VIETNAM Law and Practice Contributed by: Tran Thai Binh and Duong Thi Minh Han, LNT & Partners
1. General 1.1 Main Sources of Law The main sources of real estate law include: • the Land Law 2024 (effective on 1 August 2024); • the Real Estate Trading Law 2023 (effective on 1 August 2024); • the Residential Housing Law 2023 (effective on 1 August 2024); and • applicable decrees or decisions issued by the gov - ernment or the Prime Minister, and circulars from the ministries that provide guidance for implement - ing or clarifying various provisions of the above laws. 1.2 Main Market Trends and Deals The real estate market is seeing increasingly dynamic transactions involving sales and purchases of existing real estate projects. However, asset transfers remain the primary mechanism for raising capital. With the new Housing Law 2023, the market is also expected to see a shift in the development of new social hous - ing projects. Investment in industrial parks appears to be enjoying a steady capital inflow. With the effect of the new Land Law 2024 on 1 August 2024, certain modifications have been made regard - ing the scope of business activities for foreign-invest - ed companies. These companies are now permitted to acquire land-use rights and properties attached on land in industrial parks from another entity. This allows capital flows within the industrial parks and have becoming a trend in the market. With the Government’s recent administrative overhaul, aimed at streamlining authorities and reducing invest - ment and business licensing procedures, many real estate projects that had been stalled for years due to land-related procedures and financial constraints are now being revived and brought to market. This development is expected to drive a significant uptick in real estate activity in the coming months. 1.3 Proposals for Reform The Law on Real Estate Trading and the Law on Residential Housing are under review by the State for reformations and amendments. Among other things,
the draft Amendment to the Real Estate Trading Law proposes that any real estate project must be subject to written approval by the competent authority (either the Prime Minister or provincial People’s Committee) before a project transfer agreement can be executed. If this proposal is adopted, the deal structure must be consulted to best protect the interests of either the seller or the buyer in a project transfer deal. The draft amendments (expected to take effect in 2026) focus on removing supply bottlenecks, enhanc - ing market transparency, and increasing the availabili - ty of affordable housing. Key provisions include tighter regulations on the sale of off-plan real estate, stricter controls on land subdivision for sale, and the further development of a comprehensive housing database – eg, building a uniform digital database for properties nationwide. Nevertheless, it will take time to observe how the laws are applied and how they adapt to the market. There is no concept of private land ownership in Viet - nam, as land is constitutionally considered to be under the “ownership of the people”. Instead, individuals and entities are granted LUR. Subsets of the LURs of a land user include the right to transfer (not to sell), capitalise, lease (or sublease), bequeath, exchange, gift, and pledge or mortgage such LUR, generally similar to ownership rights in other jurisdiction. A real estate owner typically holds ownership over assets attached to the land while also possessing the relevant LURs. As such, theoretically, acquiring land in Vietnam means acquiring some or all of the rights attached to it. Entitlement to all or some of the LURs by land users may vary, depending on LUR catego - ries, which are as follows. 2. Sale and Purchase 2.1 Categories of Property Rights Rights to Real Estate in Vietnam Land-use rights (LUR) • LUR with full payment of land use fee: Land-use rights are allocated by the State subject to full payment of the land use fee. In this case, the land
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