An overview of Vietnam’s legal framework on foreign real estate ownership

Before exploring the issues of foreign property ownership in Vietnam, it is essential to define what constitutes real estate under local law. According to the Civil Code 2015 of Vietnam, real estate encompasses land, houses, constructions attached to land, and other assets firmly fixed to the land. The Law on Real Estate Business 2023 further regulates the commercialisation of these assets.

Crucially, under the Vietnamese legal framework, all land remains a collective asset under the administration of the state. However, while direct private ownership of land is not permitted, individuals and entities can legally own the physical structures and assets attached to the land.

The Land Law 2024 enhances legal clarity and flexibility for foreign investors seeking access to property assets in the country. It establishes a structured system under which foreign individuals and entities may acquire and monetise assets attached to land, supported by a legally recognised ownership certificate allowing the legal foreign ownership of physical structures, such as apartments or villas. This framework, while distinct from freehold ownership models, has matured to effectively support long-term investment, financing, and exit strategies.

Foreigners are permitted to:

• Acquire residential properties, specifically apartments and landed houses, within eligible commercial housing projects; and

• Hold the property for a standard ownership term of 50 years, with the possibility of an extension in accordance with applicable laws. Notably, if they sell their properties to Vietnamese citizens, this threshold will be changed to stable, long-term (freehold) ownership for the purchasers.

Nonetheless, they are prohibited from:

• Holding land use rights (LURs) directly;

• Owning properties located in areas designated for national defence and security; and

• Purchasing residential properties from Vietnamese citizens on the secondary market. Under Article 17 of the Housing Law 2023, foreigners are strictly prohibited from such transactions and may only buy directly from authorised developers or from other existing foreign owners.

While foreign individuals may acquire properties within eligible projects, such ownership is strictly regulated by statutory caps, as follows:

• A maximum cap of 30% on the total number of units a foreigner can own within a single condominium building; and

• Strict numerical restrictions on the ownership of landed housing within defined administrative areas.

Under the Land Law 2024, foreign-invested enterprises (FIEs) enjoy enhanced flexibility to access land via land allocation or leasing from the state, or leasing land from private sources such as industrial and economic zones. However, their rights, obligations, and entitlements differ depending on the land-use origin and the method of land rental payment (lump-sum versus annual payment).

If FIEs pay a lump-sum rent for their land lease, they are legally entitled to mortgage both their LURs and land-attached assets (e.g., factories and warehouses) to licensed credit institutions. However, non-real estate FIEs may only utilise such properties as an operational asset (such as offices, facilities or employee housing), and must strictly align these acquisitions with their registered business lines and the approved project duration.

Notwithstanding the above, foreign investors must remain vigilant regarding statutory restrictions to avoid severe legal risks:

• Invalid nominee structures – attempting to bypass ownership quotas by registering property under a Vietnamese national’s name is deemed a null and void transaction due to falsity under the Civil Code. Consequently, Vietnamese courts offer no protection for the foreign investor’s beneficial ownership or economic interests.

• No residency pathway – acquiring residential properties does not grant any immigration privileges, or temporary or permanent residency rights.

Foreign property ownership in Vietnam is legally permitted but structurally constrained by LURs, statutory time limits, and ownership quotas. While direct land ownership remains unavailable, the legal recognition of land-attached assets, combined with improved financing mechanisms and clearer regulatory guidance, provides a solid foundation for investment. For investors prepared to engage with this framework, Vietnam offers a compelling combination of growth potential, legal certainty, and long-term strategic value.