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July 16, 2007

New regulation to allow foreigners to buy property
Foreigners and foreign institutions in Hanoi and Ho Chi Minh City would be allowed to buy property in Vietnam under a new regulation pending approval from the Ministry of Construction, VNA reported.

Eligible foreigners include foreign investors in Vietnam and individuals who have contributed significantly to Vietnam's development and have been formally recognised by the President, the Government or the Vietnam Fatherland Front President for their efforts.

Cultural specialists, academics and scientists working in Vietnam will also be eligible, as will be spouses of Vietnamese citizens residing in Vietnam.

Foreign-invested businesses or organisations in Vietnam could also take advantage of the new regulation. Overseas Vietnamese have been allowed to buy property for the last six years.

Apart from papers proving eligibility, the regulations also stipulate that foreigners and foreign companies must have been in Vietnam for at least one uninterrupted year.

The Ministry of Construction said the regulation, if approved, would first be applied during a 3-5 year trial period in Hanoi and Ho Chi Minh City.

The change in ownership of property comes at a time when the Government is trying to encourage foreign investors to transfer their expertise and technology to Vietnam.

Many foreigners working here long-term have wanted to buy property, but legal hindrances barred them from owning property outright, so many have bought property through Vietnamese partners.

On Phu Quoc Island, for example, many foreigners have bought land and built hotels, restaurants and bars under the name of Vietnamese nationals.

Nguyen Manh Khoi, an official of the Construction Ministry, said, however, that only about 20 per cent of some 81,000 foreigners living in Vietnam would be qualified for property ownership if the proposal was approved.

Conditions for ownership could be discouraging, since the regulation requires that foreigners sell or transfer their real estate to another party after departing the country.

In addition, the regulations are still unclear about the procedures for foreigners to follow or the means by which authorities can control the movement of foreigners to other cities or provinces, or even their final departure from the country.

Christine Kieffel, an American businesswoman, was sceptical when asked about the prospect of owning a house or an apartment, saying that the paperwork was complicated and that she would have to ultimately sell the property anyway. VNA

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