Vietnam’s Ministry of Planning and Investment this week issued a draft decree that, if approved, would ban individuals from investing in overseas real estate, reports the Phnom Penh Post. The regulation is specifically aimed at preventing Vietnamese nationals from acquiring foreign citizenship through real-estate investment, indicated the Ministry.
Reacting to the news, Nguyen Van Toan, Deputy Chairman of the Vietnamese Association of Foreign-Invested Enterprises (VAFIE), said a number of cases had surfaced in which individuals had attempted to participate in citizenship by investment programs in order to avoid civil liabilities in Vietnam, efforts, he said, that “must be prevented”.
Nonetheless, the Deputy Chairman indicated, “the regulation banning all individuals from investing in real estate assets sounds unreasonable and should be reconsidered. Other management measures would be more helpful.”
“I do not object to the solutions given in the [draft] decree but it is necessary to consider the effectiveness of the solutions, whether they can really prevent the abuse of policies to buy foreign citizenship,” the Deputy Chairman added.
Under the country’s current laws, Vietnamese individuals and organizations already need to obtain an offshore investment license issued by the Ministry of Planning and Investment to transfer investment money abroad. Although Vietnamese applicants spend an estimate US$2-3 billion a year on US real estate alone, a leader of the State Bank of Vietnam (SBV) in Ho Chi Minh City told Tuoi Tre News that no Vietnamese citizen has so far been granted such an official license due to “complicated procedures”.
The implication is that virtually all foreign real estate investment by Vietnamese individuals has taken place in a legal grey area, much of which for immigration purposes. In 2020, Vietnam ranked 1st in the Investment Migration Market Eligibility Index.
Do Nhat Hoang, director of the ministry’s Foreign Investment Agency, told Vietnam News that the decree aimed to create favorable conditions for investing abroad but also tightened management on overseas investments for purposes other than legitimate business.
According to the Ministry, Vietnamese overseas investment has increased sharply since 2015, characterized by more active participation from private companies and individuals in a number of sectors.
