VIETNAM: INVESTING IN REAL ESTATE SECTOR - Now or never!

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DR. OLIVER MASSMANN - Partner, General Director
DUANE MORRIS VIETNAM LLC
VIETNAM: INVESTING IN REAL ESTATE
SECTOR
Now or never!

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AGENDA
• COUNTRY BACKGROUND – ATTRACTIVE REASONS
TO COME IN REAL ESTATE MARKET IN VIETNAM
 WHAT IS HAPPENNING INSIDE VIETNAM?
 VIETNAM’S INTEGRATION TO REGIONAL AND
INTERNATIONAL ECONOMY
• LAW ON RESIDENTIAL HOUSING – WHAT’S NEW?
• HOW TO TAKE THE BEST ADVANTAGE OF THE
OPPORTUNITY?
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Welcome to the most dynamic country on this
planet : Vietnam!
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Vietnam’s super rich population is growing
faster than anywhere else….
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… and is on track to continue leading
the growth in the next decade

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Communist Vietnam Has More Millionaires
Than Capitalist Philippines
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Rapid urbanization
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Source: CBRE

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Rapid urbanization (cont.)
• By 2020, 50% of Vietnam’s
population (of 100 million)
will live in urban
areas/cities.
• ~374,000 additional
housing units will be
needed in cities every year
to cope with rising demand
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Source: World Bank

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VIETNAM’S INTEGRATION TO
REGIONAL AND INTERNATIONAL
ECONOMY
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Without TPP – What’s next?
• TPP-11?
• Trade Facilitation Agreement
• ASEAN Economic Community (covering 620
million people of 10 ASEAN countries)
• EU – Vietnam Free Trade Agreement
• Regional Comprehensive Economic Partnership
(RCEP) (covering 3 billion people in 16 countries
and 28% of global trade)
• Bilateral trade agreement with the United States?
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Key characteristics of AEC
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Legal certainty in new generation of FTAs
• As a result of global integration, Vietnam has to develop legal
certainty to be member of international trade organizations.
• Once the EU-Vietnam Free Trade Agreement (EVFTA) are
ratified, Vietnam will have more legal certainty than even
Germany.
• EVFTA implements investor-to-state dispute settlement
(ISDS) mechanisms – investors can claim in case that an investor
protection obligation has been breached
• Domestic courts cannot question the legal validity of the decisions
EVFTA secures a modern reformed investment dispute
resolution standard
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More investment – More demand for space
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More investment – More demand for space (cont.)
The manufacturing sector: primary beneficiary of FDI  more
demand for industrial parks and logistics/distribution
centers
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More investment – More people coming:
Opportunity for residential housing sector
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WHERE TO LIVE???

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Who can buy property in Vietnam?
• Vietnamese organizations, households or individuals
• Overseas Vietnamese
• Foreign entities who invest in project-based housing
construction in Vietnam
• Foreign-invested enterprises, branches, representative
offices of foreign enterprises, foreign-invested funds and
branches of foreign banks operating in Vietnam
• Foreign individuals who are allowed to enter Vietnam
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Who can buy property in Vietnam? (cont.)
• Get married to a Vietnamese
• and own a house on a freehold basis
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INVESTING IN VIETNAM
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WTO ANALYSIS OF LIBERALIZATION
OF MARKET ACCESS
• Typical restrictions: number of opened sectors, JV requirement,
limits on foreign-owned shares, permission requirement
Copyright Oliver Massmann - All rights reserved
Country Limitation of
market access*
Country Limitation of
market access*
Malaysia medium Myanmar high
Indonesia medium Cambodia medium
Philippines medium Laos medium
Singapore low India high
Thailand medium China medium
Brunei high Vietnam low

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Invest in Vietnam’s real estate before 2018
• When the EVFTA is very much likely to be ratified
• Investors who take this opportunity to invest now are
one step ahead others before competition becomes
fierce for Vietnam’s real estate market.
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Tips for making investment
• Due diligence well before making any investment
• Hiring international legal professionals because only
they can provide a liabilities insurance investors can
rely on
• Red book
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Questions & Answers
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DUANE MORRIS VIETNAM LLC
Thank you very much!
HANOI OFFICE HO CHI MINH CITY OFFICE
Pacific Place, Unit V1307/08, 13th Floor, Suite 1503/04, Saigon Tower
83B Ly Thuong Kiet, Hoan Kiem District 29 Le Duan Street, District 1
Hanoi, Vietnam Ho Chi Minh City, Vietnam
Tel.: +84 4 39462200 Tel.: +84 8 3824 0240
Fax: +84 4 3946 1311 Fax: +84 8 3824 0241
Contact email:
omassmann@duanemorris.com
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References (1)
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References (2)
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References (3)
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References (4)
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