Potential Resort Real Estate Investments

Potential Resort Real Estate Investments requires a profound understanding of the land legal system and accommodation service business regulations. Investors must clearly define financial goals, land use terms, and the operational capacity of the management unit to ensure a stable cash flow. Complying with legal conditions minimizes disputes and liquidity risks. In the following content, Long Phan Consulting Company provides professional insights into this investment type.

Types of potential resort real estate investments

Current forms of resort real estate investment are diverse in terms of ownership structure and profit-generating methods. Investors can choose a model based on their financial capacity, management experience, and risk tolerance level at each stage of the market.

Buying real estate as an individual

This is the most common form, in which the investor, meeting the eligibility requirements regarding personal background, will directly have their name on the purchase agreement and ownership certificate.

Advantage:

• The transaction process is relatively quick and straightforward, requiring no complex business establishment or operational procedures. Initial costs are low, requiring only the payment of applicable taxes and fees.
• Investors have full discretion over the management, use, leasing, or transfer of the property.
• Easily usable for personal purposes (vacation) or self-operated business (rental) if permitted by law.

Disadvantages:

• This form of ownership primarily applies to the purchase of residential properties (including villas and apartments) in housing development projects under the 2023 Housing Law. For products such as condotels and tourist shophouses on commercial land, the legal complexities of individual investors holding long-term ownership rights face numerous obstacles.
• Investors must fulfill all relevant personal tax obligations, such as personal income tax from renting or transferring the property.
• If you choose to manage the rental yourself, you will have to directly manage it or hire a management company, incurring additional costs and procedures. The investor is liable with all of their personal assets for any obligations arising from the property.

Establishing a real estate business

This is the most common form, where an investor meeting legal identity conditions directly signs the sale contract and holds the certificate of ownership.

• Advantages: The transaction process is relatively fast, requiring no complex enterprise establishment or operational procedures. Initial costs are low, requiring only the payment of prescribed taxes and fees. The investor has full decision-making power regarding the management, use, lease, or transfer of the asset, easily utilizing it for personal holidays or self-managed business (if legally permitted).
• Disadvantages: This form mainly applies to purchasing housing (villas, apartments) in housing development projects under the 2023 Housing Law. For products like condotels or tourist shophouses on commercial/service land, long-term individual ownership faces legal hurdles. Investors must fulfill personal tax obligations (PIT from leasing/transferring). If self-leasing, you must directly manage or hire a unit, incurring extra costs. The investor bears unlimited personal liability for obligations arising from the real estate.

>>>See more: Consulting services for real estate for overseas Vietnamese

Investment cooperation with domestic individuals and organizations

Establishing an enterprise helps you optimize capital and professionalize the operation of a resort real estate chain. A legal entity can bid for projects, receive large-scale project transfers, and easily mobilize capital from credit institutions.

• Advantages: The enterprise can execute professional business activities like creating, purchasing, leasing, and subleasing real estate. It can lease land from the State for investment projects (including commercial/service land), opening up larger opportunities than individual status. Operating under the Enterprise Law and Investment Law ensures transparent financial management, facilitating capital mobilization and professional operation. The investor’s liability is limited to their capital contribution, protecting personal assets.
• Disadvantages: Setting up a Foreign Direct Investment (FDI) enterprise involves numerous procedures and licenses (IRC, ERC) and must meet legal capital (if any) and financial capacity requirements. Maintaining an accounting apparatus, tax reporting, and periodic auditing results in high operational costs. Legal representatives and owners are responsible for the enterprise’s legal compliance.

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Assessing the legal validity of resort real estate projects

Legal due diligence is a crucial risk control step in the process of advising on potential resort real estate investments. A project eligible for transaction must have all necessary approval documents from competent authorities and must not be subject to seizure or illegal mortgage. Reviewing legal documents helps you establish legitimate ownership and ensures the long-term appreciation of your property’s value.

Regarding the business conditions – offering the project for sale by the investor

1. Business conditions

Developers of tourism and resort real estate projects must fully meet the following conditions: Real Estate Business Law 2023 According to Article 9 of the 2023 Law on Real Estate Business, organizations and individuals engaged in real estate business must fully meet the following conditions:

Regarding the subject

• A business (under business law) or cooperative (under cooperative law) with registered real estate business activities must be established. Except in the following cases:
• Individuals engaged in small-scale real estate business (Clause 3, Article 9 of the 2023 Law on Real Estate Business);
• Organizations and individuals selling or leasing real estate for non-business purposes or on a small scale (Clause 4, Article 9 of the 2023 Law on Real Estate Business).

Conditions for operating a real estate business

• Not during the period when real estate business activities are prohibited, temporarily suspended, or halted by a court judgment or decision, or a decision of a competent state agency;
• Ensure the ratio of outstanding credit and corporate bond balances to equity capital is maintained.
• Real estate businesses operating through real estate projects must have equity capital of no less than 20% of the total investment for projects with a land area of ​​less than 20 hectares, and no less than 15% of the total investment for projects with a land area of ​​20 hectares or more, and must ensure the ability to raise capital to implement the investment project; in cases where a real estate business simultaneously undertakes multiple projects, it must have sufficient equity capital allocated to ensure the above-mentioned ratio for each project to implement all projects.

Individuals engaged in small-scale real estate business (Clause 3, Article 9 of the 2023 Law on Real Estate Business) are not required to establish a company but must declare and pay taxes as prescribed.

In cases where real estate is sold for non-commercial purposes or on a small scale, it is not subject to the Real Estate Business Law, but tax declaration and payment are still required. In the case of individual sellers or those leasing/renting properties, the contract must also be notarized or authenticated.

In the case of organizations or individuals engaging in real estate services, they must establish a real estate service business or cooperative and meet the conditions stipulated by law.

Customers need to request the following documents from the developer for verification:

• Business registration certificate, business license for real estate business activities.
• The audited financial statements demonstrate sufficient legal capital.
• The certificate of eligibility to conduct real estate business is issued by the Department of Construction.
• A portfolio of capabilities and experience in implementing similar projects.
• The investor must publicly disclose information about the project as stipulated in Article 6 of the 2023 Law on Real Estate Business (guided by Article 4 of Decree 96/2024/NĐ-CP) before offering it for sale.

2. Terms and Conditions of Sale

For residential properties, existing buildings put into business

The conditions for offering this type of real estate for sale are stipulated in Article 14 of the 2023 Law on Real Estate Business as follows:

For houses and construction projects in general

• Having a Certificate of Ownership of Housing and Land Use Rights or a Certificate of Land Use Rights, Ownership of Housing and Other Assets Attached to Land or other certificates on land use rights, ownership of assets attached to land as prescribed by land law which records ownership of housing, construction works or a Certificate of Ownership of Housing or Certificate of Ownership of Construction Works, except for housing, construction works, and the floor area of ​​construction works in real estate projects as stipulated in Clauses 2 and 3 of Article 14 of the Law on Real Estate Business 2023;
• Not applicable to cases involving ongoing disputes over land use rights associated with housing or construction works, or disputes over ownership of housing or construction works put into business that are being notified, processed, and resolved by competent authorities; or, in the case of disputes, which have been resolved by competent authorities through judgments, decisions, or rulings that have become legally effective;
• Not subject to seizure to secure enforcement of judgment;
• Not subject to any legal prohibitions on transactions;
• Not subject to suspension or temporary suspension of transactions as stipulated by law;
• The information has been made public as stipulated in Article 6 of the 2023 Law on Real Estate Business.

For residential buildings and construction works within real estate projects

In addition to the above conditions, the following condition must also be met:

• The project must meet the requirements stipulated in Article 11 of the 2023 Law on Real Estate Business;
• There are documents confirming that the house or construction project has been inspected and put into operation and use in accordance with the law on construction;
• The project investor has fulfilled its financial obligations regarding land, including land use fees, land lease fees, and any taxes, fees, and charges related to land (if any) to the State in accordance with the law for land associated with housing and construction works put into business;
• There is a certificate of land use rights in accordance with the land law for land attached to houses and construction works.

Regarding the floor area in construction projects for sale or lease

In addition to the conditions mentioned above, the following conditions must also be met:

• Construction works are established according to investment projects as prescribed by investment law and construction law; they meet the conditions prescribed by law on property registration to be granted property ownership registration by competent state agencies to buyers or leaseholders;
• The floor area of ​​a construction project that is sold or leased must have a specific intended use and be clearly defined separately from other areas within the construction project, as approved by the competent authority. This must be clearly shown in the project’s design documents so that the owner can independently manage and use that floor area.
• Construction works, including the floor area within the construction works in the project, must be designed correctly and in accordance with the applicable regulations and standards for the type of construction work and its intended function;
• The floor area of ​​a construction project that is sold or leased must clearly define the land use rights associated with that floor area, including the form, duration of land use, and the area of ​​land used jointly or separately with other construction project owners or land users, in accordance with the provisions of land law;
• The financial obligations regarding land for the floor area within a construction project must be clearly defined, including land use fees, land lease fees, and any taxes, fees, and charges related to land (if any) payable to the State by the seller, lessor, or buyer/lessee of the floor area within the construction project, and these obligations must be recorded in the purchase or lease agreement.
• Construction projects must be built on land where the land use is based on land allocation by the State with payment of land use fees or land lease with a one-time payment of rent for the entire lease period.

For housing and future construction projects

Before deciding to invest in a future real estate project, customers must verify whether the developer has met all the necessary conditions to be permitted to sell the property.

According to Article 24 of the 2023 Law on Real Estate Business, a housing project or construction project under construction can only be put into business when it satisfies the following core conditions:

• One of the following types of land use right documents is required: a land allocation decision or a land lease decision and a land use right lease contract as prescribed by land law; or a decision permitting the change of land use purpose; or a land use right certificate; or a house ownership and land use right certificate; or a land use right, house ownership and other assets attached to the land certificate; or other certificates of land use rights and ownership of assets attached to the land as prescribed by land law.
• Building permits for houses and construction works, and application dossiers for building permits in cases where a building permit is required according to the law on construction;
• Notification of commencement of construction of houses and construction works, and construction design documents for houses and construction works in cases where a construction permit is not required according to the law on construction;
• Documents certifying the completion of technical infrastructure construction in accordance with relevant construction laws and project progress; in the case of apartment buildings or mixed-use buildings with residential units, documents proving the completion of foundation construction in accordance with construction laws must be provided.
• Before selling or leasing housing units under construction, the project developer must notify the provincial-level state management agency for real estate business in writing that the housing units meet the conditions for sale or lease.
• Housing and construction projects must be located within a real estate project that has been approved by a competent state agency in accordance with the law, and the approved project must include the purpose of investing in the construction of housing and construction projects for sale or lease.
• Meeting the conditions stipulated in points b, c, d, and e of Clause 1, and points a and c of Clause 2, Article 14 of the 2023 Law on Real Estate Business.
• Information regarding real estate and real estate projects put into business has been publicly disclosed in accordance with Article 6 of the 2023 Law on Real Estate Business.
• The floor area of ​​a construction project under construction that is put into business in the future, in addition to meeting the conditions stipulated in Clauses 1, 2, 3, 4, 5, 6 and 7 of Article 24 of the 2023 Law on Real Estate Business, must also ensure the conditions stipulated in Clause 3 of Article 14 of the 2023 Law on Real Estate Business.

The legal status of the real estate project

In addition to the sales conditions, customers need to conduct a thorough review of the overall legal documentation of the entire project. These documents reflect the project’s approval and implementation process in accordance with planning regulations and laws. The absence of any of these documents may lead to project delays or the inability to obtain a Certificate of Ownership later. This includes, but is not limited to:

• Decision approving the investment policy: This is the first document issued by a competent state agency allowing the investor to implement the project.
• Decision approving the detailed planning at a scale of 1/500: This is a detailed planning map of the entire project, showing the location, boundaries, and area of ​​each plot of land, building, and infrastructure system. The property you intend to purchase must have a location and function that conforms to this plan.
• Building permit: Confirms that the construction design of the project has been reviewed and approved by the competent authorities and permission has been granted for construction.
• Acceptance testing of infrastructure and foundations: As mentioned, this is a mandatory condition for sales launch, proving that the project has been implemented in practice.
• Financial obligations: Verify that the developer has fulfilled their financial obligations regarding land (land use fees, land lease fees) to the State. If the developer has not fulfilled these obligations, the issuance of land use certificates to buyers will be stalled. The appraisal process requires legal expertise; therefore, collaborating with a reputable legal consulting firm like Long Phan Consulting Company is a safe solution to ensure all legal aspects are thoroughly checked.

Investing in resort real estate offers many opportunities but also carries significant legal risks. Therefore, before deciding to sign a contract, customers need to:

• Examine the entire project’s legal documentation against the conditions stipulated by law, and do not rely solely on the developer’s promises or advertisements.
• The project is required to provide all necessary documents proving its legality at the time of sale, including a certificate from the Department of Construction confirming its eligibility to conduct real estate business.
• Carefully review the terms and conditions in the purchase or lease agreement, especially regarding ownership rights, land use rights, financial obligations, and commitments to the handover schedule.
• Consider the financial capacity, reputation, and project implementation history of the investor.

If necessary, consult with professional real estate investment consultants specializing in potential resort properties to maximize protection of your rights and avoid future disputes and losses. Completing a thorough and careful legal due diligence process is the most effective way to prevent risks and protect investment capital before proceeding with any transaction.

Policies for managing and operating resort properties

After completing the purchase and sale transaction, managing and operating the resort property is a crucial factor determining cash flow efficiency and profitability. Investors need to understand the common operating models and accompanying legal constraints. Choosing the right operating policy will help optimize revenue and preserve asset value in the long term. There are two main management and operation models that customers can choose from:

Self-management and exploitation:

You take direct responsibility for all activities, including:

• Finding tenants via OTAs (Airbnb, Booking.com) and marketing.
• Managing rates and booking calendars to optimize occupancy.
• Handling maintenance and repairs.
• Registering the accommodation business and declaring personal income tax.
• Pros & Cons: You keep 100% of the revenue after costs, offering higher profit potential. However, you bear all vacancy and operational risks, requiring significant time, expertise, and a local presence.

Entrust the operation and management to a professional management company:

Common in large projects, developers partner with professional operators (international/domestic hotel brands) to manage the entire resort, including privately owned units.

• Rental Pool Program: Your property enters a shared rental pool. Profits are split after operational costs (commonly 85/15 or 90/10 in the owner’s favor).
• Profit Commitments: Some developers guarantee a fixed annual return (e.g., 8-10% of asset value) for a set period (e.g., 5-10 years). You must rigorously appraise the developer’s financial capacity to ensure this is viable.
• Fees and Owner Rights: Carefully review management fees, marketing fees, and maintenance funds. In return, owners usually receive complimentary free nights (e.g., 15 nights/year).
• Pros & Cons: Generates passive income suitable for remote investors. However, you must carefully scrutinize contract termination clauses, fee structures, and the transparency of periodic financial reports.

Several risks should be considered when advising on potential resort real estate investments

Investing in resort real estate in Vietnam offers attractive profit potential, but also comes with specific risks that investors need to identify and assess carefully. These risks mainly stem from the legal framework, market characteristics, and product liquidity. Anticipating these issues will help clients build a safe and sustainable investment strategy.

Real estate ownership period

• Unlike residential land with long-term stability, resort properties (condotels, resort villas) are typically built on commercial/service land. Under Article 172 of the 2024 Land Law, this land is leased by the State for a limited term, usually 50 years (up to 70 years in difficult socio-economic areas). When the lease expires, the rights terminate unless an extension is granted. This short term causes asset depreciation over time, makes bank mortgaging difficult, and creates business plan instability. You must check the remaining land use term in the developer’s land lease decision.

Geographical location (site) of the project

Location directly dictates success. Projects far from tourism hubs or with poor infrastructure suffer 30-40% lower occupancy rates. Furthermore, under Article 44 of the 2024 Land Law, transferring land use rights in defense/security-sensitive areas (border, coastal, island zones) requires competent authority approval. Verify if the project sits in areas restricted for Overseas Vietnamese to avoid invalidated transactions.

Long Phan Consulting Company provides consulting services for potential resort real estate investments

Long Phan Consulting Company provide consulting solutions for potential resort real estate investments, supporting our clients in optimizing profits and securing investment capital. Our team of experienced experts directly performs the following services:

• Review and verify the legal validity of the project documents and the actual capacity of the investor.
• Providing advice on transaction structures, drafting and revising sales contracts and investment cooperation agreements.
• We represent you in negotiating terms regarding operational management and profit sharing.
• Instructions on procedures for registering property ownership and fulfilling related tax obligations.
• Complete the procedures for establishing a real estate business and obtaining the necessary sub-licenses.
• Resolving disputes arising during the execution of contracts and the exploitation of real estate.
• Stay updated on the latest regulations to adjust investment plans accordingly.

Some frequently asked questions when providing investment advice for potential resort real estate projects

The following, Long Phan Consulting Company are some frequently asked questions regarding investment advice for potential resort real estate projects. We invite interested clients to refer to them:

How should investors manage the risk of exchange rate volatility?

To mitigate exchange rate risk, investors can consider lease agreements or operator agreements that peg the price to a strong foreign currency (e.g., USD). Additionally, consulting financial experts to utilize hedging tools is also a solution, although not yet very common among individual investors in Vietnam.

What is the most effective dispute resolution method when conflicts arise with the developer or operator?

Contracts often specify that the dispute resolution body is either a competent court or a commercial arbitration center. Arbitration is generally preferred due to its quick and confidential process and final judgments. However, arbitration costs are usually higher than litigation in court.

Is it possible to mortgage a vacation property to secure a bank loan?

This is very difficult. Banks in Vietnam are very cautious about accepting resort real estate as collateral, especially condotels that do not yet have individual ownership certificates. The property has a 50-year lease term and its legal status is unclear, reducing the collateral value of the loan.

What is the minimum investment required to implement a resort project?

Investment law does not stipulate a fixed minimum capital amount. However, investors must demonstrate their financial capacity in accordance with Clause 8, Article 1 of Decree 239/2025/ND-CP. Therefore, the capital level must be reasonable and commensurate with the scale of the proposed project.

What investment incentives can a resort project receive?

Resort projects may be eligible for investment incentives if they fall under the categories stipulated in Decree 31/2021/ND-CP, for example, projects implemented in areas with difficult or extremely difficult socio-economic conditions. Specific forms of incentives include: preferential corporate income tax rates, exemption from import duties on goods used to create fixed assets, and exemption or reduction of land use fees and land lease fees.

Conclusion

Consulting on potential resort real estate investments requires tight coordination between market analysis and a deep understanding of current laws. Clients must be cautious in selecting products and partners to protect their assets sustainably.

For the safest and most in-depth consulting solutions, please contact Long Phan Consulting Company via Hotline 1900636389 for professional advice on potential resort real estate investments.