Capital contribution in accordance with the law is understood as the contribution of assets to establish a company or additional contributions after the company has been established. Individuals and organizations may contribute capital with property or land use rights. For land use rights or registered assets, the right of use or ownership must be transferred to the company. So about the matter “Contributing capital with land use rights in Vietnam” Let’s find out with LSX in the article below.
Legal grounds
- Enterprise Law 2020;
- Land Law 2013;
- Civil Code 2015.
Regulations on capital contribution
Capital contribution means putting one’s assets into a legal entity or into an investment project for profitable business. The contributor will become the owner or joint owner of the legal entity or the project investor. Assets used to make capital contribution can be Vietnamese currency, freely convertible foreign currency and other legal assets such as gold, value of land use rights, value of intellectual property rights, etc.
Clause 13, Article 4 of the Enterprise Law 2014 stipulates: Capital contribution is the contribution of assets to form the charter capital of the company.
Capital contribution includes capital contribution for the establishment of an enterprise or additional capital contribution to the charter capital of an already established enterprise.
Assets contributed as capital can be Vietnam dong, freely convertible foreign currency, gold, value of land use rights (Clause 1, Article 35 of the Enterprise Law 2014).
For each type of enterprise, the law regulates the order and procedures for capital contribution differently. For registered assets or land use right value, the capital contributor must carry out procedures for transferring the property ownership or land use right to the company at a competent state agency (point a, clause 1, Article 36 of the Law on Enterprises). industry in 2014).
According to the provisions at Point a, Clause 1, Article 36 of LDN 2014:
“1. Members of limited liability companies, partnerships and shareholders of joint-stock companies must transfer ownership of contributed capital assets to the company according to the following regulations:
a/ For assets with registered ownership or land use right value, the capital contributor must carry out procedures for transferring ownership of such property or land use rights to the company at a competent state agency. .
The transfer of ownership of assets contributed as capital is not subject to registration fees.
Contributing capital with land use rights in Vietnam
According to the provisions of Clause 18, Article 4 of the Enterprise Law 2020, capital contribution is the contribution of assets to form the charter capital of the company, including capital contribution to establish the company or additional contribution to the charter capital of the company already approved by the Company.
Assets contributed as capital can be Vietnam dong, freely convertible foreign currency, gold, land use right value. For each type of enterprise, the law regulates the order and procedures for capital contribution differently. For registered assets or the value of land use rights, the capital contributor must carry out procedures for transferring property ownership or land use rights to the company at a competent state agency.
Thus, capital contribution with land use rights is the transfer of one’s land use rights to the company that they contribute capital to. Depending on the type of enterprise, the law has different regulations on issues related to capital contribution.
Regulations on the principle of capital contribution with land use rights
The capital contribution with land use rights must ensure the following principles:
• Consistent with the district’s annual land use plan approved and announced.
• In case the investor implements the method of receiving land use right capital contribution but has to change the land use purpose, it can only be done after the competent People’s Committee has written permission to change the use purpose. land, allowing the land use term to be adjusted to suit the use of land for production and business.
• In case the land area for implementation of a production or business project has a portion of land that the current land user has not contributed as capital in the form of land use rights in accordance with the law on land, the investor may agreement to purchase property on land from the current land user, the State shall recover the land, change the land use purpose and lease the land to the investor for the implementation of the project. The content of the contract for sale and purchase of assets attached to land must clearly state that the seller of the property voluntarily returns the land for land recovery by the State and leases the land to the buyer.
Conditions for land users to contribute capital with land use rights
According to the provisions of Article 188 of the 2013 Land Law, households and individuals that contribute capital with land use rights must satisfy the following conditions:
• Having a Certificate, except for the case specified in Clause 3, Article 186 and the case of inheritance specified in Clause 1, Article 168 of the 2013 Land Law;
• Undisputed land;
• Land use rights are not distrained to secure judgment enforcement;
• During the land use period.
In addition, according to the provisions of Clause 1, Article 177 of the Civil Code 2015, the entity participating in the transaction on capital contribution with land use rights must have full civil legal capacity, full civil act capacity and participate in the transaction. Transactions are completely voluntary.
Conditions of recipients of land use right capital contribution
According to the provisions of Article 93 of the Land Law 2013, economic organizations, households and individuals that are entitled to receive capital contributions with land use rights to carry out production and business investment must satisfy the following conditions:
• Having written approval from a competent state agency for economic organizations receiving agricultural land capital contribution to implement the project;
• The use purpose for the land area receiving the land use right capital contribution must be consistent with the master plan and plan on land use already approved by the competent state agency;
• For land specialized in wet rice cultivation, the person who is allocated or leased land by the State for non-agricultural purposes from the land specialized in wet rice cultivation must pay a sum of money for the State to supplement the area of specialized rice-growing land. water loss or increase the efficiency of rice land use according to the Government’s regulations.
Authority to register capital contribution by land use right
Households and individuals wishing to register for capital contribution with land use rights should go to the land registration office where the land is located for registration. The registration of capital contribution with land use rights must comply with the order and procedures prescribed by law.
Form and effective date of the contract of capital contribution with land use rights
Contracts for capital contribution with land use rights must be made in writing and must be notarized and authenticated. The effective time of the contract of capital contribution with land use rights is from the date of notarization or authentication. The notarization shall be carried out at notarial practice organizations, the authentication shall be carried out at the commune-level People’s Committees.
In case the capital contribution by land use right terminates
• The time limit for capital contribution with land use rights has expired.
• One party or parties as agreed in the capital contribution contract.
• Land is acquired under the provisions of the Land Law.
• The individual participating in the capital contribution contract dies; declared dead; loss or limitation of civil act capacity; prohibited from operating in the field of business cooperation where the capital contribution contract must be performed by that individual.
• The legal entity participating in the capital contribution contract is terminated and the capital contribution contract must be performed by such legal entity.
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Frequently asked questions
Step 1: Prepare and submit the application for capital contribution with land use rights
As specified in Clause 3, Article 9, Circular 24/2014/TT-BTNMT stipulating cadastral records.
The person making the capital contribution shall prepare 01 dossier and submit it at the land registration office of the district-level People’s Committee or branch of the land registration office under the Department of Natural Resources and Environment, including:
Application for registration of land change (according to the form)
Certificate of land use right (original)
Contract for capital contribution of land use rights
The written approval of the competent state agency to agree the capital contribution
Excerpt from the cadastral map
Notarized power of attorney (if any)
Step 2: Verify the profile
The land registration office is responsible for checking the dossier, sending cadastral information to the tax authority to determine and notify the collection of financial obligations in case financial obligations must be fulfilled as prescribed; confirm the content of changes in the granted Certificate in accordance with regulations of the Ministry of Natural Resources and Environment.
Step 3: Return the result
The land registration office is responsible for returning the land use right certificate to the land user.
Processing time: 10 days from the date of receipt of complete and valid dossiers.
Termination of capital contribution with the value of land use rights
The capital contribution equal to the value of land use rights shall terminate in the following cases:
a) The time limit for capital contribution equal to the value of land use rights has expired;
b) At the request of a party or parties; in case of joint venture with foreign organizations or individuals, it must be approved by a competent state agency;
c) According to a decision of a competent state agency due to a serious violation of the provisions of the law on land;
d) Due to being declared bankrupt;
e) Due to the dissolution of the enterprise;
g) The individual entering into the capital contribution contract dies, the legal entity or other entities terminate, but the capital contribution contract must be performed by such individuals, legal entities or entities.
The handling of land use rights upon termination of the capital contribution equal to the value of land use rights shall comply with the following provisions:
a) For the case specified at Points a and b above, the party contributing capital equal to the value of land use rights may continue to use that land for the remaining land use term.
b) If the land use term has expired, the State shall recover the land in accordance with the land law; if the land user still wishes to continue using such land, the State shall consider allowing it to be used in accordance with the provisions of law.
c) For the case specified at point c above, the State shall recover such land.
d) In case the joint venture enterprise goes bankrupt, the land use right contributed as capital shall be handled according to the People’s Court’s Decision declaring bankruptcy of the enterprise.
e) Recipients of land use rights and land-attached assets being domestic organizations or individuals may continue to use the land for the right purposes and within the remaining land allocation or lease term.
g) The recipient of land use rights and land-attached assets being a foreign organization or individual may be leased land by the State and must use the land for the right purposes as prescribed by law.
h) If there is no one to receive the land use right and land-attached assets, the State shall withdraw it.
i) In case the individual entering into the capital contribution contract dies, the land use rights contributed as capital shall be inherited as prescribed by law.
k) In case of dissolution, the land use right contributed as capital shall be handled as agreed by the parties.
Conclusion: So the above is Contributing capital with land use rights in Vietnam. Hopefully with this article can help you in life, please always follow and read our good articles on the website: lsxlawfirm.com
