Vietnam Commercial Rent Increase Rules and Market Practices

Commercial rental prices in Vietnam are primarily governed by the Civil Code 2015 (effective 1 January 2017) and the Law on Real Estate Business 2023 (effective 1 August 2024). Under Article 473 of the Civil Code 2015, the rental rate is determined by the agreement of the parties or by a third party at their request. If no agreement exists or the terms are unclear, the rate is determined by the market price at the time and place of the contract's conclusion. Rent adjustments are based on the principle of freedom of contract, and there is no commercial rent control.

Escalation Mechanisms

Market Practices

| Retail Space | 5-12% per year | 1-2 years | | Industrial/Factory | 3-7% per year | 2-3 years |

Lease Provisions to Include

1. Formula — How the increase is calculated
2. Effective date — When the new rate applies
3. Notice period — Typically 60-180 days
4. Cap on increases — Maximum limit (if any)
5. Rejection right — Right to terminate if the tenant disagrees with the new rate

Property Type Specifics

Offices

• Rent must be quoted, listed, and recorded in VND; quoting or recording rent in USD is prohibited for domestic entities under the Ordinance on Foreign Exchange Control 2005 (amended 2013) and Circular 32/2013/TT-NHNN.
• All transaction prices and price recordings in contracts within Vietnam must be conducted in Vietnamese Dong.

Retail

• May use base rent + percentage of revenue structures
• More complex escalation mechanisms

Industrial

• Increases tend to be stable and predictable
• Longer review periods (2-5 years)

Best Practices

1. Clear formulas — Prevent disputes at escalation time
2. Market research — Ensure competitive pricing
3. Cap clauses — Protect both parties
4. Early notice — Give tenants time for budget planning

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