Starting a real estate business in Vietnam presents many opportunities, as the country’s economic growth and rising incomes are fueling demand for both commercial and residential properties. However, entering the Vietnamese real estate market requires a deep understanding of the country’s business environment, real estate culture, and the regulatory landscape.
The real estate business in Vietnam
The real estate market in Vietnam is rapidly evolving, driven by urbanisation, a growing middle class, and increased foreign investment. Vietnam’s real estate sector includes a mix of residential, commercial, and industrial properties, with strong demand for housing, real estate spaces, offices, and manufacturing facilities.
Just as the real estate sector has its own unique customer service expectations, the real estate market in Vietnam has certain cultural aspects that can be different from other countries.
Vietnamese Buyers Value Negotiation
Similar to shopping for goods, Vietnamese property buyers often expect to negotiate the price of a property. Even in formal transactions, price discussions are common, and prospective buyers or tenants may ask for discounts, upgrades, or added benefits. Offering promotional deals or bonuses, such as free property management services or furnishing options, can be an effective way to attract clients in Vietnam.
Service-Oriented Approach
Vietnamese consumers appreciate personalised and attentive service, and this extends to the real estate business. Whether you are selling residential properties or leasing office spaces, offering a high level of customer support is crucial. Property agents or consultants often assist potential buyers or tenants at every step of the process, from initial inquiries to closing the deal.
Growing Demand for E-Services
As with real estate, Vietnamese consumers and businesses increasingly rely on digital platforms. Many potential buyers and tenants conduct research and property viewings online before making any decisions. Establishing a strong online presence, including property listings on real estate websites and social media platforms, can be crucial for attracting clients. Offering virtual tours, e-contracts, and digital services will also appeal to tech-savvy buyers.
Box 1: The current state of Vietnam’s real estate market recovery
At the beginning of 2023, construction work on buildings in Vietnam was slowly winding down as the real estate industry ground to a halt. Hard hats were hung up and cranes ten stories high fell dormant leaving the cement shells of unfinished residential towers standing dark and empty–cold reminders that Vietnam’s real estate market was not in good shape.
This was due to a number of factors but in short, the Evergrande crisis in China in 2022, had led Vietnam to take a long hard look at its own real estate industry, and what it found was not good. The misuse of investor funds, particularly those acquired through the bond market, was rife, and a number of real estate firms were grossly over-leveraged. These revelations then went on to spook investors and consequently, the market took a sizable downturn…
Read more: Vietnam’s Real Estate Market Recovery 2024: Unpacked
Establishment procedures for real estate businesses in Vietnam
Real estate businesses in Vietnam with foreign ownership are generally established as a limited liability company either as a wholly owned foreign enterprise or a joint venture with a Vietnamese partner. This article provides a broad overview of establishment procedures with a more thorough, detailed technical guide available here: How to Form a Company in Vietnam: Technical Guide 2024
Wholly foreign-owned real estate businesses in Vietnam
A wholly foreign-owned real estate business in Vietnam allows a foreign investor complete control over a company’s operations. It is, however, generally more costly and time-consuming.
Specifically, before they can apply to register a business, foreign entrepreneurs who want to set up a wholly foreign-owned company will need to first apply for an Investment Registration Certificate (IRC) which they do not have to do with a local partner.
An IRC is basically required to ensure that foreign firms are not engaging in business in restricted or forbidden business lines. The conditions for approving an IRC are outlined in the Law on Investment which also states that IRCs should be issued in between 5 to 15 days. In reality, however, it is usually around 30 to 45 days.
Joint venture real estate businesses in Vietnam
With a local partner foreign business persons do not need to file for an Investment Registration Certificate, but rather the Vietnamese partner establishes the company and the foreign investor buys a share. In this sense, working with a local business partner can considerably reduce setup costs and application processing times.
Joint ventures, however, can be risky. A mismatch in work ethics and management styles can cause conflict in the workplace, particularly in cross-cultural settings. For example, whereas in Vietnam it is common to financially penalise staff for arriving late or for using their phone during work hours, in Western countries, this would be unacceptable. Understanding these little nuances of cross-cultural communication, in a joint venture environment, may be crucial to a business’s success.
Box 2: Investing in real estate projects in Vietnam
Investing in real estate projects in Vietnam offers significant opportunities for foreign firms, driven by the country’s economic growth, urbanisation, and rising demand for residential, commercial, and industrial spaces. However, navigating the market requires a thorough understanding of local regulations, investment structures, and cultural nuances.
Read more: Investing in Real Estate Projects in Vietnam for Foreign Firms 2024
Visas for foreign real estate business owners, operators in Vietnam
Foreign business persons who establish a real estate business in Vietnam are likely to qualify for investor visas. The length and cost of an investor visa will depend on the value of the investment. There are four categories of investor visas. They are:
Vietnam investor visas
Investor visas in Vietnam are known as DT visas (DT stands for đầu tư which translates to investor). There are four types of investor visas which vary in length depending on the value of the investment.
Investor visas in Vietnam 2023
| Code | Description | Length |
| DT1 | Investments over VND 100 billion (US$4.15 million), or for investment into ‘prioritised’ sectors, professions, or areas of Vietnam. | 5 years |
| DT2 | Investments between VND 50 billion (US$2.07 million) and VND 100 billion (US$4.15 million), or for investment into ‘prioritised’ sectors, professions, or areas of Vietnam. | 5 years |
| DT3 | Investor visa: issued for investors with total investment capital between VND 3 billion (US$125,000) and VND 59 billion (US$2.07 million). | 3 years |
| DT4 | Investor visa: issued for investors with total investment capital less than VND 3 billion (US$125,000). | 12 months |
Source: Vietnam Visas for Doing Business in Vietnam: Quick Read 2024
Choosing a location for a real estate business in Vietnam
Choosing the right location for any business can be the difference between success and failure. Firms and individuals looking to establish a real estate business in Vietnam should consider the best market for their style of real estate business–high-end real estate businesses are better places in tier-one cities like HCMC or Hanoi, whereas more budget-friendly real estate businesses will likely do better in smaller cities.
Market research
Market research is essential when choosing a location for a new real estate business in Vietnam. The right location depends greatly on the target market and therefore offering broad advice can be difficult.
It should be noted, however, that in both Hanoi and Ho Chi Minh City there are specific enclaves in which the bulk of foreigners live. In Hanoi that area is known as West Lake and in Ho Chi Minh City it’s District 1. Boutique real estate businesses may find these areas easier to penetrate with a more Western approach to selling property and properties designed with Western tastes in mind. In other areas, real estate businesses may need to double down on products catering more to local tastes.
Commercial real estate rents in Vietnam
Rental costs can be a significant factor in choosing the right location and these will depend on a broad range of factors, however, the following ballpark figures for Hanoi and Ho Chi Minh City from CBRE may be useful as a rough guide as to what to expect.
Average rent, ground/first floor, per-square-metre
| Q4 2023 | Q1 2024 | Q2 2024 | ||||
| CBD | non-CBD | CBD | non-CBD | CBD | non-CBD | |
| Hanoi | $162.00 | $30.00 | $163.20 | $30.60 | $180.80 | N/A |
| Ho Chi Minh City | $240.00 | $51.00 | $240.00 | $53.30 | $280.00 | $53.80 |
Source: CBRE Market Report
Commercial leases in Vietnam
The Law on Real Estate Businesses 2023 regulates leases broadly and this includes commercial leases. A typical lease agreement in Vietnam will have several key features:
- The length of the lease: In Vietnam a commercial lease typically runs for about five years;
- The payment terms: How often rent payments will be made and how. Typically, rent payments are made quarterly, however, they can also sometimes be monthly, every six months, or yearly; and
- The division of responsibilities: who is responsible for what and when between the landlord and the tenant.
These are just the broad strokes but are also the most pivotal components of the agreement. Other aspects of the agreement can generally be negotiated between the landlord and the tenant without too much direction from the real estate law.
Key regulations for real estate businesses in Vietnam
Law on Land
Last year, a revised Land Law passed Vietnam’s National Assembly. This revised law has the potential to have a huge impact on Vietnam’s land market and could speed up foreign-invested projects considerably. With this in mind, this cheat sheet runs through the key changes in the new Land Law and how this might impact foreign firms doing business in Vietnam.
Law on Real Estate Businesses
The Law on Real Estate Businesses, enacted by the National Assembly of Vietnam, marks a significant update to the regulatory framework governing the real estate sector. This new law aims to address various challenges within the industry by focusing on transparency, consumer protection, and sustainable development.
Law on Housing
Vietnam’s Law on Housing 2023, enacted by the National Assembly, introduces several key reforms and updates to the housing sector. The law aims to address current challenges, promote sustainable development, and enhance housing access and quality for all citizens.
Hiring real estate workers in Vietnam
Real Estate Agents and Brokers
Real estate agents play a key role in property sales and leasing. When hiring agents, it is important to ensure they are licensed and familiar with Vietnamese property laws, especially when working with foreign clients. Many agents work on commission, so clear agreements regarding compensation are essential.
Property Managers
Property managers oversee the day-to-day operations of residential or commercial properties, ensuring that tenants’ needs are met and the properties are well-maintained. Hiring experienced property managers is crucial for maintaining the value and profitability of real estate investments.
Project Managers
For firms involved in property development, project managers are responsible for coordinating construction, managing budgets, and ensuring projects are completed on time. Skilled project managers with experience in Vietnam’s construction industry are highly valuable.
Construction Workers
Vietnam has a large pool of construction labourers. While there are many workers available, the quality of work can vary. Foreign firms may want to work with local contractors to recruit construction teams or hire directly for key positions such as site managers and engineers.
Employee entitlements and benefits in Vietnam
A standard work week in Vietnam is 48 hours. An employee can work up to 40 hours of overtime in a month not exceeding 200 hours of overtime in a year. There is, however, an exception for some workers in fields like manufacturing whereby they can work up to 300 hours of overtime in one year.
Workers in Vietnam are entitled to 12 days of annual leave a year. There are also six public holidays in Vietnam that vary in length but all give workers an additional 11 days off.
Employees in Vietnam are also entitled to social and unemployment insurance. Employers generally need to contribute the equivalent of 21.5 percent of a local employee’s wage to these two social safety nets whereas employees contribute 10.5 percent. For foreign employees, it is only 20.5 percent and 9.5 percent.
See also: Vietnam’s Labour Law for Foreign Firms in 2024: Quick Read
Intellectual property protection
Protecting intellectual property in Vietnam can be challenging. It is common for local businesses to use brand names and logos of other more well-established businesses. As of 2022, Vietnam remained on the Office of the US Trade Representative’s Special 301 Report which labelled IP enforcement as ‘a serious challenge’ for the burgeoning nation. That said, it is a signatory to most international intellectual property treaties and it has made a number of key reforms in recent years to strengthen IP protections.
Trademarking a real estate businesses’ intellectual property in Vietnam
With respect to establishing a real estate business in Vietnam, there are a number of items of intellectual property that real estate business owners may want to consider trademarking. A unique product name, a brand name, or a company logo could all be the subject of a trademark application.
Note that Vietnam is a signatory to the Madrid Agreement and therefore, firms with trademarks approved in other countries that are also party to the agreement will automatically have their trademarks recognised in Vietnam.
Likewise, businesses that register a trademark in Vietnam will automatically have protection in the other countries party to the agreement.
Filing a trademark application in Vietnam
In order to apply for a trademark a firm must first complete an application that includes:
- A trademark registration declaration,
- An image of the trademark between 3cm x 3cm and 8cm x 8cm,
- A list of products and services that are to be registered;
- A power of attorney, if necessary, and
- Proof of payment of all necessary fees and charges.
Trademarks in Vietnam are then filed with the Intellectual Property Office of Vietnam (IPVN). It can take 12 to 18 months for a trademark application in Vietnam to be approved.
Fees and taxes for real estate businesses in Vietnam
New real estate businesses will need to register with the General Department of Taxation in order to pay their taxes and ensure they are tax-compliant. There are also a number of recurring fees and taxes in Vietnam that new real estate business owners should be aware of.
Business licence fees
Limited liability companies in Vietnam are required to pay a business licence fee annually. This must be paid by January 30. These fees depend on the registered capital of the firm.
Business licence fees, 2023
| Registered Capital | Fee (VND) |
| Less than 10 billion VND (US$415,671) | 2,000,000 (US$83) |
| Greater than 10 billion VND (US$415,671) | 3,000,000 (US$124) |
Source: Decree No. 20/VBHN-BTC
Value-Added tax (VAT)
The Value Added Tax in Vietnam is a consumption-based tax on goods and services in Vietnam. It is generally charged at the point of sale for retail businesses. This does not apply to real estate transactions.
Personal Income Tax (PIT)
Vietnam’s Personal Income Tax is levied on a worker’s wages in Vietnam. The amount to be collected is on a sliding scale, the more a worker earns the more PIT they pay. Employers are required to collect PIT on an employee’s wages and pay said tax to the General Department of Taxation each month. If approved by the authorities an enterprise may be able to make tax payments quarterly instead.
Corporate Income Tax (CIT)
Corporate Income Tax in Vietnam is the tax a company pays. The standard CIT payment is 20 percent of assessable income, however, on large investments foreign firms have been known to receive tax breaks. This tax is paid yearly though firms can make payments quarterly.
What’s next?
Vietnam’s business environment is dynamic and can change quickly. With this in mind, to keep abreast of changes in Vietnam’s real estate market, foreign firms operating in Vietnam should make sure to subscribe to the-shiv.