CONDITIONS FOR FOREIGN INVESTORS TO CONDUCT REAL ESTATE BUSINESS IN VIETNAM – PART 1

In the context of Vietnam’s increasingly deep integration into the global economy through new-generation free trade agreements (FTAs) such as the CPTPP, EVFTA, and RCEP, the real estate market is becoming an highly attractive destination for foreign capital inflows. However, unlike standard manufacturing or commercial service sectors, real estate business activities are inherently tied to land resources—a unique asset type under the ownership of the entire people, represented and uniformly managed by the State as prescribed in Article 53 of the 2013 Constitution. This specific nature creates a distinct legal framework, imposing stricter conditions on foreign investors compared to domestic ones.

Foundational Legal Framework: A Sector with Conditional Market Access

The starting point for this entire legal analysis lies in the classification of business lines under the Law on Investment 2025. According to Clause 10, Article 3 of this Law, market access conditions for foreign investors are defined as the set of requirements that foreign investors must satisfy when investing in business lines specified in the List of sectors with restricted market access. Outside the scope of this list, foreign investors are granted national treatment (treated under the same terms as domestic investors).

According to Section B, Appendix I of Decree No. 96/2026/ND-CP, real estate business is listed under the List of sectors with conditional market access for foreign investors. The direct consequence is that foreign investors cannot automatically enter this sector; instead, they must undergo an appraisal process and satisfy the specific conditions published on the National Foreign Investment Information Portal.

Categories of Market Access Conditions for Foreign Investors

Conditions under Clause 3, Article 8 of the Law on Investment 2025

Clause 3, Article 8 of the Law on Investment 2025 stipulates that market access conditions for foreign investors comprise five specific groups:

• First, conditions regarding the charter capital ownership ratio of foreign investors in economic organizations. For the real estate business sector, current Vietnamese law does not prescribe a specific ownership cap, which means that, in principle, foreign investors can own up to 100% of the charter capital of a real estate enterprise in Vietnam.
• Second, conditions regarding the form of investment.
• Third, conditions regarding the scope of investment activities.
• Fourth, conditions regarding the capacity of the investor and partners.
• Fifth, other conditions as prescribed by Laws, Resolutions of the National Assembly, Ordinances, and Resolutions of the National Assembly Standing Committee.

Additional Conditions under Clause 3, Article 15 of Decree No. 96/2026/ND-CP

In addition to the market access conditions mentioned above, Clause 3, Article 15 of Decree No. 96/2026/ND-CP (supplementing Decree No. 31/2021/ND-CP) further stipulates that foreign investors must fulfill requirements regarding the ownership and trading of housing and real estate in accordance with specialized laws.

This establishes an organic link between investment law and real estate law: obtaining an in-principle investment approval is necessary but insufficient for foreign investors to conduct real estate business; they must simultaneously satisfy the specific conditions set forth in the Law on Real Estate Business 2023.

Permissible Scope of Real Estate Business

Another core element is the stratification of real estate business rights between domestic and foreign investors. Pursuant to Clause 4, Article 10 of the Law on Real Estate Business 2023 and commitments under the CPTPP framework (Annex NCM I-VN-34), foreign-invested enterprises (FIEs) are only permitted to engage in the following activities:

Regarding Residential Real estate (Housing)

Foreign investors are permitted to:

• Construct houses for sale, lease, or lease-purchase on land allocated by the State;
• Construct houses for lease on land leased from the State;
• Purchase or lease-purchase commercial houses within housing construction investment projects;
• Rent houses for subleasing; and
• Receive the transfer of residential real estate projects (in whole or in part) for further development.

Regarding Commercial Real Estate

The scope of activities is similar, including:

• Constructing commercial buildings/facilities for sale, lease, or lease-purchase;
• Purchasing or lease-purchasing commercial real estate for its intended utility/function;
• Leasing commercial real estate for use or subleasing; and
• Receiving the transfer of commercial real estate projects for further development.

Real Estate Services

Additionally, foreign investors are permitted to provide transaction support services, including:

• Real estate brokerage;
• Real estate trading floors (exchanges);
• Real estate consultancy; and
• Real estate management.

This group of service activities is not restricted under the commitments of the ASEAN Framework Agreement on Services (AFAS).