Mr. Greg Ohan, Director of JLL Vietnam, shares tips that foreign property investors need to know if they are looking to sell or rent out their apartments in Vietnam.
Almost 20 months on from legislation that flung the gates open for foreigners to buy property in Vietnam, a lack of subsequent legal documents clarifying relevant procedures means the law is yet to be implemented practically and as such there is no clearly defined process.
For the more than 80,000 foreigners living and working in Vietnam and the more than 4 million Viet Kieu (overseas Vietnamese) who have close links with their home country, complications and frustrations are normally “expected” and managed. However, with offshore foreign investors not living in Vietnam, a few things need to be prepared.
Should offshore foreign investors have been fortunate enough to make a quick buck and have found someone to sell their apartment to, congratulations. They will be required, however, to demonstrate marital status with a notarized and translated document from the registry in their home country, which will need to again be notarized and translated in Vietnamese at a local notary office. This takes time and money.
They will then need to prepare a “deposit contract” and a “sales contract”, both of which must be notarized and signed by all parties, including the developer that sold their property in the first place. There are no standard contracts so they must prepare one themselves (or have a consultant 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 is paying tax. Offshore foreign investors cannot repatriate their funds by the book if their tax has not been paid.
Finally, when the time comes to have all that hard-earned cash sent to their bank account, be aware that the only way offshore foreign investors can repatriate money to most international banks to ensure Vietnam law has been abided by is to provide all of the above documents, including their red invoice as payment proof from the tax department. Then and only then will the bank allow them to receive their funds and / or repatriate. Once this is completed, offshore foreign investors will need to also pay the developer to finalize the transfer.
With many major projects due to be completed in Ho Chi Minh City and Hanoi in late 2017, it’s almost time to look for tenant. While rent is typically paid monthly, be aware that the above rules (largely enforced by the bank) in regards to taxation, repatriation and receipt of funds will apply. Unless offshore foreign investors are willing to pay a visit to the tax office every month, they may need to settle on collecting their rental return on a quarterly, monthly or annual basis, for convenience.
Vietnam Economic Times