Investment Potential of Land Plots in Vietnam for Overseas Vietnamese

Investment Potential of Land Plots in Vietnam for Overseas Vietnamese is a central legal topic, especially as the 2024 Land Law expands the rights of Vietnamese residing abroad. Investors must meticulously analyze regulations regarding transaction conditions and developers’ legal capacity to optimize capital flow. The following article provides comprehensive information on the viability and regulations of investment potential of land plots in Vietnam for overseas Vietnamese.

What is a land plot? Current conditions for buying and selling land plots

Understanding what a land plot is and the current conditions governing its purchase and sale is essential for evaluating the investment potential of land plots in Vietnam for overseas Vietnamese in today’s real estate market.

Current law does not provide a specific definition for the term “land plot”. However, in the real estate business sector, land plots are understood as parcels of land without construction works, maintaining their original state, which have been planned and subdivided within an investment project.

Trading land plots is essentially a transaction transferring land use rights. In practice, land plots are categorized based on purpose and location into three main types:

• Project land plots: Parcels within a project approved by a competent state agency, possessing synchronized technical infrastructure, and zoned for building housing, urban areas, or other works.
• Residential land plots: Residential land belonging to the non-agricultural land group, existing in both rural and urban areas, used for building housing and life-serving works.
• Adjacent land plots: Contiguous parcels within the same planning area, often with similar areas and structures, forming a unified architectural whole.

For a project land plot to be eligible for trading, the law imposes strict requirements. Under Article 31 of the 2023 Law on Real Estate Business, transferring land use rights within a real estate project to an individual to build their own house must meet the following conditions:

• The project must conform to land use planning and plans.
• The project must conform to approved planning under construction, urban, and rural planning laws.
• Investment and construction procedures must follow regulations on planning, investment, land, construction, housing, and related laws.
• Must comply with the construction permit, if required.
• The project must be constructed according to the schedule, planning, design, and within the investment term approved by competent state agencies.
• For housing construction projects, besides meeting Clauses 1, 2, 3, 4, and 5 of Article 11 of the 2023 Law on Real Estate Business, they must also meet housing law requirements.
• Must have completed the construction of technical infrastructure works according to the approved detailed planning and project schedule.
• Must guarantee the provision of electricity, water supply, drainage, waste collection, and wastewater treatment services; and ensure connection to the area’s common infrastructure system before transferring or leasing land use rights.
• The transfer or lease of land use rights with existing technical infrastructure must align with the investment objectives approved by competent agencies.
• Must possess a certificate of land use rights and be within the land use term. The transferred area must lie within the project area that already has a certificate of land use rights.
• The land use rights must not be under dispute, distrained for judgment execution, legally prohibited from trading, or temporarily suspended from trading.
• The land must not be located in wards, districts, or cities of special, Class I, Class II, and Class III urban areas; or fall under cases requiring land use right auctions for housing projects. For remaining areas, the provincial People’s Committee determines where developers may transfer land with infrastructure to individuals for self-building.
• Before transferring, the developer must send a written notice to the provincial real estate business management agency stating the land is eligible for transfer. The agency has 15 days to inspect and reply in writing.
• Information about the land use rights with existing technical infrastructure must be publicly disclosed under Article 6 of the 2023 Law on Real Estate Business.

Fulfilling these legal conditions is a mandatory requirement for a project land plot to be traded, creating a safe legal corridor for participating parties and helping investors avoid capital risks and prolonged disputes.

>>>See more: What are the Conditions for Overseas Vietnamese to Invest in Real Estate Projects in Vietnam?

Should overseas Vietnamese invest in land plots in real estate projects in Vietnam?

Assessing whether overseas Vietnamese should invest in land plots within real estate projects requires careful consideration of the investment potential of land plots in Vietnam for overseas Vietnamese, including market opportunities and legal frameworks.

“Overseas Vietnamese” is understood as Vietnamese citizens abroad who retain Vietnamese nationality, and people of Vietnamese origin residing abroad who no longer hold Vietnamese nationality, under Clause 3, Article 3 of the 2008 Law on Vietnamese Nationality.

For Vietnamese citizens abroad, real estate rights are identical to domestic citizens. For people of Vietnamese origin without nationality, rights are more restricted. However, the 2024 Land Law allows people of Vietnamese origin to receive land use right transfers in housing development projects equally to domestic individuals. You have the right to buy or lease-purchase housing attached to residential land use rights in commercial housing projects. Specifically:

Under Point h, Clause 1, Article 28 of the 2024 Land Law, people of Vietnamese origin permitted to enter Vietnam have the right to:

• Buy or lease-purchase housing attached to residential land use rights.
• Receive residential land use rights in housing development projects.
• Inherit residential land use rights and other land types in the same parcel containing housing.
• Receive gifts of housing attached to residential land use rights from lawful heirs.

Accordingly, Overseas Vietnamese can directly receive residential land use rights by purchasing housing within development projects. Although regulations do not explicitly mention “buying land plots,” purchasing housing attached to land use rights essentially includes owning the use rights to that plot. This is the legal mechanism allowing Overseas Vietnamese to buy land plots within real estate projects.

Under Clause 3, Article 27 of the 2024 Land Law, if one or all parties in a land transfer contract are real estate business organizations, notarization or authentication is executed upon the parties’ request, offering flexibility. When Overseas Vietnamese buy off-plan housing or eligible land plots from a developer, the transaction is executed via a real estate business contract.

Conditions for overseas Vietnamese to be recognized as having the right to own property in Vietnam

Clarifying the legal conditions under which overseas Vietnamese may be recognized as property owners is a crucial step in understanding the investment potential of land plots in Vietnam for overseas Vietnamese.

Under Article 8 of the 2023 Housing Law, Vietnamese residing abroad under nationality laws are eligible to own housing in Vietnam. To actualize this, you must meet the condition in Point b, Clause 2, Article 8 of the 2023 Housing Law: Vietnamese residing abroad permitted to enter Vietnam may own housing attached to residential land use rights under land laws.

Furthermore, Points b and c, Clause 3, Article 3 of Decree 95/2024/ND-CP stipulate the required proving documents:

• For Vietnamese citizens residing abroad: Must possess a valid Vietnamese passport with an entry stamp into Vietnam at the time of establishing housing.
• For people of Vietnamese origin residing abroad: Must possess a valid passport with an entry stamp into Vietnam, or international travel documents with a verification entry stamp at the time of signing the housing transaction.

Requirements for the transferor when buying and selling land plots

Examining the legal requirements imposed on the transferor in land transactions helps ensure transparency and supports the assessment of the investment potential of land plots in Vietnam for overseas Vietnamese. To protect buyers, the law demands the transferor (project developer) meet strict conditions. Under Article 32 of the 2023 Law on Real Estate Business, the developer must:

• Be the approved real estate project developer.
• Be a lawfully established enterprise or cooperative with real estate business lines.
• Not be banned, suspended, or halted from real estate operations by a Court or competent state agency.
• Maintain prescribed credit and bond debt-to-equity ratios.
• Capacity conditions: Must have equity of at least 20% of the total investment for projects under 20 hectares, and at least 15% for projects 20 hectares or larger.
• Possess a certificate of land use rights within the valid land use term.
• Fulfill financial obligations: Must have fully paid land use fees, land rent, and related taxes/fees for the traded land area.
• Comply with administrative penalties: Must have completed any prior penalty decisions related to the land.

Meticulously appraising the developer’s legal and financial standing is the most effective first line of defense for buyers.

>>>See more: Overseas Vietnamese Land Investment: A Guide

Some important considerations when buying land plots in real estate projects in Vietnam

Identifying key considerations when purchasing land plots in real estate projects is fundamental to evaluating the investment potential of land plots in Vietnam for overseas Vietnamese and minimizing potential risks. Purchasing land plots within real estate projects carries significant legal and financial risks. To ensure safety, customers should conduct thorough due diligence and verification before making any investment decisions. Specifically:

Legal aspects of the project

Reviewing the legal status of a project is a critical factor in determining the investment potential of land plots in Vietnam for overseas Vietnamese, as legal clarity directly affects investment security. Transactions carry latent legal and financial risks. To ensure safety, conduct a comprehensive appraisal before deciding.

Project Legality: Check the investment license and 1/500 detailed planning approval. The developer must have a written notice to the provincial agency stating the land is eligible for transfer (Clause 7, Article 31, Law on Real Estate Business 2023). Verify the project has a land use right certificate for the entire area.

The developer’s capabilities and experience

Assessing the capabilities and experience of the developer provides valuable insights into the investment potential of land plots in Vietnam for overseas Vietnamese, particularly regarding project reliability and completion prospects.

The investor must meet the capacity requirements stipulated in Article 9 of the 2023 Law on Real Estate Business. Overseas Vietnamese should research the investor’s operating history, completed projects, and reputation in the market. They should also check the investor’s financial statements, charter capital, and financial capacity to ensure the project is implemented on schedule.

Consider the project management team, construction partners, and design consultants of the developer. Experienced developers will have professional project management processes and transparency in providing information to customers. Choosing a reputable developer helps minimize risks regarding the project’s progress and infrastructure quality.

Review the project implementation progress and technical infrastructure

Evaluating the implementation progress and technical infrastructure of a project further highlights the investment potential of land plots in Vietnam for overseas Vietnamese, especially in terms of long-term development prospects.

According to Article 31 of the 2023 Law on Real Estate Business, land plots being transferred must have existing technical infrastructure. Buyers should check the actual progress of infrastructure construction, including roads, electricity, water, drainage, etc. Evaluate the quality of infrastructure construction and compare it with the developer’s commitments in the contract.

Review the plan and progress of completing public amenities in the project. Check the acceptance reports for completed infrastructure items and the land handover plan for customers. Accurately assessing the progress helps overseas Vietnamese plan their housing construction accordingly and avoid the risk of delays.

Check the zoning plan, building permit, and land use certificate

Verifying the zoning plan, building permit, and land use certificate is a necessary step in analyzing the investment potential of land plots in Vietnam for overseas Vietnamese, ensuring compliance with legal and planning regulations.

According to Clauses 4, 6, and 7 of Article 76 of the 2024 Land Law, overseas Vietnamese need to check whether their land parcel is subject to expropriation planning. If the land use plan has been announced but there is no annual land use plan at the district level, the land user may continue to use the land and exercise their rights as prescribed. If the land is included in the expropriation plan but no expropriation decision has been made after two years, the competent authority must consider adjusting or canceling the plan.

Check the detailed construction plan for the land plot regarding building density, height limits, and building boundaries. Verify whether the land plot has been issued with individual land use right certificates. Thoroughly checking the plan and legal documents helps avoid purchasing land that is not permitted for construction or has restricted land use rights.

Review the contract terms

Carefully reviewing contract terms is an important measure for protecting investors’ rights while assessing the investment potential of land plots in Vietnam for overseas Vietnamese. Customers should carefully read the terms regarding transfer price, payment method, and payment schedule. The terms concerning the deadline for land handover and the handover of land use right certificates must be clearly stipulated.

Consider penalty clauses for breach of contract for both parties and force majeure clauses. The rights and obligations of the parties during the performance of the contract must be clearly stated. Dispute resolution clauses and the dispute resolution body should be agreed upon to protect the buyer’s interests.

Long Phan Consulting Company provides consulting services for overseas Vietnamese investing in and buying land plots in real estate projects

Our consulting unit accompanies you throughout your land plot investment journey in Vietnam with profound expertise in land law. We provide professional advisory services to eliminate legal risks and protect your capital. We structure our professional support into the following key area:

• Verify the legal status of the real estate project and the financial capacity of the transferring developer.
• Draft and review deposit agreements and land use rights transfer agreements to protect the rights of buyers.
• Authorized representatives handle procedures for declaring taxes and registration fees, and submitting registration change documents to government agencies.
• We provide advice on legal methods for transferring money from abroad to Vietnam, ensuring compliance with foreign exchange regulations.
• Monitor the progress of issuing land use right certificates and the handover of actual assets from the investor.

With a team of experienced professionals, Long Phan Consulting Company is committed to working alongside our valued clients, transforming complex legal regulations into safe and effective investment solutions in practice.

Some frequently asked questions about investment potential of land plots in Vietnam for overseas Vietnamese

The following, Long Phan Consulting Company some frequently asked questions regarding whether overseas Vietnamese should invest in land in Vietnam. We invite interested clients to refer to them:

Can overseas Vietnamese be named on a Land Use Right Certificate (Land Title Deed)?

According to Clause 1, Article 26 of the 2024 Land Law, overseas Vietnamese are land users who are granted land use certificates when they meet the conditions stipulated by land law.

Overseas Vietnamese, who are Vietnamese citizens residing abroad and own construction works, are eligible for a land use right certificate if they possess one of the documents specified in Clause 1, Article 149 of the 2024 Land Law. Similarly, overseas Vietnamese who create construction works and possess documents that comply with the regulations of the law on construction are also eligible for a land use right certificate (based on Clauses 1 and 4, Article 149 of the 2024 Land Law).

Therefore, overseas Vietnamese who use land/own houses, construction works/create construction works in Vietnam are granted land use rights certificates when they meet the conditions stipulated by the laws on housing and land.

Are Vietnamese expatriates who no longer hold Vietnamese citizenship (people of Vietnamese origin) allowed to buy townhouses and land plots from households or individuals for resale to make a profit?

No. According to Clause 3, Article 10 of the 2023 Law on Real Estate Business, people of Vietnamese origin who do not have Vietnamese citizenship are only allowed to conduct real estate business through investing in the construction of houses and buildings within real estate projects; or leasing for subleasing. These individuals are not allowed to acquire land use rights or purchase individual houses outside of projects for business purposes (buying and reselling).

Are overseas Vietnamese allowed to acquire the entire real estate project from another developer to continue the business?

Yes. Based on Point g, Clause 1 and Point c, Clause 3 of Article 10 of the 2023 Law on Real Estate Business, both groups of overseas Vietnamese (those with and without Vietnamese citizenship) are permitted to receive the transfer of all or part of a real estate project to continue investing in construction and business, provided that the project meets the legal requirements and the transferee has sufficient financial capacity.

What behaviors are strictly prohibited for overseas Vietnamese when engaging in real estate business?

According to Article 8 of the 2023 Law on Real Estate Business, the following acts are strictly prohibited in real estate business:

• Real estate business not meeting the requirements of the 2023 Real Estate Business Law.
• Falsifying documents and intentionally misrepresenting information about real estate properties or real estate projects before putting them on the market.
• Failure to disclose information about real estate properties or real estate projects put into business as required by the law on real estate business.
• Fraud, deception, and scams in real estate business.
• Collecting money from the sale or lease-purchase of housing, construction works, or floor area within construction works that are under construction in violation of the 2023 Law on Real Estate Business; using money collected from buyers or lease-purchasers of housing, construction works, or floor area within construction works that are under construction in violation of the law.
• Failure to fulfill or incomplete fulfillment of financial obligations to the State.
• Issuing real estate brokerage licenses and using real estate brokerage licenses in violation of the law on real estate business regulations.
• Collecting, managing, and using fees, charges, and other funds related to real estate business in violation of the law.

If overseas Vietnamese buy real estate but don’t live in Vietnam regularly, how can they manage their assets?

According to Article 57 of the 2024 Notarial Law, overseas Vietnamese can authorize relatives or organizations in Vietnam in writing (with notarization or certification) to manage, use, or conduct transactions related to real estate on their behalf.

Conclusion

Whether Overseas Vietnamese should invest in land plots in Vietnam depends on identifying opportunities and controlling market risks. With the newly open legal framework, this is a golden time to establish asset ownership in your homeland, please contact us Long Phan Consulting Company via Hotline 1900636389 To receive timely and effective support from our team of experts.