Rights and obligations of overseas Vietnamese foreign-invested enterprises using land in Vietnam

Vietnam Land law has regulations on rights and obligations of overseas Vietnamese, foreign organizations with diplomatic functions, foreign-invested enterprises using land in Vietnam. Let’s find out this issue with Lawyer X through the following situation: “Dear Lawyer! I want to ask what are rights and obligations of foreign organizations with diplomatic functions? What are rights and obligations of overseas Vietnamese and foreign-invested enterprises using land for implementation of investment projects in Vietnam? Thanks for answering my questions”

Legal grounds

• 2013 Vietnam land law

What are rights and obligations of foreign organizations with diplomatic functions?

– Foreign organizations with diplomatic functions using land in Vietnam have the following rights and obligations:

+ The general rights and obligations prescribed in Articles 166 and 170 of Land law;

+ To construct facilities on land in accordance with the licenses granted by competent state agencies of Vietnam;

+ To own the facilities on the leased land constructed by their own within the lease term.

– In case there are different provisions in treaties to which the Socialist Republic of Vietnam is a contracting party, foreign organizations with diplomatic functions have the rights and obligations as provided in those treaties.

Rights and obligations of overseas Vietnamese and foreign-invested enterprises using land for implementation of investment projects in Vietnam

– Overseas Vietnamese investing in Vietnam who are allocated land with land use levy by the Vietnamese State have the following rights and obligations:

+ The general rights and obligations prescribed in Articles 166 and 170 of Land law;

+ The rights and obligations prescribed in Clause 2, Article 174 of Land law.

– Overseas Vietnamese and foreign-invested enterprises that are leased land with annual rental payment from the Vietnamese State have the following rights and obligations:

+ The general rights and obligations prescribed in Articles 166 and 170 of Land law;

+ To mortgage their assets attached to the leased land at credit institutions which are licensed to operate in Vietnam, and to contribute as capital their assets attached to the leased land. The recipient of the capital contribution may lease land from the State for the determined purpose for the remaining lease term;

+ To sell their assets attached to the leased land upon fulfillment of the requirements prescribed in Article 189 of Land law;

+ To lease houses if they are permitted to invest in the construction of and trading in houses.

– Overseas Vietnamese or foreign-invested enterprises that lease land from the State with full one-off rental payment for the entire lease period and foreign-invested enterprises that are allocated land with land use levy to implement projects have the following rights and obligations:

+ The general rights and obligations prescribed in Articles 166 and 170 of Land law;

+ To transfer land use rights and land-attached assets under their ownership during the land use term;

+ To lease and sublease land use rights and land-attached assets under their ownership within the land use term;

+ To mortgage land use rights and land-attached assets under their ownership at credit institutions which are licensed to operate in Vietnam within the land use term;

+ To contribute land use rights and land-attached assets under their ownership as capital for cooperation in production and business within the land use term.

– Foreign-invested enterprises using land formed through the purchase of shares of Vietnamese enterprises have the following rights and obligations:

+ In case the foreign-invested enterprise formed through the purchase of shares of Vietnamese enterprises is a wholly foreign-invested enterprise or a foreign-invested enterprise in which the foreign investor is the dominant shareholder in accordance with the law on enterprises, that foreign-invested enterprise has the rights and obligations prescribed in Clauses 2 and 3 of this Article corresponding to the form of payment of land use levy or land rental;

+ In case the foreign-invested enterprise formed through the purchase of shares of Vietnamese enterprises is an enterprise in which the Vietnamese party is the dominant shareholder in accordance with the law on enterprises, that foreign-invested enterprise has the rights and obligations as economic organizations as prescribed in Articles 174 and 175 of Land law.

– For overseas Vietnamese or foreign-invested enterprises that use land to implement investment projects in Vietnam and are allocated or leased with full one-off rental payment for the entire lease period by the State and are exempted from land use levy or land rental or allowed to pay a reduced one, they have the rights and obligations prescribed in Clause 4, Article 174 of Land law.

Rights and obligations of joint ventures using land through receipt of land use rights as capital and wholly foreign-invested enterprises which are converted from joint ventures

– Joint ventures between foreign organizations, foreign individuals or overseas Vietnamese and economic organizations in which the economic organizations contribute land use rights as capital, have the rights and obligations prescribed in Article 174 of Land law in the following cases:

+ The land of which land use rights are contributed by the economic organizations is land allocated with land use levy or leased with full one-off rental payment for the entire lease period by the State, and the paid amount of land use levy or land rental does not originate from the state budget;

+ The land of which land use rights is contributed by the economic organizations through acquisition of land use rights is not the land leased by the State with annual rental payment, and the paid amount for the acquisition of land use rights does not originate from the state budget.

– In case a state enterprise leases land from the State before July 1, 2004, and is entitled to contribute the value of land use rights as allocated from the state budget, not as a recorded debt, and does not have to pay land rental in accordance with the land law, as capital to establish a joint venture with a foreign organization or individual, that joint venture has the rights and obligations prescribed in Article 174 of Land law. The value of land use rights is considered the State’s capital contributed to the joint venture.

– In case an overseas Vietnamese who is allocated land with land use levy or leased land with full one-off rental payment for the entire lease period by the State contributes the value of land use rights in the capacity as a domestic economic organization as capital to a joint venture with a foreign organization or individual, that joint venture has the rights and obligations prescribed in Article 174 of Land law.

– If a joint venture in which the Vietnamese party contributes land use rights as capital is converted into a wholly foreign-invested enterprise, it has the following rights and obligations:

+ The rights and obligations prescribed in Clause 2, Article 183 of Land law, for the case in which the contributed land use rights are not used for implementing investment projects on houses for sale and the wholly foreign-invested enterprise is leased land by the State with annual rental payment under Clause 1, Article 56 of Land law;

+ The rights and obligations prescribed in Clause 3, Article 183 of Land law, for the case in which the contributed land use rights are not used for implementing investment projects on houses for sale and the wholly foreign-invested enterprise is leased land by the State with full one-off rental payment for the entire lease period under Clause 1, Article 56 of Land law;

+ The rights and obligations prescribed in Clause 3, Article 183 of Land law, for the case in which the contributed land use rights are used for implementing projects on houses for sale and the wholly foreign-invested enterprise is allocated land by the State under Clause 3, Article 55 of Land law.

Rights and obligations of overseas Vietnamese and foreign-invested enterprises using land in industrial parks, industrial clusters, export processing zones, hi-tech zones or economic zones

– Overseas Vietnamese may acquire land use rights in industrial parks, industrial clusters, export processing zones, hi-tech zones or economic zones, and have the rights and obligations prescribed in Article 174 of Land law.

– Overseas Vietnamese or foreign-invested enterprises leasing or subleasing land in industrial parks, industrial clusters, export processing zones, hi-tech zones or economic zones have the following rights and obligations:

+ In case of making full one-off rental payment for the land lease or sublease for the whole lease or sublease period, they have the rights and obligations prescribed in Article 174 of Land law;

+ In case of making annual rental payment, they have the rights and obligations prescribed in Article 175 of Land law.

Rights and obligations related to land use of overseas Vietnamese who are eligible to own houses in Vietnam; foreign individuals or overseas Vietnamese who are ineligible to buy houses associated with land use rights in Vietnam

– Overseas Vietnamese who are entitled to own houses in accordance with the housing law are entitled to own houses associated with residential land use rights in Vietnam.

– Overseas Vietnamese who are entitled to own houses associated with residential land use rights in Vietnam have the following rights and obligations:

+ The general rights and obligations prescribed in Article 166 and Article 170 of Land law;

+ To transfer land use rights when selling, donating, bequeathing, exchanging houses with domestic organizations or individuals, overseas Vietnamese who are eligible to own houses for their own living; to donate houses associated with residential land use rights to the State, communities or donate houses of gratitude as prescribed at Point c, Clause 2, Article 174 of Land law. In case of donating or bequeathing to people who are ineligible to own houses in Vietnam, such people may only to receive the value of houses associated with residential land use rights;

+ To mortgage houses associated with residential land use rights at credit institutions which are licensed to operate in Vietnam;

+ To lease, and authorize the management of, houses when unused.

– If all the heirs of land use rights and ownership of houses and other land-attached assets are foreigners or overseas Vietnamese who are ineligible to own houses in Vietnam as prescribed in Clause 1 of this Article, the heirs shall not be granted the certificate of land use rights and ownership of houses and other land-attached assets but may transfer or donate the inherited land use rights in accordance with the following provisions:

+ In case of transferring land use rights, the heirs may act as the transfer or in the contract of transfer of land use rights;

+ In case of donating land use rights, the people to receive land use rights must be the subjects specified at Point e, Clause 1, Article 179 of Land law and be eligible under the housing law, in which the heir may act as the donor in the contract or written document on donation commitment;

+ In case of not making the transfer or donation of land use rights, the heir or his/her representative with a lawful document on authorization, shall submit a dossier on the inheritance to the land registration agency in order to update on the cadastral book.

– In case there is an overseas Vietnamese who is ineligible to buy a house associated with residential land use rights in Vietnam among the heirs while others are eligible to inherit land use rights in accordance with the land law and the inherited land use rights have not been divided, the heirs or their representatives with lawful documents on authorization, shall submit dossiers on the inheritance to the land registration agency in order to update on the cadastral book.

Once the inheritance is made, the certificates of land use rights and ownership of houses and other land-attached assets are granted to those who are eligible for being granted such certificate.

Regarding the overseas Vietnamese who is ineligible to buy houses associated with residential land use rights in Vietnam, his/her inherited part shall be dealt with in accordance with Clause 3 of this Article.

– In the cases specified at Point c, Clause 3, and in Clause 4 of this Article, the heirs may authorize in writing other persons to take care or use land temporarily and perform the obligations in accordance with the land law and other relevant laws.

Rights and obligations of overseas Vietnamese and foreign-invested enterprises leasing land for construction of underground facilities

Overseas Vietnamese or foreign-invested enterprises investing in the construction of underground facilities and leasing land from the State have the following rights and obligations:

– In case of leasing land with full one-off rental payment for the entire lease period, they have the rights and obligations prescribed in Clauses 3 and 5, Article 183 of Land law.

– In case of leasing land with annual rental payment, they have the rights and obligations prescribed in Clauses 2 and 5, Article 183 of Land law.

Please see more:

• Instructions for exclusive registration of company logos in Vietnam
• Service of changing the legal representative of Vietnamese enterprises

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