Mr. Quang, an overseas Vietnamese resident in Hong Kong for over twenty years, owns a Hong Kong company. That company holds 100% of an enterprise in Long An (a factory on leased land) plus a personal apartment in Ho Chi Minh City. At 68, he asked his lawyer a seemingly simple question: “When I pass, how do my children abroad receive these assets cleanly?” The answer runs through three layers of law: Hong Kong, Vietnam, and the tax treaty between them.
Layer one: Hong Kong — no estate duty, but the will must be valid
The good news first: Hong Kong abolished estate duty for deaths on or after 11 February 2006 under the Revenue (Abolition of Estate Duty) Ordinance 2005. Heirs pay no inheritance or estate tax in Hong Kong, and no estate duty clearance is needed for a grant of probate.
The caution: a Hong Kong will must satisfy the Wills Ordinance (Cap. 30) — the testator must be at least 18, the will in writing, signed by the testator with two witnesses aged 18 or above signing at the same time; a witness (or their spouse) must not be a beneficiary, or the gift to them may fail. For shares in the Hong Kong company, the will should name who inherits the shares — without it, intestacy rules apply, costing time and probate expense.
Layer two: Vietnam — land is the biggest bottleneck
Vietnam currently levies no inheritance or estate tax. The right to make a will is set out in Article 624 of the Civil Code 91/2015/QH13. But for real estate, the barrier sits in the Land Law 31/2024/QH15:
- Apartments and land use rights in Vietnam: heirs who are Vietnamese citizens (including overseas Vietnamese retaining citizenship) receive and register normally.
- Heirs who are foreigners, or overseas Vietnamese not eligible to own residential housing in Vietnam (Article 44 of the 2024 Land Law): no land certificate is issued — they only receive the value, realised by transferring or donating the inherited land use rights under statutory procedures.
So if Mr. Quang’s children hold foreign nationality and do not qualify to own housing in Vietnam, the HCMC apartment cannot be retitled to them — the family must sell or transfer it to realise the value. A succession plan must anticipate this scenario rather than discovering it at probate.
Layer three: holding through a Hong Kong company — shares instead of direct assets
The structural advantage: on Mr. Quang’s death, what passes in Hong Kong is shares in the Hong Kong company, not each Vietnamese asset. The Long An enterprise keeps its direct owner — the Hong Kong company — only the shareholder of that company changes. No retitling of individual Vietnamese assets is needed.
Still, check the Vietnam–Hong Kong double tax agreement:
- Article 13(4): gains from alienating shares in a company whose assets consist mainly of immovable property in the other state may be taxed where the property sits. If the Hong Kong company mainly holds Vietnamese real estate, Vietnam keeps taxing rights over the transfer.
- Article 13(5): alienation of 15% or more of a resident company’s share capital may be taxed in that company’s state of residence.
A clean succession framework
A complete plan for a case like Mr. Quang’s includes: (1) a Hong Kong will disposing of the holding company’s shares, executed per the Wills Ordinance; (2) a separate Vietnamese will or instrument for personally titled assets (the apartment); (3) an advance review of each heir’s nationality and housing-ownership eligibility under Article 44 of the 2024 Land Law — knowing in advance who can hold title and who only receives value; (4) a liquidity backstop — powers of attorney to sell assets where heirs cannot take title.
Frequently asked questions
Is inheritance taxed in Vietnam?
No. Vietnam currently has no inheritance or estate tax. But a later disposal of inherited assets (a resale) can trigger income tax and registration fees under the rules at the time — model that separately.
Can my foreign-nationality children take title to the inherited apartment?
Only if they qualify to own residential housing in Vietnam under the housing laws and Article 44 of the 2024 Land Law (e.g., lawful entry plus eligibility conditions). Otherwise, they receive only the value via statutory transfer or donation procedures.
With assets held via a Hong Kong company, are Vietnamese procedures needed on death?
The Hong Kong shares pass under Hong Kong law (probate). The Vietnamese enterprise keeps its direct owner, so no Vietnamese retitling arises — though representative or management filings may need updating.
Is a Hong Kong will effective for assets in Vietnam?
A Hong Kong will disposes of the Hong Kong company’s shares under Hong Kong law. For personally titled Vietnamese assets (like the apartment), execute a separate will meeting Vietnamese Civil Code formalities to avoid validity disputes.
FLAT Law Firm advises on cross-border succession planning: Hong Kong and Vietnamese wills, reviews of real-estate inheritance eligibility under the 2024 Land Law, and optimal holding structures. Contact us to build your family’s plan.
This article has been quality-reviewed by the FLAW AI Legal Council