Renting commercial real estate in Vietnam - how to draw up an agreement

 27.04.2024

Every business is faced with the need to select commercial real estate for conducting activities. We will reveal the nuances so that renting commercial real estate in Vietnam doesn't become a reason for wasting time and money. And we pay special attention to details that are important for signing the contract.

Renting commercial premises in Vietnam - how to draw up the renting contract correctly

Renting commercial premises in Vietnam

  1. Be prepared the process of agreement won't happen quickly. Even if you find suitable premises, the process of agreeing on a lease contract will take time. Feel free to budget time for at least a month. If you get it done early, it's a big success.
     
  2. No deposits until contract is agreed upon. A favorite story is that someone has already inspected the property and they are going to make a deposit. The main rule is to first sign the contract, and then pay.
     
  3. Check the availability of documents for the property. The lease agreement must be signed either by the owner or a representative of the owner under a general power of attorney. There are very common cases when the property is rented to you by the brother, aunt, or uncle of the owner. And they give you their word of honor that everything is in order. And then the owners arrive and it turns out that you are occupying someone else’s house illegally.
     
  4. Check the property documents for the presence of not only the land plot, but also buildings. If you rent a plot without registered buildings, you will not be able to obtain any permits or licenses to conduct business. Even if landlords claim that you will get it, don’t believe it. They get the money - you're the problem.
     
  5. Be sure to check who will pay taxes on profits from renting the property. In 90% of cases in Vietnam, this will be the tenant. The tax in this case is 10% of the rental price. It must not only be paid, but also a declaration about it must be submitted. Typically, landlords pass this responsibility onto the tenant. Without a tax return, it will be impossible to include the rental amount in the company’s expenses.
     
  6. If the total rental cost per year does not exceed 5,000 USD, then the tax will be 0%. However, this does not exempt you from filing declarations.
     
  7. The usual rental terms are a deposit in the amount of 2 months' rent and payment of rent once every 3 months. There may be deviations in different directions, but this describes 80% of cases.
     
  8. Rental of production and warehouse premises in industrial zones (parks) of Vietnam
     
  9. Agreements valid for more than 3 years are certified by a notary. If you wish, you can also have an agreement valid for less than 3 years certified by a notary; it is inexpensive.
     
  10. Different cities in Vietnam have their own features for renting premises. For example, renting a space in Hanoi is a steeplechase race to see who can get a good place the fastest. Renting commercial premises in Ho Chi Minh City is more leisurely, and there is an opportunity to be really thoughtful about the contract. Rentals in Nha Trang and Da Nang are usually a tourist area. Here you can find the best option for good money.
     

Well, I want to sum it up with a banality: what is written with a pen cannot be cut out with an axe. Therefore, always put all agreements in writing and use the services of experts. It’s quite difficult to understand and grasp local nuances on your own; the button below is for you.

 

Our experts will advise you on all issues related to renting commercial real estate in Vietnam.

You can book a consultation by following the link below.

Renting commercial real estate in Vietnam

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