesses here will be levied with a corporate income tax of 10 per cent for the whole life of their projects, compared to the normal 28 per cent level. Both Vietnamese and foreign high-income earners in Phu Quoc will have their income tax reduced by half.
Phu Quoc will build a bonded warehouse in which goods and services will not have to clear customs procedures.
These incentives aim at building the pristine island, known as a pepper-growing and fish sauce-making region than for its beautiful white sand beaches and turquoise sea water, into a high-class tourist destination that will lure up to 3 million tourists by 2020.
The state budget will be spent on building a new Phu Quoc airport, An Thoi sea port, major roads, and a number of other infrastructure works between now and 2010 to attract investors.
Suong said the issue of the statute would represent a big opportunity for the island to become a high-quality and leading tourism, trade and service centre in Southeast Asia in 2010.
He said the province would hold a conference in Ho Chi Minh City by the end of March to call for investment into Phu Quoc.
More than 3,800 hectares of land on the island would be set aside for construction of 13 large tourist complexes, a number of smaller resorts, four golf courses and a race track according to Phu Quoc’s construction master plan toward 2020 approved by the government two months ago.
The Long Beach will become the tourist and commercial centre of the island with high-rise properties to be built on 1,100 hectares to house financial, banking, commercial, post, entertainment and hotel facilities.
The master plan also revealed the construction of a new airport on 800 hectares in Duong To commune with an annual capacity of 2.5 million passengers. The airport is expected to be put in use after 2010.
A number of new residential and commercial areas will also be built on the island to provide accommodation for up to 230,000 people by 2020. To date, investors have registered nearly 100 projects
However, difficulties remain ahead, Suong said. The island lacks a detailed development master plan and infrastructure such as roads and ports is poor. Investors who are exploring business opportunities in Phu Quoc are recoiling from these difficulties.
Suong said although An Thoi and Phu Quoc planned to become an international port and airport the province has not worked out these detailed development plans.
Phu Quoc is a one-hour flight from Ho Chi Minh City. Vietnam Airlines currently offers daily flights from there and from Rach Gia town of Kien Giang to the island, but due to the small airport, the number of tourists remains low.



No. 750/February 27-March 5, 2006