Almost 20 months on from the legislation which flung the gates open for foreigners to buy, a lack of subsequent legal documents clarifying relevant procedures means the law is yet to be implemented practically and as such there is no clear defined process.
For the more than 80,000 foreigners living and working in Vietnam and more than 4 million Viet kieu who have close links with their home country, complications and frustrations are normally “expected” and managed. However, if you are an offshore foreign investor not living in Vietnam - be prepared.
So what should foreign property investors need to know if they looking to sell or rent out their apartments? Allow me to share a few pointers from my own recent experience.
1. Selling / Transferring
Should you have been fortunate enough to make a quick buck and have found someone to sell your apartment too, CONGRATULATIONS. Though, you will be required to demonstrate marital status with a notarised and translated document from the registry in your home country which will need to again be notarised and translated in Vietnamese at a local notary office – this takes time and is done at a fee.
Then you will need to prepare a ‘deposit contract’ and a ‘sale contract’ both of which must be notarised and signed by all parties including the developer that sold you the property in the first place. There are no standard contracts so you must prepare one yourself (or have a consultant to do so).
The next step is to have the above translated, signed and witnessed in Vietnamese by a notary. Once the transaction is completed, the next step will be your tax and paying this amount. You cannot repatriate your funds by the book if your tax has not been paid – fact.
Finally, when the time comes to have all that hard earned cash sent to your bank account, be aware that the only way you can repatriate your money with most international banks to ensure Vietnam law is abided by is to provide ALL of the above documents including your red invoice as payment proof from the tax department. Then and only then will the bank allow you to receive your funds and / or repatriate. Once this is complete, you will need to also pay the developer to finalise the transfer.
2. Renting / Leasing out your property
With many major projects due to complete in Ho Chi Minh City and Hanoi in late 2017, if you are an investor it’s almost time to lock in a tenant. However, while rent is typically paid monthly, be aware that the above rules (largely enforced by the bank) in regards taxation, repatriation and receipt of funds will apply. Unless you’re willing to pay a visit to the tax office every month, you may need to settle on collecting your rental return on a quarterly, monthly or annual basis for convenience. Make sure you plan and factor for this.
Easy right? … I wish someone would have told me!
While market activity is promising in 2017, if you have purchased a property and are considering to sell or lease it just make sure you have a supportive local consultant willing to give you a hand – otherwise, ‘it’s complicated’.
By Greg Ohan, business development director of real estate consultancy JLL Vietnam
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