Vietnam’s Law on Housing 2023 establishes a structured framework for mobilizing funds for housing development across various categories, including commercial housing, social housing, resettlement housing, and individual housing projects. The law outlines a diverse range of funding sources, including state capital, private capital, foreign direct investment (FDI), corporate financing, and public-private partnerships (PPPs).

While Vietnam welcomes foreign direct investment (FDI) in real estate, a key challenge in the Vietnamese real estate market remains the accessibility of foreign loans, particularly for commercial housing projects. Vietnamese laws prioritize domestic credit institutions for real estate lending, and foreign lenders face legal and practical barriers in financing domestic developers.

For commercial housing projects, capital sources primarily include developer equity, investment partnerships, bond issuances, pre-sales, and credit financing from domestic banks. Even though the markets accommodate certain workarounds for foreign financing such as bridging loans, corporate bonds, joint ventures, and structured finance via convertibles, the regulatory hurdles still linger such as collateral and security issues, SBV approvals, foreign ownership limits and others.

Stakeholders must carefully structure transactions and transaction documents to align with Vietnamese laws while maximizing financing efficiency for commercial housing development projects.