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Thursday, January 17, 2008

Deloitte: Tap Vietnam's hot property mart

Vietnam allows 100 per cent foreign ownership of properties except for projects that are of national interest - (Bloomberg picture)

VIETNAM's real estate
and property sector is booming, and Malaysian investors can tap into this growing market which has been forecast to grow more than 50 per cent per year in the next 10 years.

Deloitte Vietnam senior tax manager Kevin Lam said following the big investments from Berjaya Kawat Group Bhd and Gamuda Corp last year, a few Malaysian companies are already in Vietnam conducting feasibility studies on the country's property sector.

"Real estate and property is the hot sector now in Vietnam, especially in key areas such as residential, office and city urban development," he said, adding that a prime land can cost as much as US$15,000 (RM48,900) per square metre.

Property appreciation too can easily double in a year's time, Lam told reporters in Petaling Jaya yesterday in conjunction with Deloitte's seminar on tax strategies for overseas projects and investments.

He said foreigners investing in Vietnam can also look forward to a reduction in corporate tax in the next few years from 28 per cent currently to a possible 25 per cent.

Vietnam, said Lam, is Asia's second fastest growing economy after China, with 8.4 per cent growth last year.

Political stability and competitive labour force makes it appealing to foreign companies, he said, adding that last year it attracted US$71 billion (RM231 billion) in foreign direct investment and Malaysia is one of the top 10 investors.

Excluding the US$10 billion and US$2 billion (RM32.6 billion and RM6.52 billion) investments committed by Berjaya and Gamuda respectively, there are now 232 projects by Malaysian companies in Vietnam valued at US$1.86 billion (RM6.06 billion).

Lam said recent positive changes in regulations governing the real estate market on top of the country's accession into the World Trade Organisation has stimulated the boom. Primary cities such as Hanoi, Ho Chi Minh City, Hue, Da nang and Hai Phong are among the focus of international real estate investors.

Lam said Vietnam allows 100 per cent foreign ownership except for projects that are of national interest.

"It is an open market like China and investors are queueing up at the door," he said.

Also present at the press conference were Deloitte Singapore senior tax manager Chester Wee, Deloitte Hong Kong's Lee Chee Weng and Malaysia's Yee Wing Peng.

By New Straits Times (by Roziana Hamsawi)

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