Forms of business in land use rights in Vietnam

In Vietnam, nowadays the state allows people to use land use rights in business. That is why there are many real estate companies born in Vietnam, of which one of the the most famous real estate companies are Novaland, Vinhome Groups, Dat Xanh Group and so on. So about the matter “Forms of business in land use rights in Vietnam” Let’s find out with LSX in the article below.

Legal grounds

• Land Law 2013
• Law on real estate business 2014

What is land use right?

According to the provisions of Articles 105 and 115 of the Civil Code 2015, we know that land use rights are property rights according to the provisions of Vietnamese law.

According to the provisions of Article 189 of the 2015 Civil Code, the right to use is as follows: The right to use is the right to exploit the utility, to enjoy the yields and profits from the property. The right to use may be transferred to another person by agreement or by law.

Thus, through the above regulations, we know that the right to use land is the right of a person to be allowed to exploit the utility, enjoy the benefits and profits from the use of the land.

What is the business of land use rights?

Currently, there are no regulations on what is the business of land use rights. However, we can understand the business of land use rights in the following sense: Trading in land use rights is an activity of the holders of legal land use rights who are allowed to conduct business activities of land use rights. such as investing capital to create, receive transfer, lease land fund with infrastructure or lease land use rights for transfer or lease for profit purposes.

And the form of expression of the business of land use rights is the business of real estate. Although this expression is somewhat inconsistent with the provisions of the law, however, real estate is the clearest expression for the expression of land use rights purchased and sold in Vietnam.

Conditions for trading in land use rights in Vietnam

According to Article 9 of the Law on Real Estate Business 2014, the conditions for real estate to be put into business are as follows:

– Houses, construction works put into business must fully meet the following conditions:

• Having registered ownership of houses and construction works attached to land in the certificate of land use right. For houses and construction works available in real estate investment and business projects, only a certificate of land use rights is required in accordance with the law on land;

• There is no dispute over land use rights, ownership of houses and construction works attached to the land;

• Not being distrained to ensure judgment enforcement.

– Types of land permitted to trade in land use rights must fully satisfy the following conditions:

• Having a certificate of land use right in accordance with the law on land;

• There is no dispute over land use rights;

• Land use rights are not distrained to secure judgment enforcement;

• During the land use period.

Conditions of individuals and organizations trading in land use rights in Vietnam

According to the provisions of Article 10 of the Law on Real Estate Business 2014, the conditions for organizations and individuals trading real estate are as follows:

– Organizations and individuals trading real estate must meet the following conditions:

• Enterprises must be established in accordance with the law on enterprises or cooperatives in accordance with the law on cooperatives, having a business in real estate (hereinafter referred to as enterprises);

• Must be disclosed on the enterprise’s website, at the head office of the Project Management Board (for real estate investment projects), at the real estate trading floor (for business cases). business through the real estate exchange) information about the business (including name, head office address, contact phone number, name of the legal representative), information about real estate put into business. business as prescribed in Clause 2, Article 6 of the Law on Real Estate Business, information on mortgage of houses, construction works, real estate projects put into business (if any), information on quantity, types of real estate products being traded, quantity and types of real estate products sold, transferred, lease-purchased and the remaining quantity and types of products that are still being traded. For publicly available information specified at this point that subsequently changes, it must be promptly updated after such changes are made;

• Only trade in real estate that fully meets the conditions specified in Article 9, Article 55 of the Law on Real Estate Business.

– In case an investor is selected to be the investor of a real estate project according to the provisions of law, such investor must have equity of not less than 20% of the total investment capital for the project. having a land use scale of less than 20 hectares, not less than 15% of the total investment capital, for projects with a land use scale of 20 hectares or more. When conducting real estate business, the project investor must satisfy the conditions specified in Clause 1, Article 10. The determination of equity specified in this Clause shall be based on the results of the financial statements already issued. the most recent audit or the results of the independent audit report of the operating enterprise (made in the year or the preceding year); in the case of a newly established enterprise, the equity shall be determined according to the actual contributed charter capital as prescribed by law.

Principles of trading land use rights in Vietnam

According to the provisions of Article 4 of the Law on Real Estate Business 2014, the principles of real estate business are as follows:

– Equality before the law; freely negotiate on the basis of respecting the legitimate rights and interests of the parties through the contract, not contrary to the provisions of law.

– Real estate put into business must fully satisfy the conditions prescribed by this Law.

– Real estate business must be honest, public and transparent.

– Organizations and individuals have the right to trade in real estate in areas outside the scope of national defense and security protection according to master plans and plans on land use approved by competent state agencies.

Types of real estate put into business with land use rights in Vietnam

According to the provisions of Article 5 of the Law on Real Estate Business 2014, the types of real estate put into business are as follows:

Types of real estate put into business under this Law (hereinafter referred to as real estate) include:

– Available houses and construction works of organizations and individuals;

– Houses, construction works formed in the future of organizations and individuals;

– Houses and construction works are public property permitted by competent state agencies to be put into business;

– Types of land that are permitted to be transferred, leased or sub-leased in accordance with the land law are permitted to trade in land use rights.

Forms of business in land use rights in Vietnam

According to the provisions of Article 11 of the Law on Real Estate Business 2014, the scope of real estate business of domestic organizations and individuals, overseas Vietnamese, foreign-invested enterprises such as: after:

– Domestic organizations and individuals may trade in real estate in the following forms:

• Buying houses, construction works for sale, lease, lease purchase;

• Renting houses and construction works for sublease;

• For land allocated by the State, it is allowed to invest in the construction of houses for sale, lease, or lease-purchase; transfer the land use right in the form of subdivision, sale of the ground in accordance with the law on land; invest in the construction of technical infrastructure of cemeteries and graveyards for the transfer of land use rights associated with such technical infrastructure;

• For land leased by the State, it is allowed to invest in the construction of houses for lease; invest in the construction of houses and construction works other than houses for sale, lease, or lease-purchase;

• For land with land use rights recognized by the State, it is allowed to invest in the construction of houses and construction works for sale, lease, or lease-purchase;

• For land transferred from organizations, households or individuals, they may invest in building houses and construction works for sale, lease, or lease-purchase;

• For land leased from organizations, households and individuals, they may invest in building houses and construction works for lease according to the right land use purposes;

• Receive transfer of the whole or part of real estate project of the investor to build houses, construction works for sale, lease, lease purchase;

• Receive the transfer or lease of land use rights from organizations, households and individuals to invest in the construction of technical infrastructure to transfer or lease the land already having such technical infrastructure.

– Overseas Vietnamese may conduct real estate business in the following forms:

• The forms specified at Points b, d, g and h, Clause 1, Article 11;

• For land allocated by the State, it is allowed to invest in the construction of houses for sale, lease, or lease-purchase;

• For leased or transferred land in industrial parks, industrial clusters, export processing zones, hi-tech parks and economic zones, they may invest in building houses and construction works for business according to the right purposes. using land.

– Foreign-invested enterprises may trade in real estate in the following forms:

• The forms specified at Points b, d, h Clause 1 and Point b Clause 2 Article 11;

• For leased land in industrial parks, industrial clusters, export processing zones, high-tech zones and economic zones, they may invest in building houses and construction works for business in accordance with land use purposes.

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