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Policy on Viet Kieu housing needs to be uncorked
Supporters of a more liberal regime for home purchases by overseas Vietnamese (currently under consideration by the National Assembly) point out that if ‘Viet Kieu’ believe they can purchase houses in Vietnam more easily, it will attract more investment and stimulate the domestic real estate market.
Big channel for attracting investment
Do Quan, an executive of the Viet Kieu Chau Au Village project in Hai Duong province near Hanoi, said that the project has mobilized 40 percent of its total investment capital from overseas Vietnamese. Quan strongly supports Government policies to create favourable conditions for Viet Kieu investors to return to Vietnam to make investment and do business.
Though the Viet Kieu Chau Au Village project has been considered a success, Quan is worried that it will be more difficult to call for investment in the future, if Government policies do not give strong support.
Do Khai is a businessman who specializes in importing materials from China for resale to Polish importers. Khai owns four or five houses in Poland.
“I feel sad that I still cannot do more for Vietnam with my business,” he said. “If the housing policy were more open, I would have purchased houses in Vietnam rather than the houses in Poland.”
“If the house purchase regime becomes more favourable, the foreign currencies Viet Kieu investors can earn will surely go to Vietnam instead of being invested in other countries,” Khai added.
In 2000, Khai returned to Vietnam for six months to seek business opportunities. Khai intended to open supermarkets and build workshops in that year. However, he canceled the business plan because he was reluctant to ‘go through many doors’ of government agencies to get the needed permissions.
Only in 2005 did a friend persuade Khai to contribute capital to the formation of Vinapol Company at An Khanh new urban area near Hanoi, and he began to pay ‘a bit of attention’ to the Vietnamese real estate market.
There are probably many investors like Khai, who really want to make investment in Vietnam, but still hesitate to do that until they see policies becoming more open.
Worries that should not exist
When discussing the policies on allowing Viet Kieu to buy houses in Vietnam, some people expressed their worries that an overly open policy may give Viet Kieu the ‘tool’ to speculate in houses and control the real estate market.
However, Hoang Anh Tuan, CEO of the Vietnam Minerals Resources, Power and Environment Corporation (VMPEC), is sure that it is not worthwhile to worry about that. “More open policies will only help the market rather than doing it harm,” he said. He explained that when Vietnam’s policy on Viet Kieu home purchase rights becomes more liberal, it will end the situation of Viet Kieu purchasing houses under other people’s names, and thus there will be fewer disputes relating to ownership of real estate assets.
To Viet, a wine testing expert who returned to Vietnam after 20 years of living in France, has been running his Vietnam-France wine company here for the last two years.
“Vietnamese policy makers are wrong if they think that the Viet Kieu community’s financial capability is very powerful, capable of big impacts on the domestic real estate market. In fact, not all Viet Kieu have enough money to purchase houses in Vietnam, because houses in Vietnam are expensive, nearly the same as in France,” Viet said.
“Further, it is domestic investors rather than foreign investors who are speculating,” he added.
To date, Viet Kieu Chau Au Village project remains the only 100 percent Viet Kieu invested housing project that has been realized in Vietnam. It is considered as the vanguard project of Viet Kieu investment in the real estate sector.
In other housing projects, Viet Kieu only made capital contributions to the joint ventures with domestic investors. Real estate traders count about 10 projects in which Viet Kieu plan to invest. They also said that it will take much more time to see the projects becoming realistic, simply because Viet Kieu investors still wait to see the Government implement a truly open policy of attracting investment in the real estate sector.
In 2008, Vietnam received $8 billion worth of kieu hoi(overseas remittances), 19 percent more than in 2007.
It is estimated that there are 3,000 businesses which have Viet Kieu capital investment. Sixty percent of the projects established by Viet Kieu have been running profitably.
(Source: The Committee for Overseas Vietnamese)
Pham Huyen
vietnamnet
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