Draft Rule Allows Foreigners into Vietnamese Market Foreigners will be able to buy houses in Vietnam, under a regulation being drafted by the Ministry of Construction and other agencies. Under the draft, foreign homebuyers would be required to satisfy three conditions: (1) they are living and working in Vietnam; (2) they are authorized to reside in the country for at least one year; and (3) they buy houses for residential use for themselves and their families while in Vietnam for work-related purposes. The ministry also proposes five classes of foreign individuals and organizations eligible to buy homes. They include those directly investing in Vietnam; those who contribute to Vietnam, e.g., scientists and artists; persons married to Vietnamese citizens and living in the country; and foreign organizations which provide employee housing. The ministry has estimated that 81,000 foreigners lived and worked in Vietnam during 2004-2006 including 25,000 investors, 1,600 employees for international organizations and 54,000 working in other fields. The regulation will be implemented experimentally in Ha Noi and HCM City and other areas with significant foreign investment activities and high demand among foreigners for housing. The Ministry of Planning and Investment reported last month that almost US$4.37 billion in foreign direct investment (FDI) was pumped into the red-hot Vietnamese economy in the first five months of the year, FDI investment capital recorded a 25% increase over the same period last year and the number of newly licensed initiatives surged by 32%. Market observers have pointed to Vietnam’s improving business and investment environment and its adherence to international economic commitments as key drivers in attracting FDI. CB Richard Ellis Vietnam offers a variety of local and regional market reports.
U.S. Hotels Good Place for Investors to Check-In Major hotel markets throughout the United States witnessed positive growth in 2006 and are expected to see more of the same in 2007 due to increased corporate travel and a strong showing from the upper-end of the hotel market, according to the 2007 U.S. Lodging Report released earlier this month by Ernst & Young. The result for travellers may be sticker shock at the check-out desk, but foreign investors are eyeing these markets as a place to put their money. Noted in the report's section on global insights is that foreign investors, particularly those from emerging markets such as the Middle East, are increasingly the high profile players in the market. Hong Kong and India are also sources of significant foreign investment in the U.S. lodging industry. The 144-page downloadable report (6.1M PDF) offers Ernst & Young's assessment of the direction of the U.S. lodging industry, thoughts on key global industry trends, and analysis of the industry's major segments for 16 major metropolitan markets in the U.S.
Diplomatic Behavior in Real Estate REALTORS® working in the global marketplace often find themselves performing various types of diplomatic functions--serving as the bridge between two countries, two cultures and of course, the buyer and seller. A website designed to assist individuals in diplomatic posts can be a great resource for real estate professionals as well. eDiplomat.com includes a section on cultural etiquette around the world, with links to more than 50 country pages that detail etiquette on meeting and greeting, body language, corporate culture, dining and entertainment, dress, gift giving and more.
U.S. Free Trade Pact Spurring FDI in Caribbean Foreign direct investment in the Caribbean Basin is increasing, in part due to a U.S. free trade agreement with the region, according to the Overseas Private Investment Corporation (OPIC). OPIC says the Central America Free Trade Agreement-Dominican Republic (CAFTA-DR) laid the foundation for significant economic growth in 2006 in such nations as Guatemala and Honduras, and spurred strong foreign investment in the tourism and mining industries. In a sign of that positive growth, OPIC said exports from Central America in 2006 grew 10.4% from 2005 to 2006, to $20.4 billion. Investor interest is evident in not only the five Central American nations in CAFTA-DR (El Salvador, Honduras, Guatemala, Costa Rica and Nicaragua), but throughout the Caribbean Basin which encompasses all Central America countries and the island nations of the Caribbean. A report by the U.N. Economic Commission for Latin America and the Caribbean (ECLAC) indicates FDI for the region totalled $72.44 billion in 2006, a 1.5% increase over the $71.36 billion total in 2005, and a 9.8% increase over the $66 billion registered in 2004. Top regional recipients for FDI in 2006 were Panama, Costa Rica and the Dominican Republic.
U.S. Dollar Weakness Helps Spur Canadian Dollar On May 23 the Canadian dollar reached a 30-year high resulting from optimism that foreign takeovers of the nation's resource-based assets will fuel currency demand. The Canadian dollar traded at a high of 92.48 U.S. cents, the highest since Oct. 4, 1977, and also reached a 15-year high against the Japanese yen. The currency has gained 7.7% so far this year against the U.S. dollar. The Canadian dollar is not the only currency gaining on the U.S. dollar. According to Bloomberg, 11 of the 16 most-actively traded currencies advanced against the dollar on this same day. The strength of the Canadian dollar is coming on the heels of broader dollar weakness, and bolstered by gains in the euro. Globally, world economic expansion is poised to continue for the rest of the year as economists’ predictions remain robust for the second quarter in a row, according to the latest International Chamber of Commerce (ICC) and Ifo World Economic Survey. Economists expect even stronger economic growth in the second half of the year but noted regional and country specific variations in economic outlooks, with a slowing U.S. economy the dark cloud on the horizon. Although the rest of the world is not as dependent on the U.S. economic growth as it was a decade ago, negative spillovers could curb strong economic growth rates in other regions. Economists surveyed downgraded their outlooks for the U.S. for the remainder of the year. The quarterly Ifo World Economic Survey is conducted in cooperation with the International Chamber of Commerce.
Inheritance Laws Important for Retirees Buying Abroad When assisting retirees with buying property in a foreign country--whether for personal or investment use--REALTORS® should ensure that clients consider property inheritance issues. The issues can be very complex and vary by country, but the online Global Property Guide identifies some broad issues and questions that should be pursued with in-country legal counsel. Understanding the issues in advance will help buyers be prepared to work through the complexities. Among the questions to pose include which law applies (the law where the property is located or the law where the owner is a permanent resident), the ability to "gift the property" during the lifetime of the owner, and whether making a will is advantageous and the requirements for it to be recognized by the country’s courts. The Global Property Guide offers country-specific information based on local law sources, but as in all such matters, it is advisable to confirm this information relative to a specific transaction.
UAE Launches Investment Guide The United Arab Emirates (UAE) has launched its first investment guide to help facilitate foreign investment into the country. The "Investors' Guide to the UAE" attempts to compile essential information on the country's business environment in an easy-to-read format, according to the UAE's Minister of Economy. The Guide includes an outline of the country’s legal system, rules on how to set up a company and on foreign ownership, and a guide to doing business in each of the seven emirates, as well as detailing key industry sectors in which to invest. This comes at the same time UAE is preparing a law that would open the economy to greater foreign ownership. Although the UAE has been successful in attracting FDI, business surveys by groups such as the World Bank have identified the UAE’s legal requirements for a local partner as an impediment to higher levels of investment. The draft law is expected to go to the cabinet for approval by the end of the summer, and could go into effect by the end of 2007. Approximate figures by the country's Central Bank indicated that the net foreign direct investment inflows might reach US$12.8 billion in 2006, up 39% compared with US$ 9.2 billion in 2004. Initial press reports indicate that copies of the book will be distributed to foreign embassies in the UAE and will be available for purchase in stores. The UAE government website offers information about the country's business climate under the "Doing Business in the UAE" link. REALTORS® wanting to work in this market may also want to attend the CIPS course "Middle East/Africa and International Real Estate."
Report compiled by NAR International Operations, firstname.lastname@example.org.
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