Indochina Land is responsible for developing the exclusive Nam Hai resort-style property in Hoi An where investors have the option to include their property in the resort rental pool and generate a current annual return of about 5 per cent when they are not in residence. The company is also involved in several prestigious developments including Indochina Riverside Towers and several hotel and golf resort developments. Mr Fannemel said the company helped investors to purchase properties through an offshore company.

Properties located within the Nam Hai five-star resort sell for between US$1million and more than US$2million. The property developer is also building a luxury residential villa, the Evanson Hideaway & Six Senses Spa, in Con Dao Island.

Mattias Lamotte, a Hong Kong-based businessman and an investor in the Nam Hai development, said equivalent beachfront properties in Bali or Thailand were considerably more expensive than in Vietnam.

'Part of my Nam Hai investment strategy is based on the belief that infrastructure, including regular direct flights to Danang will improve significantly over the next three to five years and that the price gap for equivalent properties in Vietnam and elsewhere will narrow,' he said.

Compared to average property prices in other popular locations such as Amanpuri in Phuket, Thailand, which is priced around US$12,000 per square metre, The Setai in Miami, Florida at US$20,000 per square metre and Amanyara in the Turks and Caicos Islands priced at US$12,500 per square metre, he said the Nam Hai was competitively priced at US$3,000 per square metre.

Marc Townsend, managing director CR Richard Ellis, Vietnam, recommends that investors who are considering buying property should only deal with developers with a track record. They should also take into account leasing and resale potential, monthly service charges and management fees.

'Investors should check amenities: quality properties and [properly managed] units with views nearly always have a display unit,' said Mr Townsend.

He said the Vietnamese Government's Decree 84 Progressive Land Reform act introduces useful amendments to the country's existing land regulations. For example, the New Land Use Right certificate extends the land use from 50 years to 70 years.

Decree 84 also lists circumstances in which the government will assume responsibility of land clearance to transfer the land to investors to speed up the development process and availability of stock to the market. In addition, foreign developers can now be assigned property and can bid for sites at government auctions.

The government has removed the shackles from the private sector, streamlined some regulations, and is moving ahead with privatisation. The economy has seen annual growth of more than 8 per cent for the past four years, while per-capita income, still markedly below many of its Asian counterparts, has more than doubled to about US$780 in the past decade.

'The return-on-investment race is likely to be won by marathon runners and not sprinters,' said Mr Townsend. 'Developers and investors taking a longer term view of the market and who seek quality partners and projects are the ones most likely to do well.'

He predicted that the current growth rates would continue in the short to medium term for well-located and good quality projects due to the underlying market fundamentals of strong demand versus limited supply.

But buyers should beware that there is still a twist in the emerging tiger's tail, and several restrictive stipulations remain, while cash is king. For instance, a foreign investor is not allowed to borrow funds to purchase leasehold tenure under current law and such tenures cannot be bequeathed. Foreign organisations and individuals who are allowed to enter Vietnam on a three month visa can also purchase leasehold title only but cannot borrow against the asset and the asset cannot be bequeathed.

Vietnam also has a fairly onerous property-related tax regime including 10 per cent payable on property purchase, capital gains tax set at 28per cent of realised profit and 25per cent of income generated if the property owner does not live in the country.

Investors looking for ways to be part of the growing Vietnam story can now invest through structured products such as ABN Amro's Zero Strike Participation Certificates (launched on the Singapore Exchange in June this year).

Delvin Tan, ABN Amro director, private investor products based in Singapore, said open-ended Zero Strike Participation Certificates provided investors with a simple solution to obtain investment exposure to a basket of equities listed on Vietnam's stock market.

Subject to meeting various compliance regulations, Mr Tan said the same investment structure mainly aimed at high-net-worth retail investors would be offered in Hong Kong in the near future.

He said Amro's Zero Strike strategy focused on high liquidity stocks covering a range of industries including real estate, manufacturing, food and beverage, telecommunications, oil and gas, petrochemical, logistics and power generation.

'The overall composition of the index is representative of the current Vietnam stock market, and at the same time, the stocks selected must display a high degree of liquidity,' Mr Tan said.

Similar to China a few years ago, the Vietnamese Government is introducing various initiatives for foreign investment.

'While we are seeing several positive initiatives taking place in Vietnam, investors should be prepared to experience a certain amount of stock market volatility,' said Mr Tan.

Investors might also consider Credit Suisse's Orient fund, which invests across Asia. Those looking for pure Vietnam plays have choices including Aim-listed Vinaland, Vietnam Holding and the Vietnam Opportunity Fund.