Ever since the macroeconomic environment of Vietnam has stabilized in the recent years, it opened doors for business and real estate investment, especially for a lot of foreign investors who are scrambling to get the best deals for property in Ho Chi Minh City.
Additionally, the growth of telecommunications, manufacturing, and clothing export has helped in the growth of the economic environment that was previously reliant on agriculture alone. Competitive costs in foreign investment has also attracted a lot of people looking for a new place to call home or to invest in real estate and business.
Forms of Investment
There are several forms of investment in Vietnam that you might want to consider such as the following: investment through contractual arrangement, new legal entity, business cooperation contracts, public private partnership, share or capital acquisition of any existing entity, investing through intermediary financial parties, securities investment funds, and the acquisition of shares/bonds/share certificates and others in stock exchange.
A foreign investor might also want to consider other forms of commercial presence in Saigon such as foreign business entity branch, limited-liability company, partnership, joint-stock company, and a representative office. What facilitates a competitive foreign investment environment in Ho Chi Minh City is the investment incentives in Vietnam that are based on the location of existing or new project launches, type of business industry, qualified investment projects, and engaging in businesses that support industries.
Real Estate Investment
One of the most lucrative investments in Vietnam today are the new property launches in Saigon. The latest estate projects can be owned by any foreign investor who has a three-month residence or tourist visa and can purchase a land through a renewable 50-year lease. It is also less strict for foreign groups or companies to own land or a house. However, there is a limit to how many residential units you can own, say, in district 1 or any other district in Ho Chi Minh City. Freehold ownership is also not permitted, and land can only be leased because it is collectively owned by the state, hence the 50-year lease with an option for an extension. However, you can technically own the property on that land, but not the land itself.
It is also not possible to own more than 30% of the residential units within a building or more than 250 houses, say, in district 4 of Ho Chi Minh City. This means that you can own more than a hundred apartments and houses, but not within the same ward or district. The same rules apply not just for Saigon, but also in other big cities in Vietnam such as Hanoi.
Land tax between .03% to .15% is paid depending on the land size and value. If there are any profits made in the property, the owner has a capital gains tax of .15%.
Most investors in Ho Chi Minh City buy property for sale such as houses or apartment units to have them rented. Remember that rental income tax is at 20%, but if you wish to transfer a real estate property, there is a 5% value added tax on top of a registration fee of .05% based on the value of the property.
Most foreign investors have encountered no problems when it comes to owning and leasing land and other properties in Vietnam, especially in major cities like Ho Chi Minh City where several new project launches are common. However, it is advisable that you take your time to research about the real estate resellers and check out sites like http://www.propertylaunch.vn/ before buying any property for sale. To minimize risks, whether from working with the wrong reseller or from purchasing a new housing and/or apartment, do the proper amount of due diligence and make sure it’s a good value before signing any contract.
Ho Chi Minh City
So, why is Ho Chi Minh City so popular to foreign investors? That is because most businesses and opportunities are found here. Real estate investment in particular is a booming industry, especially in popular districts such as district 2 and district 4 where expats and investors are commonly residing or managing a business. District 1 in particular is called the center of commercial and corporate development in the country.
The competitive rates, the fast expansion of industrial and commercial development, and the overall improvement of the infrastructure make Ho Chi Minh attractive to foreign investors. With its total of 19 urban districts and 5 suburban districts, it is no wonder the city is continuously expanding and improving.