A growing number of foreigners reside in Vietnam with their foreign or Vietnamese families. Many of them are permanent residents, marry, have children, buy a house and acquire assets. For many, it is their only home. They naturally ask how to dispose of their properties when they die. We discuss these considerations for foreigners who live in Vietnam and whose Wills are governed by Vietnamese law.
Treaties on inheritance between Vietnam and the country of the testator’s citizenship may provide special guidance. It is a place to begin but there are no agreements, for example, between Vietnam and Australia, the United States, or the United Kingdom.
Legal Capacity to Make a Will
The legal capacity of a foreign testator must align with the law of his country of nationality or the law of his state in countries with multiple legal systems, such as the US. So, for example, the age at which a resident of New York may make, amend or revoke a Will is 18 years of age, but there are exceptions that can lower the age. In Vietnam, the minimum age is also 18 years of age; but there are also exceptions that lower the age.
Conditions for Heirs
Heirs, whether Vietnamese or foreign, must be alive when the inheritance is opened (ie, at testator’s death), or, if not yet born, must have been conceived prior to the testator’s death and subsequently born alive.
Inherited Assets
- If assets are movable, they may be divided under the Will.
- If the inheritance includes real estate located in Vietnam, the ability of a foreign heir to inherit a house in Vietnam will be determined by Vietnamese real estate law. The key requirements are:
- The beneficiary must have entered Vietnam (possessed of a valid passport bearing an effective visa or entry stamp issued by the Vietnamese immigration authorities);
- A foreigner may inherit and may own no more than a certain number of apartments or houses located in housing projects as stipulated in the Law on Housing.
In case an heir does not qualify to own a house in Vietnam, the heir may sell or authorize another person to sell the house and may remit the proceeds abroad. The heir may also give the house to a person entitled to own it.
Mandated heirs
There are rules on disposition among testators and heirs. For example, a husband must leave a mandated portion of his estate to his wife and minor children. These rules apply to a Will made in Vietnam and involving real estates located in Vietnam, regardless of whether the testator’s wife and children are Vietnamese or foreign nationals and regardless of whether or not they live in Vietnam.
Vietnamese law mandates a statutory share of inheritance, regardless of a Will, for the following individuals: deceased’s children below age 18, parents, spouse, and adult children of the testator who are incapable of working. These individuals as a group are entitled to have two-thirds of the properties, even if not named in the Will, even if not a Vietnamese citizen and even if they live abroad. This provision does not apply to any legatee who refuses the inheritance or who is disqualified for some reason. The regulations on mandatory inheritance do not apply to Wills made outside of Vietnam. But if a Will is made under Vietnamese law and attested before a notary in Vietnam and if the testator’s property involves real estate located in Vietnam, then the regulations concerning mandatory family inheritance will apply.
Foreign individuals may be required to commit that there is no mandatory inheritance in their home country when they sign a Will before a Vietnamese Notary. The notary may require the testator to provide documents issued by a competent authority in their home country to clarify who are mandatory heirs under the law of their home country, except that inheritance of real estate in Vietnam is governed by Vietnamese law.
Implementation in Vietnam of Wills made abroad
A Will made abroad must be recognized in order to be implemented in Vietnam. A Will validly made abroad and which is not contrary to Vietnamese law is enforceable in Vietnam. If a Will is valid under the law of the testator’s country, but if it contradicts Vietnamese law, the Will cannot be implemented in Vietnam. For a Will made abroad to be enforced in Vietnam, it must be in writing and must undergo consular legalization. Another issue is language. If a Will is made and signed in a language other than Vietnamese, it must be translated into Vietnamese and the translation must be certified by a notary in Vietnam.
Tax Related Inheritance
Under Vietnamese law, inheritance of securities, company capital, real estate, and similar assets (which must be registered) is subject to personal income tax in case the beneficiaries are Vietnamese or the assets are in Vietnam, even if the Will is made abroad. The tax, when it applies, is levied on the beneficiary, but many beneficiaries are exempt if the inheritance involves real estate. For example, there is no tax on the transfer of real estate, if the beneficiary is:
- a husband or wife;
- a biological son or daughter;
- an adopted child;
- a biological sibling;
- a daughter-in-law, son-in-law;
- grandparents and grandchildren
Conclusion
The process to recognize a foreign Will in Vietnam–ie, probating a Will made abroad — can be a time-consuming task fraught with legal challenges, involving the Will’s validity, the complexity of the assets involved, and the possibility of disputes and their resolution. Therefore, when possible, foreigners should consider making a separate Will in Vietnam that disposes of assets located in Vietnam and a foreign will for foreign assets.
Wills should be reviewed periodically and updated to reflect changes in personal circumstances, treatment of assets under Vietnamese law, and indeed in the laws on inheritance.
