Is Ho Chi Minh City real estate being used for money laundering?

The Ho Chi Minh City Department of Construction (DoC) has asked real estate companies, brokers and trading floors in the city to strengthen preventive measures against money laundering and terrorist financing and said that they intend to monitor financial transactions related to real estate.

The DoC said that companies must follow all relevant government regulations related to the identities of customers and that it is the responsibility of real estate companies to update customer information, reviewing transactions and carefully monitoring transactions by high-risk customers.

Real estate companies have also been told that they must send reports to the Department of Housing and Real Estate Market Management under the Ministry of Construction and the State Bank of Viet Nam’s Anti-Money Laundering Department on suspicious transactions and reports on cash transactions that are valued at $12,800 USD (300 million VND) or more.

The DoC also asked for real estate firms to send reports on national risk assessment on money laundering and terrorist financing at their own organisations to the DoC by September 15th so that the DoC can review and analyze data from the real estate companies. 

The DoC requested its construction inspectors to strengthen inspection and examination at real estate companies, ensuring compliance to laws on the prevention of money laundering, and sending reports to the DoC.

According to a report by the People’s Committee of Ho Chi Minh City, in August the city saw 28,465 newly licensed businesses with total registered capital of $19.6 billion USD (456 trillion VND), and that real estate companies were 7.3% of the companies registered. 

However, in terms of registered capital, real estate related companies accounted for 39.6% of the total registered capital, followed by construction companies with 17.3% and then wholesale and retail businesses.

Regarding the development of Foreign Direct Investment (FDI) enterprises, HCMC granted new investment registration certificates to 816 projects in the period of January ~ August, with real estate business contributing the highest capital proportion at 33.2%.