VietNamNet Bridge - Many Vietnamese have bought properties in the US, but this has not generated cash flow from Vietnam to the US, according to the State Bank of Vietnam (SBV).

SBV is drafting a report for the government about the source of money Vietnamese use to buy properties in the US.

NAR has already released a report showing that in the time between April 2016 and March 2017, foreigners spent $153 billion to buy 284,455 properties in the US.

The amount of money Vietnamese spent to buy houses in the US accounted for 2 percent, or $3.06 billion. Vietnam is listed among 10 countries with the highest number of citizens buying houses in the US. 

According to SBV, under the Vietnam’s Forex Ordinance and Decree No 70/2014, the purposes of one-way remittances abroad by Vietnamese do not include payments for property purchases.

Under the Vietnam’s Forex Ordinance and Decree No 70/2014, the purposes of one-way remittances abroad by Vietnamese do not include payments for property purchases.

However, if individuals remit money for overseas settlement purposes, they may use the money to buy properties to serve the settlement. 

Credit institutions are allowed to provide remittance services to individuals who have one-way remittances, based on the checking of related documents.

The institutions, for example, would refer to notices by foreign schools about tuition and subsistence for students to provide remittance services to make payment for expenses.

Regarding remittances for health care services, commercial banks would refer to hospital fee invoices released by overseas hospitals to remit money.

The reports from credit institutions showed that the total amount of foreign currencies Vietnamese remitted abroad for transactions in 2015 was $2.26 billion. This included $523.7 million remitted for inheritance and settlement purposes, $307.76 for gifts and $1.4 billion for studying, healthcare, tourism and visits. 

In 2016, the amount of money remitted for the same purposes totalled $858.8 million.  In the first six months of 2017, individuals remitted $419 million.

Under current laws, if institutions and individuals remit money abroad to make investments overseas, including investment in real estate, they must comply with regulations stipulated in the Investment Law and related documents on outward investments.

To date, MPI has licensed 16 outward investment projects in the real estate sector in the US, totalling $228.8 million, accounting for 26 percent of total outward investment capital in real estate and 32 percent of total investment in the US.

According to SBV, the Vietnamese who bought houses in the US between April 2016 and March 2017 may include Vietnamese who live in Vietnam; Vietnamese who have lived for a long time in third countries; Vietnamese who had been living in the US for less than two years until now; and Vietnamese who study, work and visit relatives in the US and have fixed-term visas of less than six months.

RELATED NEWS

Money flows into real estate market as prices rise

What do real estate billionaires contribute to the economy?

Kim Chi