Foreign investors will be restricted to 30 percent ownership of real estate projects in Vietnam’s future special economic zones if a new draft law is approved, despite government promises of added incentives to attract overseas investment. The cap is the same as the one currently imposed across the country.
The Law on Special Economic and Administrative Units, which is being drafted at the moment, would grant foreign investors 99-year leaseholds on properties in new investment areas, almost twice the 50-year terms granted elsewhere in Vietnam.
But a major barrier remains as the law would only allow foreigners to buy up to 30 percent of an apartment building or resort project in these areas, said Tran Huy Dong, director of the Economic Zones Management Department at the Ministry of Planning and Investment. The limit is to guarantee security and prevent acquisitions by foreigners in special economic zones.
He said the heads of these zones will have to consult the Ministry of National Defense and the Ministry of Public Security before granting any land to foreign investors. However, the policy will be open to changes depending on investors’ demands. Vietnam is preparing to develop special economic zones in the northern province of Quang Ninh, the central province of Khanh Hoa and the southern resort island of Phu Quoc.
The government has cast them as major investment magnets along the lines of Singapore and Hong Kong. The investment ministry said that investors in these special zones will receive greater incentives and fewer restrictions than in Vietnam’s 18 existing “normal” economic zones, and they will be free from local regulations. Casinos have been approved in these zones, which will be the first in the country to be licensed to receive Vietnamese citizens.
Phung Quoc Hien, vice chairman of the legislative National Assembly, even suggested opening “red-light districts” in these zones at a meeting earlier this month. Life has such realistic demands. We’ve got to go with the flow and work out an appropriate management mechanism.
This draft law is expected to be presented to the National Assembly in May next year.