Case Overview

A Singapore-based family office sought to invest in Vietnamese commercial real estate through a fund structure that would allow co-investment with institutional partners while maintaining confidentiality and minimizing withholding tax exposure on profit repatriation.

Challenges

Vietnam’s restrictions on foreign ownership of real property, combined with the absence of a dedicated REIT framework, required a creative multi-layer structure. The client also needed to ensure the structure was compatible with the Singapore-Vietnam Double Taxation Agreement (DTA) to reduce withholding tax on dividends to 5%.

ECOVIS Solution

ECOVIS Vietnam Law structured the investment through a Vietnamese joint venture company with a Singapore holding entity, utilizing the DTA’s reduced withholding tax provisions. The team drafted the joint venture agreement, advised on the foreign ownership registration under housing law, and coordinated transfer pricing documentation for inter-company service fees.

Outcome

The fund structure achieved the client’s target effective withholding tax rate of 5% on distributed profits, full regulatory compliance for the commercial property acquisition, and a governance framework acceptable to institutional co-investors operating under Singaporean MAS guidelines.