How do you invest in Vietnam real estate?

Diazo Serial expat

948POSTS

8 years ago

Sure one can invest in Vietnam. But to do so in many ways depends on what country you are from. If your from Vietnam then your choices become more limited and far more risk. Yes, one can invest in the stocks of Vietnamese companies, but the transparency is weak at best, GAAP is not followed here, and enforcement weak. If, however you are from America you can invest in funds that have boots on the ground in VN to due the due diligence on the publicly owned companies. Indeed, a foreigner can invest in real estate in the USA. But not in the way an American can. An American can right off the income off of real estate, because of the favorable tax status of RE. However, a non-US citizen must pay taxes of 30% off the top
Bonds, sure one can buy bonds. But again it depends on which country you are a citizen of if it is the best thing for you. If you are Vietnamese then your choices are limited and you would need to buy bonds with an underlying inflation risk. Whereas if you could invest in US bonds, and the stable currency your currency risk would be less.
I get the feeling that Violetta maybe recruiting. At any rate one needs to be aware of what they are doing when they invest. I wish I could count the number of Americans that move their money here to invest in the HIGH PAYING bonds of Vietnam at 6 or 7% yield. But the true yield is inline with true yield in America or any other country. It is inflation that is the equalizer. When you have 5% inflation true yield become 2%

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jazzy851 ViP

1487POSTS

8 years ago

#42

I think people are saying be careful, not too many saying you cant buy here, you can.

I couldn't have summarized it any better colinoscapee

The Saigon expat guide

Comprehensive and free

Read it now

Diazo Serial expat

948POSTS

8 years ago

#43

I think that goes w/o saying. If course, one can, in some ways invest here. But the wisdom maybe flawed. I am not even addressing the gegakuty of investing in VN. Most countries have prohibitions against some forms of investment. And here in VN it seems even the legality changes with the wind. This is why so many multinationals do not want to invest here directly. To invest where there is little or no transparency is a huge risk in and of itself. Couple that with the cheat anybody mentality and you might want to rethink things. As I say in all situation here "guard your money".

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jazzy851 ViP

1487POSTS

8 years ago

#44

And here in VN it seems even the legality changes with the wind.

This seems the norm in some (or most) asian countries!

As I say in all situation here "guard your money".

Diazo Serial expat

948POSTS

8 years ago

#45

It maybe the norm in Asia, and I do not disagree. But this is precisely why investing in countries that do not have a sound legal foundation make such an investment quite risky. Yes, you can buy mutual funds tatcinvest in such countries. But they have their own people go into these companies and investigate their account IAW GAPP accounting standards ( in the case if publicly held companies". Tge young lady he posted to this thread was asserting the fact that one should never let anyone convince you you CAN'T. I certainly am not trying to say you can't. If it blows your skirt up and you get a cool feeling, then go for it. In this forum Aline there seem to be many who have made millions investing in VN.

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jazzy851 ViP

1487POSTS

8 years ago

#46

If it blows your skirt up and you get a cool feeling, then go for it.

In this forum Aline there seem to be many who have made millions investing in VN.

Yep - I agree with you on this - I saw for my self how wealthy some Districts are, the type of luxury cars that are driven out there. More over, the high end shops there i thought were only visible in Europe... So it gave me a clue as to how some took these opportunities and made it.

Diazo Serial expat

948POSTS

8 years ago

#47

Well I was not really speaking of those areas of town. I was referring to the forum members who have made millions here. Indeed, those that got in in the ground floor of the transition to capitalizim made a killing. I know many locals who have done very well. I am happy for them. But I am quite dubious how well I would do as a Westerner taking my complaint to the People's Comittee in a dispute with a local over a business contract. There are THEM and ther are US. Two very different distinction in any country when it comes to investing. Even in my country.
I know a very wealthy man that got his start in the drug trade here and switched that over to a very lucrative thing with his fingers in a little bit of everything. Me I do not know how to operate well in the "coffee money " arena where you pay to play. I would probably end up playing in a VNese prison yard or be 6 foot under.

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Ciambella ViP

3482POSTS

8 years ago

#48

Business is not my forte so I have nothing intelligent to contribute to the conversation, but these are what I see in my extended family:

A shirttail relative has her fingers in several pies in Vietnam -- stocks and bonds, two residential/rental buildings, a gold business (not jewelry store), and a license to run the lotto (with managers and employees working for her.) She's a Vietnamese-American who has been splitting the year between two countries for more than two decades. None of the businesses is under her name. She deals with the day-to-day and makes all decisions concerning the properties and businesses, but has a business partner-on-paper for whenever the occasion arises.

My niece owns 2 rental properties in Vung Tau, one huge combination of gentleman farm and private homes in Long Thanh, and a commercial service in Saigon. Again, nothing is under her name (they're in her sibling's name) even though she deals with the local officials face-to-face and they all know the business and real estate are hers. She's a Vietnamese-German who has been living full time in the country for the last 10+ years.

OTOH, all of the dozen or more relatives who are Vietnamese (no hyphenate) have their real estate and businesses in their own names.

What does that mean? I'm not certain, though I have a vague feeling that it's more problematic for people who are not "true" Vietnamese (foreigners who married Vietnamese, Overseas Vietnamese, and Vietnamese with hyphenate) to invest in the economy in concrete methods.

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Charlottesc Member

14POSTS

8 years ago

#49

I think there are different category of family type here! We are from UK moving from one country to another for the last 15 years, buying properties in UEA, HK, UK and here now. There has not problem so far, touchwood. as long as you do it properly even how negative one paints of the picture of Vietnam. We have worked hard as anyone do as expatriates. We now owned a condominium in District 2 next to future Metro line. All of our neighbours are Vietnamese and expat middle class (if I offend people, do apologise in advance, I know UK people do feel offend by addressing them in .. class, to me, I fin it is compliment). These group of people work hard and play hard. They are business people opening factories, banking, fund management, engineer .. There is no difference from other people where I live (starting Mauritius, Romania ... to N Cyprus and now here). We all have no problem of having our property in our name (no need to join own with Vietnamese) with the Sales Purchase Agreement in hand (SPA). If we have problem, we can deal directly but we have face no problem so far. I know friend who is dealing with local government daily as she work in a big Fund Management to invest land and what institutional fund do. I understand that most of the time you need to do extra thing in order to deal with business properly. You are working at the frontier market, so it has pro and cons. It happens in every country when one is in infantry , same as US, UK when it was in that stage of development. If you respect culture, do things as you are followed , use your common sense where you educated by your own country, I do not see a big problem which will get you into trouble. It is my personal comment. C

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Diazo Serial expat

948POSTS

8 years ago

#50

@ Charlottesc,
Report back in 10 years and let us know how your dream investment went in Vietnam. Perhaps you would enjoy the recent thread " I am going to tell you something you may not want to know" or something to that affect. Have you calculated the return on your investment? What would the cap rate be if you moved and rented out your condo?

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Charlottesc Member

14POSTS

8 years ago

#51

Dearest Diazo
I looked back my property 10 years from where we bought our Dubai property, no regret. You know how Emarati treated us no matter you are white (educated, expetise in field), yellow and any favourite color you could think of !!)you lived and invested there.
I do not think of getting money back in very short term, we do not flip property in a very short term, we do not speak ill of people when there was not a whole picture of one country you suppose to respect and suppose learn to tolerate. (that is your modern education where you got from suppose to teach you)
You do not think of getting out the money from the country where you think you just thought of getting their money as it is quick and it is not your own country.
Vietnam government is still doing thing to help; please give some patience, Samsung is here to produce Galaxy phone, many big company do help to train a big group of Vietnames IT qualified young student who face sexist issue to get into IT industry or even get into university to study IT. US friend who helps to get another group of female Vietnamese IT potential students and coordinate with RMIT to get train them and send to study in US for one year and bring them to Vietnam to contribute to this great potential city (be patient)

I know GDP here is slowing down around 5% and other figures if you are interested to know more.
C xxx

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Diazo Serial expat

948POSTS

8 years ago

#52

@ Charlottesc
The thread is about INVESTING in Vietnam. Not patience, understanding, enapathy etc. You are correct on the latter. Perhaps comments for another thread. But the things you say have Littleton do with investing. Perhaps in time investing here can offer some modicum of legal protection and transparency and the rule of Common Law. They are not yet there yet so this IS a treacherous place to INVEST.

Charlottesc Member

14POSTS

8 years ago

#53

Well respected I will meet with my friend to dig out more data, procedure of .. she works for fund management where the company listed in UK Stock Exchange. Get to work now. Good day. C

Jaygeefly Active member

26POSTS

8 years ago

#54

Diazo,

Based on what you are saying, then RE is a bad investment for local VN too? If foreign cannot do title search or have contract enforced, does it not apply to locals too?

Thanks

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Jaygeefly Active member

26POSTS

8 years ago

#55

Hi,

Based on your experience and knowledge, can a foreigner own in his own name, a free-hold title to, (1) an apartment (condo, flat) and (2) a landed house?

Note:
A) I am interest to buy from local VN owner, not developer.
B) I am interested in free-hold title with no restriction on reselling it later
C) I am interested in house with land.

Thanks in advance for you answers. Really appreciate it.

Thanks.

Jon

GuestPoster678 Guest

0POSTS

8 years ago

#56

There is NO freehold property ownership in VN. They say the new law allows for foreigners to own a freestanding home ( as not a condo development). But so far have found no one that was able to. And in a land where the laws change with the high tide tables I am not sure I would want to risk it anyway. I think your better off holding off until someone really knows what is going on. How old are you.....the wait could take a few hundred years.

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GuestPoster678 Guest

0POSTS

8 years ago

#57

Well I would argue that it is not a good investment for anyone. Especially in this unregulated RE bubble. But that is looking through the eyes of a jaundiced viewed person that comes from a country where real estate ownership has been allowed since I was a crossing guard for Jesus Christ when he attended grade school. But it is far better for a local citizen than a tourist foreigner. And that is what we are is tourist. Can you imagine a tourist going before the Peoples Committee with his legal grievance knowing nothin about "envelopes" etc. And the laws are so ambiguous and many quite unenforcible as are many laws here. It is just a different ball game for locals as opposed to foreigners. But even locals do not have the luxury of a real estate network of all that the West has e.g. appraisers, Tile insurance, freehold land ownership etc. You amortize the cost of a home over a 50 year period and add on the cost of building or acquiring then the 50 year lease is not renewed by the gov't. That would be one expensive home (a $500,000. home would have cost you $833 a month). You can rent far cheaper and invest that money elsewhere.

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Yogi007 Serial expat

948POSTS

8 years ago

#58

Hi there Vagabond..
I hope your sitting down.

If someone was silly enough to pay $500k for a windowless silo here and think over 50 years that would be expensive at $833 a month , they'll need to think again. Way more expensive than that.

Because if your invested the $500k on the markets or a Superannuation fund ,,they've averaged around 10% plus over the last 50 years. My fund is averaging 10% over the last 30 so that's pretty close to overall average.

If your apply the compound interest factor your money will double every 7 years .

SO.....that $500k upfront in 50 years will be worth ........
64,000,000. sixty four million bucks. Your money at 10% will double nearly every 7 years. It will double 7 times.

So your estate will be worth $64 million bucks if you invest wisely
OR three fifths of fuck all if you buy a house in Vietnam.

Check out market returns over the last 5O years , even for wars & GFC it's done Ok.

Anyone for one of those 50 year leases.........

Lease by the month , and pay peanuts, but keep a few nuts for yourself to be washed down with a cold beer while you think about what could have been.🤓

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GuestPoster678 Guest

0POSTS

8 years ago

#59

@ Yogi
Could not agree with you more. If I spelled out all the cost it would really confuse folks. Of course, I think for the most part you are referring to investing in the West. We have much more structured investment vehicles and there in transparency in the stock market. Here that is not so. Then to the dollar is the currency for international settlements so is more stable. But the rule of 72 still applies if you can find the investments here that would yield 10%.
But your point and my point is not a very good investment. I think when the gov't first allowed the public use of land here you could have made a ton. But now they are either at the point or close to the bubble bursting. I would hate to be the last man standing here and holding the bag on some overpriced property. When it would recover who knows. In the US we go through these cycles, but because we are a very mobile society we can bounce back pretty fast. Now I might be a buyer here once the bubble pops. Yo will be able to get some bargain prices I would suspect

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Yogi007 Serial expat

948POSTS

8 years ago

#60

Yeah it's a joke market.
I think they have a few problems on the horizon. Firstly, thy didn't learn from the 2010 property fiasco, now there doing the same again and the Banks are funding most of it by backing the flippers. When it all goes south, the Banks will be stuck with more toxic debt over "collateral" that is falling apart and getting close to worthless. Some of these places already are looking at the wrecking ball as the next stage of development.

You've got China, Japan and South Korea putting the brakes on offshore property investments only recently.

Then you've got Industry 4 , that will decimate a lot of the assembly work that done here and the Multi nationals will be scaling back. So FDI will reduce. There will be massive increases in unemployment following that as well.

Most of Vietnams GDP comes from electronic assembly, textiles, shoes & bag exports for multi nationals . It's mostly assembly work. Oil is over 30% of GDP and that's on the way out. Adidas are pulling out of China. RObots are making the shoes now a hell of a lot cheaper than the chows could, and those factories are at the market. The other brands are following suit. Vietnam is a major supplier of shoes....not for much longer though.

So with a drop off in exports, reduced FDI , the property bubble popping and the banks in more trouble than you can imagine.....what's the VND going to be worth. That could be interesting. 😳

Yogi thinks if you've got your "bickies" in safe haven dollar investments , things could be a bargain here in the not too distant future. The world bank is very concerned about the state of the Vietnamese banks. Forget the garbage in the media here......it's all warm & fuzzy stuff to make the locals feel as though things are going well.

So anyone thinking of buying had better think it through.

Yogi's got a funny feeling that this beer sitting beside me now is going to be a hell of a lot cheaper in the coming years. Houses will be too.

3 members reacted to this post

Jaygeefly Active member

26POSTS

8 years ago

#61

Thanks all for valuable insight. Just one important question? You mean even locals citizens and companies (developers) CANNOT own free-hold RE property?

GuestPoster678 Guest

0POSTS

8 years ago

#62

No there is no freehold in VN. The land is owned by the government and leased to whomever builds on it.

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Jaygeefly Active member

26POSTS

8 years ago

#63

Kupo,

What if I use a VN local as my nominee? (title is In nominee's name but we have private agreement that I am beneficial owner). Does such contract exist in VN?

Thanks.

Jon

GuestPoster678 Guest

0POSTS

8 years ago

#64

I@jajeefly
I think you should consult with a lawyer that specializes in real estate transactions. You seem very intent on going down this path. RE here is risky enough. Then to make a gentleman's agreement to put something in another persons name and then you own it makes it out of this world crazy. You should not be seeking advice on a lay person forum, but from someone familiar with todays law. Because tomorrows will change. Good luck

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GuestPoster678 Guest

0POSTS

8 years ago

#65

Vagabondone wrote:
No there is no freehold in VN. The land is owned by the government and leased to whomever builds on it.

Just to make it clear, there is no money paid to the government as per a normal lease.

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GuestPoster678 Guest

0POSTS

8 years ago

#66

Jaygeefly wrote:
Kupo,

What if I use a VN local as my nominee? (title is In nominee's name but we have private agreement that I am beneficial owner). Does such contract exist in VN?

Thanks.

Jon

There is a system where you can show that the funds are paid by you and the property is in the name of a local, namely a wife or family member. Would I go down this road, not easy to answer, as the law will side with a local before it sides with you.

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Yogi007 Serial expat

948POSTS

8 years ago

#67

Good morning Jaygeefly and welcome to the forum.

Are you a b***. ? Or a troll .

Your profile indicates maybe your Asian in appearance, and the profile says your a “Capital Market Expert and Entrepruener “.

Anyone with an IQ above room temperature would know the pitfalls of investing in Vietnamese realestate ,,let alone giving your money to a virtual unknown to spend it for you, in the hope they’ll give it back when you want it.

You’ll have your work cut out mate......good luck trying to b*** the b*** around here.

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GuestPoster678 Guest

0POSTS

8 years ago

#68

Very observant Yogi. I was wonder *** was up with this ***. He did not seem like the sharpest knife in the drawer. **** like him annoy me. I do hope he is able to find someone that will let him buy land in his name!!!

Moderated by Priscilla 8 years ago
Reason : bad language not allowed

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senwl Serial expat

820POSTS

8 years ago

#69

Guys,

Please refrain from name-calling and/or any personal attack on poster/s.

If you are not interested in any post /question, just ignore it and move to other threads.

Thank you.

GuestPoster678 Guest

0POSTS

8 years ago

#70

My apologies to the entire thread. My comments were out of line and uncalled for. I will unsubscribe from this debate.

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Jaygeefly Active member

26POSTS

8 years ago

#71

Thank-you Sewi. There are always people whose are ignorant so I am not offended by them. What I have is money and investment knowledge, and looking to invest for yield. What I don't know is the real estate property law, hence my questions.

I come from a free society where people have the right to express their opinion. But we are also a society that respect others and are tolerance of differrent point of views.

I do thank everyone for replaying to my questions.

Kupo Active member

61POSTS

8 years ago

#72

Jaygeefly wrote:
Kupo,

What if I use a VN local as my nominee? (title is In nominee's name but we have private agreement that I am beneficial owner). Does such contract exist in VN?

Thanks.

Jon

Sorry, I don't know enough about this matter to comment. However, I would strongly recommend against flipping RE as foreigner - even if your spouse is Vietnamese.

The only reason I flipped property with my wife is due to the fact that:

1. She's a VN/US citizen
2. She's also a software engineer (currently working remotely) with a great job in America
3. The land we flipped was relatively cheap (low six figures) with paid for residential building allowances and no eminent domain orders*
4. Lastly, she could take much more in a divorce...

*Fun fact: We went down to the local government office in charge of the land (địa chính) in those areas and had them look up the property on their computers.

It took two whole minutes to determine whether or not the land was under eminent domain (quy hoạch) and eligible for residential construction. We were even able to determine the exact construction allowances that had been paid for by the previous owner.

Jaygeefly wrote:
I come from a free society where people have the right to express their opinion. But we are also a society that respect others and are tolerance of differrent point of views.

As do I, however, this expectation only applies to the few people who are intelligent and articulate enough to calmly discuss a topic without feeling the need (or want) to insert their ill-mannered and crass remarks into the conversation.

Jaygeefly wrote:
There are always people whose are ignorant so I am not offended by them.

Good on you!

Jaygeefly Active member

26POSTS

8 years ago

#73

Thanks Kupo for sharing your experience. For full disclosure, In Canada, I use 6 different lawyers, from litigation to securities law to simply closing real estate sale transactions.
Each lawyer specialize in their domain, and I am wondering if you know of English speaking lawyers in VN that know the exact law and regulations as it pertains to real estate purchases and ownership for foreigners. Better yet, where would one find the published regulations?
Thanks.

Jon

Jon

Kupo Active member

61POSTS

8 years ago

#74

Hey Jaygeefly,

Unfortunately, I do not know of any lawyers specializing in RE. Your best bet would be to look up an established Vietnamese-Canadian (or just Canadian) firm that has offices in Canada and Vietnam.

Best of luck.

EDIT: Oh hey, I found a few international real estate law firms in Vietnam - can't vouch for them, of course.

https://www.hg.org/law-firms/real-estate/vietnam.html

Jaygeefly Active member

26POSTS

8 years ago

#75

Thanks Kupo. I will look at your link. You and others have been very helpful. I am no stranger to risk taking but its knowing what are the risks, how to reduce them, and knowing the worst case scenerio that allows me to take calculated risks.

Jon

QuidProQuo Serial expat

211POSTS

8 years ago

#76

Well, they have started raising taxes on pretty much everything now. The words on the street is that people haven't paid enough taxes to the government so now everything is going back into the system. Fixing your house will cost you a lot more today than it was in the previous years. It will get better because China is buying off or taking over everywhere in Vietnam. Soon you will find Vietnam becomes another colony of the Great China Empire.

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seb-living-in-vietnam Member

2POSTS

8 years ago

#77

Moderated by Priscilla 8 years ago
Reason : no free ads here please + register in the business directory
We invite you to read the forum code of conduct

senwl Serial expat

820POSTS

8 years ago

#78

Hi seb-living-in-Vietnam,

Please enlist your business in the Saigon business directory. We invite you to read Vietnam Forum Code of Conduct.

Thank you.

blunders Contributor

101POSTS

8 years ago

#79

Invest in Vietnam Real Estate?

Based on the current legislation, and going by what's been published about the Real Estate business, it would be an extremely risky investment.

paulpoh Active member

85POSTS

8 years ago

#80

Thank you all for sharing your experiences, didn't know there is no protection for foreigners buying property in Vietnam. I am aware of the Vietnamese short term mentality to hit and run. If I.have listened to my Viet buddy and invested in RE , will probably loose my pants. Cheers

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