Real Estate Inheritance concerning Foreign Elements in Vietnam
Nowadays, there are multiple cases in which foreigners or overseas Vietnamese inherit immovable properties in Vietnam while not entirely grasping the Vietnam’s legal regulations regarding inheritance. Therefore, CNC has prepared this article entitled Real Estate Inheritance Concerning Foreign Elements in Vietnam to provide our readers with comprehensive understanding.
The following basic content will be summarized for ease of understanding:
(i) Inheritance of real estate concerning foreign elements in Vietnam;
(ii) Applicable inheritances of real estate laws concerning foreign elements in Vietnam;
(iii) Feasibility of Foreigners or overseas Vietnamese inheriting real estate in Vietnam
(iv) Conditions for the recognition of wills concerning real estate with foreign elements in Vietnam
(v) Intestacy Inheritance of real estate with foreign elements
(vi) Procedures for inheritance and issues that foreigners and overseas Vietnamese should be aware of;
(vii) Expenses and taxes for inheritance of real estate concerning foreign elements in Vietnam.
Cases of inheriting real estate concerning foreign elements in Vietnam
Including the following cases:
Applicable inheritances of real estate laws involving foreign elements in Vietnam
Inheritance rights are determined based on the laws of the country whose nationality is borne by the person who bequeathed the assets prior to his/her death (Article 680 of Civil Code 2015).
If the person who bequeathed the assets either has multiple or no nationality, the applicable law is as follows (Article 672 of Civil Code 2015):
The right to inherit real estate is determined by the law of the country where such real estate is located, and in this particular case, the law of Vietnam.
Feasibility of Foreigners or overseas Vietnamese inheriting real estate in Vietnam
Article 626 of Civil Code 2015 provides that testators are entitled to:
The appointment of heirs is the right of the testator(s), who is/are completely entitled to bequeath their assets to any person upon their passing. As such, testators may not only write their wills in foreign territories but also bequeaths their assets to foreigners or overseas Vietnamese via such wills.
On the other hand, all individuals are equal in their right to bequeath their assets to other people and the right to inherit the estates by will or by law (Article 610 of Civil Code 2015). Therefore, all foreigners and overseas Vietnamese are entitled to their inheritance in Vietnam by will or by law.
However, ownership of real estate in Vietnam by foreigners and overseas Vietnamese is often treated differently, therefore inheritors of real estate, would be prudent to pay attention to the following issues:
Housing
Regarding housing, foreigners may only obtain Certificates of homeownership provided they are eligible for homeownership under the 2014 Law on Housing. Vice versa, foreigners are only allowed to receive the value equivalent to the house in question.
Article 8 of Law on Housing 2014 specifies that:
Moreover, the Law on Housing also prescribes other conditions about the limit on the number of apartments, as well as the duration of the homeownership. Regarding the conditions for homeownership in Vietnam by foreigners, the following articles provide a more comprehensive view of the matter:
See more: hhttps://cnccounsel.com/insights/vietnam-laws-on-foreign-ownership-of-property-key-changes
Residential Land
In accordance with Article 186 of the 2013 Land Law, overseas Vietnamese who are eligible for homeownership also have the right to associated residential land in Vietnam and are eligible for the Certificate of land use right for such land.
Foreigners and overseas Vietnamese who are not allowed entry into Vietnam and/or eligibility for Certificates of land use rights and other land-attached assets may only receive the equivalent value of the inheritance. However, said foreigners and overseas Vietnamese may transfer or donate such land use rights as follows:
Throughout our work in the past, CNC has received countless requests from Clients to provide solutions on how overseas Vietnamese receive inheritances in Vietnam, without documentation proving their Vietnamese nationality. In these cases, the identification of Vietnamese nationality and, if required, an application for Vietnamese passports would be necessary to prove their Vietnamese nationality, thereby granting them the rights of Vietnamese citizens, which include rights to real estate in Vietnam.
With respect to identification and proof of Vietnamese nationality, the following article provides more comprehensive information:
https://cnccounsel.com/insights/the-homeownership-of-overseas-vietnamese-in-vietnam
Conditions for the recognition of wills involving real estate with foreign elements in Vietnam
General principle:
The will is deemed to be valid if and when the following conditions are satisfied (Article 630 of Civil Code 2015):
Wills made by overseas Vietnamese: the will must be certified by a Vietnamese consular or diplomatic representative mission in the country of residence (Article 638 of the Civil Code).
Therefore, in cases of overseas Vietnamese, the will may be made at the consular or diplomatic representative mission in their country of residence. Such will is considered effective and valid in Vietnam if the above conditions are satisfied.
Wills made by the foreigners
The Law of Vietnam allows foreigners to make wills both in Vietnam and in foreign countries, even when the will involves real estate in Vietnam. However, for the will to be effective in Vietnam, the form of the will must be consistent with the law of Vietnam and the legal personality of the testator must be consistent with the law of the country of nationality.
The form of the will is determined by the law of the country where the will is made (Article 681 of Civil Code 2015). The form of will is recognized in Vietnam if it complies with the law of one of the following countries:
If the will is made by foreigners or the inheritance right is determined by the judgment/decision of foreign courts, the heirs must make a request for recognition and enforcement of foreign courts’ judgments/decisions in Vietnam (Article 425 of Civil Procedure Code 2015).
Procedures to request recognition and enforcement of foreign courts’ judgments/decisions in Vietnam
Intestacy Inheritance of real estate with foreign elements
If the inheritance bequeather passed away without leaving any will or leaving an invalid will, the real estate will be determined and distributed in accordance with the law. In such cases, the following principles are applied:
Procedures for inheritance and issues that foreigners and overseas Vietnamese should be aware of
Upon confirming their inheritance right, is it necessary for heirs to perform the following procedures to exercise their inheritance right
Step 1: Document Preparation
These are the fundamental documents that are required for inheritance procedures in general and inheritance of houses and land in particular. Depending on the specific circumstances, the required documentation may differ.
Step 2: Announcement of inheritance via posting
Step 3: Declaration of inheritance receipt, inheritance distribution
Step 4: Register changes in ownership of real estate
Once the inheritance document is notarized, the testator performs the procedures for property rights registration at the land use right registration division of the Department of Natural Resources and Environment of the district in which the real estate is located.
From our experience, overseas Vietnamese or foreigners often encounter obstacles in performing these procedures due to not being present in Vietnam for a sufficient period of time. Outlined below are two methods by which overseas Vietnamese and foreigners may carry out the procedures without actually being present in Vietnam for a long period of time.
Expenses and taxes for inheritance of real estate involving foreign elements in Vietnam.
Personal income tax (PIT)
Case 1: PIT exemption
Tax is not to be applied on Income from receipt of inheritances or gifts that are real estate (including houses and off-plan buildings according to the law on real estate trading) between the following individuals:
Case 2: Liable for PIT – Personal Income Tax
Registration fee
Case 1: Registration fee exemption
According to Article 9.10 of Decree No.140/2016/ND-CP, when the competent authorities issue Certificates for transfer of land use rights, homeownership, and other land-attached assets for land with a house, inherited land under the name of inheritance, such transfers are exempted from the registration fee, provided that the transfer is made between the following individuals:
Case 2: Liable for registration fee
In addition to instances of registration fee exemption, the heirs who are granted the Certificate must pay the registration fee.
Registration fee rate payable: 0.5-percent (0.5%) of the value of the real estate.
Further support:
We are eager and honored to receive any requests for support pertaining to the receipt of inheritance involving foreign elements in Vietnam. We will do our very best to ensure that the receipt of inheritance is completed promptly, legally, and efficiently.
Inquiries may be submitted by phone or by email via the information below:
Nguyen Thi Kim Ngan | Partner
Bui Mai Anh | Assosiate
T: (+84-28) 6276 9900
CNC© | A Boutique Property Law Firm
The Sun Avenue, 28 Mai Chi Tho Boulevard, An Phu Ward, Thu Duc City,
Ho Chi Minh City, Vietnam
T: (+84-28) 6276 9900 | F: (+84-28) 2220 0913
cnccounsel.com | contact@cnccounsel.com
Disclaimers:
This article has been prepared and published for the purpose of introducing or informing our Clients and potential clients on information pertaining to legal issues, opinions and/or developments in Vietnam. Information presented in this article does not constitute legal advice of any form and may be adjusted without advance notice.
