Vietnamese real estate is firmly on foreign investors' radar, but it is also the sector with the most complex legal barriers: all land belongs to the entire people, foreign investors may not directly receive transferred land use rights, and every deal structure must pass through the gates of three major statutes — the Land Law 2024, the Law on Real Estate Business 2023 and the Law on Investment 143/2025. This guide maps the legal limits and five lawful deal structures for foreign investors developing real estate projects in Vietnam, together with practical pitfalls and a recommended roadmap. The detailed due-diligence checklist is covered separately in the real-estate DD checklist (T-427) — this article focuses on the legal framework and structuring logic.
Table of contents
- 1. Regulatory framework
- 2. The core limit: no direct acquisition of land
- 3. Four permitted real estate business forms for foreign investors
- 4. Land use rights: allocation, lease and the attached bundle of rights
- 5. Five deal structures in practice
- 6. Investment policy approval and market access conditions
- 7. Exit-side limits: subdivision sales and foreign ownership caps
- 8. Seven practical pitfalls foreign investors commonly hit
- 9. Recommended 8-step roadmap
- 10. FAQs
1. Regulatory framework
Four cornerstone statutes govern every foreign-invested real estate project:
- Land Law No. 31/2024/QH15 (effective 01/08/2024): determines how foreign investors may access land — allocation or lease — and the bundle of rights and obligations attached to each form. This is the first and most important gate.
- Law on Real Estate Business No. 29/2023/QH15 (effective 01/08/2024): lists the real estate business forms available to foreign-invested economic organizations, the conditions for project transfer, and the tightened rules on subdivision sales.
- Law on Investment No. 143/2025/QH15 (effective 01/03/2026, replacing the 2020 Law on Investment): sets out which projects require investment policy approval, the approving authority, and market access conditions for foreign investors.
- Housing Law No. 27/2023/QH15 (effective 01/08/2024): governs the residential segment — from the conditions for developing commercial housing projects to the foreign ownership caps on the sell side.
Depending on the project type, the Construction Law, the Law on Urban and Rural Planning, and fire-safety and environmental regulations also apply. This guide concentrates on the first three statutes; specialist regulatory layers should be reviewed during due diligence.
2. The core limit: no direct acquisition of land
This is the fundamental difference between domestic and foreign investors, and the origin of most "roundabout" deal structures in the market.
Under Article 45(8) of the Land Law 2024, cases not permitted to receive transferred or donated land use rights include "organizations, individuals… foreign-invested economic organizations where the law does not permit receipt of transferred or donated land use rights". No legal instrument currently permits foreign-invested economic organizations to receive transferred land use rights — the practical result is that a foreign investor cannot buy land directly from a land user the way a domestic enterprise can.
Practical consequences:
- You cannot sign a land use right transfer contract with households, individuals or Vietnamese enterprises to "assemble" a land bank for a project — such a contract is void as to the transferee.
- You cannot receive capital contribution in the form of land use rights directly from Vietnamese individuals or organizations in the ordinary domestic manner (capital contribution of land use rights to foreign-invested economic organizations is separately regulated by Article 42 of the Land Law 2024 — see section 5.5).
- Every lawful path to land runs through the State (allocation, lease), through the project (acquisition of a real estate project), or through the legal entity (share acquisition in the project company, joint venture).
Grasping this limit avoids the costliest mistake: paying a deposit under a "land transfer agreement" that the law will never allow to be performed.
3. Four permitted real estate business forms for foreign investors
Article 10(4) of the Law on Real Estate Business 2023 provides that foreign-invested economic organizations subject to investment conditions and procedures applicable to foreign investors may conduct real estate business in the following forms:
- Investing in the construction of houses and construction works attached to land use rights for sale, lease or lease-purchase through real estate projects, in strict compliance with the land use form, purpose and term prescribed by land law. This is the main door for foreign investors developing commercial housing projects, urban areas and office buildings for sale.
- Investing in the construction of technical infrastructure in real estate projects for transfer, lease or sublease of land use rights with completed technical infrastructure — in compliance with the prescribed land use form, purpose and term. Suited to the industrial park and industrial cluster development model.
- Leasing houses, construction works or floor areas in construction works for sublease — an operating model for lease exploitation that requires no project ownership.
- Receiving transfer of all or part of a real estate project to continue investment, construction and business — i.e., acquiring a stalled project from another developer (see section 5.2).
Compared with domestic enterprises (seven forms under Article 10(1)), foreign investors are excluded from: buying or hire-purchasing houses for resale, receiving transferred land use rights with infrastructure for transfer/lease, and leasing infrastructure-ready land use rights for sublease. In short, foreign investors must be anchored to a project — pure "land plot" trading outside a project framework is not permitted.
On the conditions for establishing a real estate business enterprise, Article 9 of the Law on Real Estate Business 2023 requires the enterprise to satisfy Government-prescribed owner's equity requirements and credit-debt and corporate-bond-to-equity ratios — investors should design the project company's capital structure from the outset.
4. Land use rights: allocation, lease and the attached bundle of rights
4.1. Land allocation with land use levy — a key change
The most notable change of the Land Law 2024 against the 2013 Land Law: under Article 119(3), "overseas Vietnamese and foreign-invested economic organizations are allocated land to implement commercial housing construction investment projects in accordance with housing law; [and may] use land arising from receipt of transferred real estate projects in accordance with real estate business law falling within the case of State land allocation with land use levy".
Previously, foreign-invested economic organizations could almost only lease land from the State; now, for commercial housing projects, they may be allocated land with land use levy — holding land use rights for the project term with the fullest bundle of rights. Allocation is carried out under Articles 124, 125 and 126 of the Land Law 2024 (auction, investor-selection bidding, or allocation without auction/bidding in cases prescribed by law).
4.2. Land lease — the most common form
Under Article 120 of the Land Law 2024, the State leases land with a one-off rental payment for the entire lease term or annual rental payments. For real estate projects, the one-off-payment lease is common because it carries a near-complete bundle of rights.
4.3. Rights and obligations attached to each form
Under Article 41 of the Land Law 2024, a foreign-invested economic organization allocated land with land use levy, or leased land with one-off rental payment for the entire term, enjoys the rights to: transfer land use rights and attached assets within the land use term; lease and sublease land use rights and attached assets; mortgage them at credit institutions licensed in Vietnam; and contribute them as capital.
Critically for M&A structures: Article 41(4) provides that a foreign-invested economic organization whose land use arises from a foreign investor's purchase of shares or capital contributions has rights and obligations corresponding to the land payment form — i.e., after acquiring the project company's shares, the new owner "inherits" the target company's land use rights intact. This is the legal foundation that makes the project-company M&A structure the fastest and cleanest route (see section 5.3).
Where land use levy or rental has been exempted or reduced, rights are narrowed under Article 41(5) — investors must check carefully whether a target company enjoys rental incentives, as this directly affects future transfer and mortgage capacity.
5. Five deal structures in practice
5.1. Direct land allocation / lease from the State
The investor establishes a project company in Vietnam, then participates in a land use right auction (Article 124, Land Law 2024) or bidding for selection of investors implementing land-using projects (Article 125) to be allocated or leased land for the project. This is the legally "cleanest" path but the slowest: it depends on planning, land-use plans, the locality's project bidding list, and open competition.
Suited to: large-scale projects, well-capitalized investors able to accept long timelines; particularly commercial housing projects seeking allocation with land use levy under Article 119(3).
5.2. Acquisition of a real estate project
Articles 39 and 40 of the Law on Real Estate Business 2023 allow a developer to transfer all or part of a project to another developer for continued investment, construction and business, on the principles that: the project remains within its State-approved implementation term; planning and project objectives are unchanged; the transferee inherits the transferor's rights and obligations and need not redo project dossiers, planning or construction permits if the project content is unchanged.
This is the classic "stalled project acquisition" structure, common when the original developer runs out of capital. Transfer conditions (Article 40) require the project to have investment policy approval, approved detailed planning, and satisfaction of land and financial-obligation conditions. A foreign investor receiving a transferred project that falls within the State-allocation-with-levy case continues to use the land in that form (Article 119(3), Land Law 2024).
Note: transferring a project differs from transferring land use rights — the contract object is the entire project (including land use rights, assets, rights and obligations), subject to Article 40 conditions. See the detailed DD checklist in T-427.
5.3. M&A: acquiring shares / capital contributions in the project company
Instead of buying the project, the foreign investor acquires shares or capital contributions in the Vietnamese company holding it. The project company's legal personality is unchanged — only ownership changes — so all land legality, permits and investment approvals of the project are preserved; under Article 41(4) of the Land Law 2024, the foreign-invested organization formed through the share purchase carries land use rights corresponding to the target's payment form.
Advantages: speed, no repeated land procedures, use of existing project progress. Drawbacks: "buying the whole company" means buying its hidden risks — tax debts, disputes, obligations to homebuyers (if units were pre-sold), bank mortgages. This structure mandates comprehensive legal due diligence before signing, and the pricing mechanism (net-debt adjustments, escrow, seller warranties) must be carefully designed.
On investment procedures: foreign investors acquiring shares/capital contributions must complete the approval for capital contribution, share or capital-contribution purchase under the Law on Investment in prescribed cases (e.g., ownership exceeding thresholds or projects in conditional market-access sectors). See the article on M&A approval for foreign investors (T-084).
5.4. Joint venture (JV) with a Vietnamese partner
The foreign investor contributes capital alongside a Vietnamese partner to establish a joint venture as the project developer. The Vietnamese partner typically contributes land use rights or local permitting capacity and relationships; the foreign investor contributes capital, technology and operating brands.
Advantages: leveraging the partner's land bank and procedural experience; sharing risk. The greatest risk lies in JV governance: disagreements over capital contribution timing, sales strategy, profit distribution — and above all the legality of the partner's land use right contribution (is the land "clean", mortgaged, eligible for contribution?). The JV contract and company charter must tightly regulate deadlock, buy-sell rights, and the partner's warranties on contributed land.
5.5. Receipt of capital contribution in land use rights
Article 42 of the Land Law 2024 separately regulates the case of a foreign-invested economic organization receiving capital contribution in land use rights: where the contributed rights originate from State allocation with land use levy or one-off-payment lease, the receiving organization enjoys the Article 41(3) bundle (transfer, lease, mortgage, further contribution).
This structure is less common than a pure JV but useful where the Vietnamese partner wishes to remain a shareholder contributing land in kind rather than selling land for cash. Due diligence points: the contributed rights must be eligible for contribution, financial obligations completed, dispute-free, and the valuation of the contribution must comply with asset-valuation rules.
5.6. Quick comparison of the five structures
| Structure | Speed | Land legal risk | Best fit |
|---|---|---|---|
| Direct allocation/lease | Slow | Low ("clean" State land) | Large projects, strong capital, tolerance for long timelines |
| Project acquisition | Medium | Medium (depends on legacy project legality) | Distressed projects at good prices |
| Project-company M&A | Fast | High if DD is weak (buying the company's risks) | Need for speed, preserving existing legality |
| Joint venture | Medium | Partner-dependent | Need partner's land bank + local experience |
| Land contribution receipt | Medium | Depends on contributed land legality | Partner wishes to contribute land as equity |
6. Investment policy approval and market access conditions
Foreign investors' real estate projects commonly require investment policy approval under the Law on Investment 143/2025. A notable change in Article 24: housing construction investment projects (for sale, lease or lease-purchase) and urban-area projects are subject to policy approval regardless of land use scale or population size where the investor holds land use rights through an agreement on receipt of land use rights or already holds land use rights under housing and land law. The approving authority (the Prime Minister or the provincial People's Committee) is allocated by Article 25 according to project type and scale — investors should check these two articles directly against their project's scale from the outset, as misidentifying the authority is a common cause of returned dossiers.
In addition, real estate business is a sector where foreign investors must satisfy market access conditions under Vietnam's international commitments (WTO, CPTPP, EVIPA…). The detailed conditions for each investment form are analyzed separately in the article on market access conditions for foreign investors (T-006) — investors should review this in parallel from the structuring stage, because a breach of market access conditions can invalidate the entire deal structure on investment-procedure grounds.
7. Exit-side limits: subdivision sales and foreign ownership caps
A correct entry structure is not enough — the investor must be able to exit.
Tightened subdivision sales. Under Article 31(6) of the Law on Real Estate Business 2023, developers may not transfer land use rights with completed technical infrastructure to individuals for self-built housing in wards, districts or cities of special, grade-I, grade-II and grade-III urban areas, nor in projects awarded through land use right auctions for housing development. In remaining areas, the provincial People's Committee decides based on local conditions. In practice, the "subdivide and sell" model is now viable almost only outside major urban areas — foreign investors developing projects in Hanoi, Ho Chi Minh City, Hai Phong, Da Nang, Can Tho and the like must build houses for sale, not sell bare plots.
Foreign home-ownership caps. Under Article 19 of the Housing Law 2023, foreign organizations and individuals may own no more than 30% of the apartments in a single condominium building; for separate houses (villas, townhouses), no more than 250 units within an area with a population equivalent to one ward. This directly shapes the sales strategy of projects targeting foreign buyers — and must be modeled in project finance from day one, not discovered after overselling past the cap.
8. Seven practical pitfalls foreign investors commonly hit
- "Agreements on receipt of land use rights" with someone who has no rights. Many investors sign deposits or cooperation agreements with parties claiming to hold land, only to discover the land is agricultural land not yet converted, mortgaged, or that the signatory is not the lawful land user. Rule: check the certificate, planning, mortgage/dispute status before signing — see the T-427 checklist.
- Confusing project acquisition with land acquisition. Signing a "land use right transfer" contract when the correct object is a "real estate project transfer" (Articles 39–40, Law on Real Estate Business 2023) — the wrong contract object makes registration impossible.
- Ignoring land financial obligations. Unpaid land use levy or rentals block transfer and mortgage rights (Article 45, Land Law 2024 requires financial obligations to be completed first). A target company in an M&A structure owing land rentals is a classic trap.
- Expecting full rights on annually-paid leased land. Only one-off-payment leased land (or allocated land with levy) carries the full transfer, mortgage and contribution rights (Article 41). Annually-paid leased land has restricted rights — directly affecting bank financing capacity.
- Not modeling the 30%/250-unit caps in the sales plan. A luxury condominium targeting foreign buyers can hit the ownership cap in the first sales wave — the excess portion cannot be certificated (Articles 19 and 22, Housing Law 2023).
- Misidentifying the policy-approval authority. Filing at the wrong level (province instead of the Prime Minister or vice versa) can delay a project by 6–12 months. Check Articles 24–25 of the Law on Investment 143/2025 from the start.
- Overlooking market access conditions. A deal structure perfect on land law but breaching foreign investors' market access conditions still cannot proceed — review in parallel per T-006.
9. Recommended 8-step roadmap
- Define the business model: sale, lease, lease-purchase or sublease operation — to select one of the four forms under Article 10(4) of the Law on Real Estate Business 2023.
- Review market access conditions under international commitments (T-006) before finalizing the structure.
- Select the deal structure from the five in section 5, based on speed, risk appetite and the actual land source.
- Conduct comprehensive legal due diligence per the T-427 checklist: planning, land legality, financial obligations, project permits, disputes, mortgages.
- Determine the investment policy approval procedure (Articles 24–25, Law on Investment 143/2025) and prepare dossiers in parallel with commercial negotiation.
- Negotiate and sign: project transfer agreement / share purchase agreement / JV contract — with pricing mechanics, conditions precedent, warranties and penalties drafted by counsel.
- Complete procedures: land registration, IRC/ERC adjustments, approval for share acquisition (where required), land financial obligations.
- Deploy and stay compliant on exit: construction permits, conditions for selling off-plan housing, foreign ownership caps, investment reporting obligations.
10. FAQs
Can a foreign investor buy land directly in Vietnam? No. Under Article 45(8) of the Land Law 2024, foreign-invested economic organizations are among the cases where the law does not permit receipt of transferred or donated land use rights. Land must be accessed via State allocation, State lease, project acquisition, share acquisition in the project company, or a joint venture.
Can a foreign investor develop a commercial housing project for sale? Yes, through a real estate project and in compliance with the prescribed land use form, purpose and term (Article 10(4), Law on Real Estate Business 2023). Notably, the Land Law 2024 allows foreign-invested economic organizations to be allocated land with land use levy for commercial housing projects (Article 119(3)).
What is the fastest structure for entering a real estate project? Project-company M&A (acquiring shares/capital contributions) is usually fastest because it preserves the existing legal entity and land legality (Article 41(4), Land Law 2024), but it demands comprehensive legal due diligence since "buying the company means buying its risks".
Do foreign investors' real estate projects require investment policy approval? Usually yes. Under Article 24 of the Law on Investment 143/2025, housing and urban-area projects are subject to policy approval regardless of scale where the investor holds land use rights through agreement or already holds them. The specific authority follows Article 25 — check directly against project scale.
How many units may foreigners buy in one project? No more than 30% of apartments in a single condominium building; no more than 250 separate houses within a ward-equivalent area (Article 19, Housing Law 2023).
Need a lawful deal structure from day one?
One wrong step — from choosing the wrong land-access form to misidentifying the approval authority — can delay a project by years or wipe out a deposit. Contact FLAT — hotline 0988424851 for deal structuring advice, project legal due diligence, and end-to-end investment — land — real estate business procedures for foreign investors.
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References
- Land Law No. 31/2024/QH15 (effective 01/08/2024)
- Law on Real Estate Business No. 29/2023/QH15 (effective 01/08/2024)
- Law on Investment No. 143/2025/QH15 (effective 01/03/2026)
- Housing Law No. 27/2023/QH15 (effective 01/08/2024)