SOME ISSUES ABOUT FOREIGN ENTERPRISES LEASING LAND IN VIETNAM TO IMPLEMENT INVESTMENT PROJECTS

Pursuant to the provisions of Clause 7, Article 5 of Law on Land 2013, foreign-invested enterprises subject to land use in Vietnam include enterprises with 100% foreign invested capital, joint venture enterprises, Vietnamese enterprises in which foreign investors purchase shares, merge or acquire in accordance with the law on investment.  

I. Forms of implementation of investment projects for foreign enterprises leasing land in Vietnam 

Pursuant to the provisions of Clause 3 and Points b, d and g, Clause 1, Article 11 of the Law on Real Estate Business 2014, Foreign enterprises leasing land in Vietnam may implement investment projects in the following forms: 

-Renting houses, construction works for sublease; 

- For land leased by the State, housing may be invested for lease; investment in the construction of houses and non-residential construction works for sale, lease or lease purchase; 

- For land leased by organizations, households and individuals, they may invest in building houses or construction works for lease according to land use purposes. 

Note: According to the provisions of Point b, Clause 3, Article 11 of the Law on Real Estate Business 2014, for leased land in industrial parks, industrial clusters, export processing zones, hi-tech parks, economic zones, houses and construction works may be invested in building houses and construction works for business purposes in accordance with land use purposes. 

II. Time limit for using leased land in Vietnam for implementation of investment projects for foreign enterprises 

Pursuant to the provisions of Clause 3, Article 126 of Law on Land 2013, the time limit for foreign enterprises to lease land in Vietnam for the implementation of investment projects is prescribed as follows:  

- The land lease term for foreign-invested enterprises for the implementation of investment projects in Vietnam shall be considered and decided on the basis of investment projects or applications for land allocation or land lease, but not exceeding 50 years. 

- For projects with large investment capital but slow capital recovery, investment projects in areas with difficult socio-economic conditions, areas with extremely difficult socio-economic conditions that need a longer term, the term of land allocation or land lease shall not exceed 70 years. 

Note: According to the provisions of Clause 7, Clause 8, Article 126 of Law on Land 2013, foreign enterprises leasing land should pay attention to the following: 

-For land parcels used for multiple purposes, the land use term is determined according to the duration of the type of land used for the main purpose. 

- The time limit for land allocation or land lease specified in Article 126 of Law on Land 2013 is counted from the date of issuance of a decision on land allocation or land lease by a competent state agency. 

Above is an article providing basic information on Vietnamese laws on foreign enterprises leasing land in Vietnam to implement investment projects.  

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Hoang Pham (James) / Managing Partner at: hoang.pham@vselawyers.com

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Attention: This legal update is not an advice and should not be treated as such.