Guest expert Michael J. Aumock considers the prospect of moving to Vietnam and ponders its validity as a relocation destination.
Vietnam handled the Covid-19 crisis.
There is no additional descriptor like “Great” or “Like a Pro”. They just handled it. Period. As of May 13th 2020, less than 288, and no deaths. Handled.
So that got me to thinking… Is there more to Vietnam than meets the eye? Could it be a potential safe haven if (when) this happens again?
Based on my experiences, the answer is a hardy, “Yes!” … but with an asterisk.
So What’s the Asterisk?
If you have never spent any time in Asia, if you are not a world traveler and if you are completely inflexible in your routine, then I’m afraid Asia is probably not the right destination for you.
That’s just not how it works over here, and when you fight it you lose.
First, you will want to know about residency and visa rules
Short Term Residency in Vietnam
As a US citizen you can buy a 1-year, multi-entry visa for less than $200.
You have to leave the country every 90 days, but with 6 international airports and more on the way, it’s a fairly easy thing to do. And since you only have to clear a border, there are plenty of destinations within a 2-hour flight. You can go to BKK for dinner, Singapore for shopping or even up to China for Covid-20 when they release it later this year.
Moving to Vietnam: Long Term Residency
Long-term residency requires a little more thought and paperwork, but you can accomplish it with a few basic, albeit slow-moving steps (let your advisor handle this).
The easiest way to do it is to set up an LLC.
This takes about a month and depending on a few variables, assets and intentions for a total cost of less than $5,000 you can set up a company and apply for a Residency permit (valid for 1-5 years and renewable after that). There are a few different types and rules that go with them but nothing onerous or difficult to comply with. Simple bureaucracy stuff, and fairly straight-forward and able to accommodate both you and your family.
Homeownership is also available. There are a few restrictions, but with the worst-case scenario being a 50-year renewable lease, Vietnam can be a great value for money.
They drive on the right here, so it’s just like the US or Canada… with the notable exception that there are no visible rules, logic or regard for human safety. However, the roads and highway system is improving daily. If the roads terrify you beyond the pale you can always hire a driver for $750-$1000/ month!
Healthcare in Vietnam
Healthcare in Vietnam is getting better every day. Whilst still not up to western standards in many parts of the country, the hospitals in major cities are up to par with typical US hospitals.
The major challenge is language barrier. While most of the doctors have been educated abroad, the subtlety of the conditions that we wish to convey to doctors / nurses might get lost in translation. For the more risk averse there are private hospitals located in all the major cities that can handle all but the most perilous of procedures, and for about 5-10% of what it would cost in the West. Quite frankly, you could have your own physician “on-call” for what you pay for US health insurance monthly.
Travel in Vietnam
Travel is a wild card as of this writing, because so many of the rules, habits, carriers and routes will be subject to a complete reset after Covid-19 (mostly) clears. Predictions are useless at this time, but the ability to be flexible and adapt is your best bet.
Moving to Vietnam: recovery from Covid-19
The major benefit that Vietnam has, as we come out of this global pandemic is that it was already in flux. As Covid-19 started its global reign, Vietnam was in the middle of a tremendous growth curve to the point where almost nothing was the same as it was the previous year. Change is part of the routine here, and people are already in motion. Recovery is a just a change in direction, not a complete upheaval of the old way and reluctant acceptance of a new, lesser way.
The Vietnamese People
The Vietnamese people are an interesting and diverse group of people. Just like in Western cultures, the people from different regions have their own styles and traits.
Hanoi, in the north is a little more conservative, traditional and uptight. Danang is the cool, new jewel on the sea, having really popped up in the last 5 years along with Nha Trang, which is mid-coast, and a bit too Russo-Sino-touristy for most Westerners I have met, although the new marina might bring a new expat vibe that makes it more livable. Time will tell.
There are dozens of 2nd and 3rd tier cities along the coast where, for the seasoned Asian traveler, all of the needs discussed above can be handled comfortably for less than $100K / year. Double that for Ho Chi Minh City (called Saigon in the south) and you’ll still have money left for a first-class ticket home to North America for the family.
Overall, I think Vietnam is a great place to be. Its inexpensive, friendly, accesssible and its GPD is on the upswing. Not to mention the 1000 miles of beachfront to watch the sunrise with a cup of the world’s best coffee…
In my opinion Vietnam is a wonderful place to have in your short list of potential bolt-holes around the world. If you’re still undecided about moving to Vietnam here is a quick guide to the logistics:
Fact Finder: All you need to know about moving to Vietnam
What is the cost of acquiring residence status in Vietnam?
Temporary residence can cost $80 for one year, $100 for two or $120 for three. Temporary residence is limited to 5 years. A permanent residence card costs $100. To apply for permanent residence you must follow an application process that includes a diplomatic note, a note of sponsorship and a criminal record check (read more)
The annual cost of maintaining residence status in Vietnam
There is no annual cost.
Is there a minimum physical presence requirement to maintain residence status?
No – but there is a signed residence agreement for more than 183 days.
What is my ability to own property in Vietnam? Are properties freehold or leasehold?
When and how does tax residence kick in in Vietnam?
A foreign person’s liability to Vietnamese tax is determined by their tax residence status. If a foreigner is present in Vietnam for more than 182 days in a tax year, or the individual has a rented house or similar residence in Vietnam with a term of 183 days or more in a tax year, and cannot prove that the individual is a tax resident under another jurisdiction during the same period, then the individual is treated as a tax resident of Vietnam and is taxed on the individual’s worldwide income.
A tax non-resident of Vietnam is an individual who does not meet the above criteria for a tax resident and is subject to tax on Vietnam-sourced income only.
Vietnamese nationals with a regular residential location are deemed to be tax residents of Vietnam.
Foreign individuals from countries/territories without a Double Tax Agreement with Vietnam who stay in Vietnam for 183 days or more in the 1st calendar are required to report their pre-arrival income from the beginning of the year of arrival for Vietnamese tax purposes. For individuals from countries/territories with a Double tax agreement who stay in Vietnam for 183 days or more in the 1st calendar year, only.
What are Income tax rates in Vietnam? Are they Worldwide or domestic source?
Is there Estate and/or Wealth Tax in Vietnam? Worldwide or domestic situs property?
10% on inheritance or gifts
What are the Quality of Medical Facilities in Vietnam?
What is the rate of Covid-19 cases and deaths per capita in Vietnam?
What is the International school availability in Vietnam?
There are good quality schools available in the bigger cities such as Hanoi and Saigon.
About the author:
Michael is an American entrepreneur, writer, speaker and business leader in Asia with experience in everything from selling jets & operating marinas to importing and distributing 3D printers and ghost writing business books. His Decade in Asia has seen him in Thailand and Singapore as well as Vietnam. He sits on the United Nations ESCAP Taskforce for the Digital Economy so he can keep an eye on them…