The amended Land Law has been passed: Attracting additional capital from overseas Vietnamese

With the provision allowing overseas Vietnamese to buy houses, the amended Land Law will help develop the real estate market, increase demand, and attract capital from abroad.

The Land Law of 2013 made a distinction between land access rights for "individuals in the country" and "Vietnamese residing abroad." However, Article 4, Clause 3 of the amended Land Law stipulates that Vietnamese citizens residing abroad have the same rights related to land as Vietnamese citizens residing in the country.

According to experts, expanding land use rights for Vietnamese citizens residing abroad as Vietnamese citizens, including provisions on land use rights, creates conditions for them to directly participate in real estate transactions in the country, avoiding previous drawbacks. Previously, when wanting to use land in the country, Vietnamese citizens residing abroad had to rely on relatives in the country to conduct transfer transactions, leading to disputes arising from transferring ownership or managing land use rights.

At a seminar on home buying for foreigners and overseas Vietnamese in 2023, Mr. Peter Hong, Deputy Chairman of the Vietnam Business Association Overseas, said many overseas Vietnamese want to settle in Vietnam and invest but do not know how to own real estate.

According to him, there are about 5.5 million Vietnamese people abroad and over 1 million F2 and F3 generation individuals with Vietnamese parents or grandparents. Among them, over 20% are nearing retirement age, and most want to return to their homeland to live, invest, and reconnect with their roots in their later years.

A survey by the Ho Chi Minh City Real Estate Club (HREC) also shows that about 3 million overseas Vietnamese have a demand for owning real estate when returning to Vietnam, with the majority choosing Ho Chi Minh City.

According to the Vietnam Business Association Overseas, there are currently 600,000 - 700,000 overseas Vietnamese entrepreneurs and intellectuals with high qualifications (accounting for 10 - 12% of the Vietnamese community abroad).

Many of them want to return to their homeland to invest, do business, or live, so the demand for buying houses in Vietnam is very high. When the policy is more open, the remittance source can be used more in the real estate market. Currently, many overseas Vietnamese wish to settle in Vietnam, but they face difficulties in buying houses, not knowing where to buy, prices, and ownership rights.

Real estate legal expert Nguyen Van Dinh commented that this provision is consistent with the draft amended Land Law. Accordingly, Vietnamese citizens residing abroad with Vietnamese nationality have the right to do real estate business, buy, rent, rent to buy houses, and construct buildings like Vietnamese citizens residing in the country.

This will make it easier for Vietnamese citizens residing abroad to own real estate in the country, contributing to the development of the real estate market and increasing demand, Mr. Dinh analyzed.

Previously, to buy real estate in the country, many overseas Vietnamese had to rely on relatives to own the properties, leading to legal disputes due to lack of transparency. This amendment to the Real Estate Business Law has created equality between citizens in the country and overseas Vietnamese in buying real estate.

Assessing the demand for home buying in Vietnam among overseas Vietnamese, Mr. Vo Huynh Tuan Kiet, Director of Business at CBRE Vietnam, said that the demand for home buying among remittance recipients is very high. In nearly 10 years, with nearly 5,000 transactions conducted by CBRE, 45% were made by foreign and overseas Vietnamese customers.

"Over the past time, the supply of high-end housing has accounted for a large proportion. If conditions are relaxed to allow foreigners to own properties, it will boost demand in this segment significantly. Moreover, this is also a solution to attract skilled labor and talents. When talented individuals come to work in Vietnam and stay for the long term, they will surely have demand for accommodation, stimulating real estate investment," Mr. Kiet commented.

Economic expert, Dr. Dinh The Hien, also assessed that previously, Vietnamese people residing abroad without Vietnamese nationality did not have the same rights as Vietnamese citizens. However, the new provisions in the amended Land Law have created conditions for groups of overseas Vietnamese to invest in and buy houses.

According to Mr. Hien, current laws allow overseas Vietnamese to buy houses in Vietnam. However, the complex procedures and documents to prove Vietnamese origin have made overseas Vietnamese discouraged.

In addition, although the regulations allow overseas Vietnamese to buy real estate in Vietnam, many have to authorize relatives to be property owners. Therefore, Mr. Hien noted that the amendments to the Land Law and previously the Real Estate Business Law and the Housing Law have created equality between domestic individuals and overseas Vietnamese in real estate investment and business.

According to Mr. Nguyen Anh Que, Chairman of the Board of Directors of G6 Group, expanding the regulations will create equality between domestic citizens and overseas Vietnamese in land ownership. When they can buy houses and have the right to own residential houses and land use rights like citizens in the country, they will transfer money for investment, buying houses in Vietnam.

Thus, the real estate market will have additional large demand from overseas Vietnamese, providing more outlets for the supply of high-end housing currently exceeding demand. These groups will invest in building houses, construction projects for sale, lease, lease to buy; invest in technical infrastructure construction in real estate projects for transfer, leasing.