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| Dau Anh Tuan, Deputy Secretary General, and Director General of the Legal Department, of the Vietnam Chamber of Commerce and Industry__Photo: VNA |
The newly enacted 2024 Land Law (the Law) is assessed by legal experts to introduce adequate novel points to lower barriers and create a favorable business environment for enterprises.
It ensures the equal right to access to land for foreign-invested enterprises and domestic economic organizations which is regarded as one of the most important changes, enabling the business cycle in general and foreign-invested enterprises in Vietnam in particular to contribute to promoting Vietnam’s economic development and stepping up its international integration.
Dau Anh Tuan, Deputy Secretary General, and Director General of the Legal Department, of the Vietnam Chamber of Commerce and Industry (VCCI) has granted Vietnam Law and Legal Forum Magazine an interview about some notable new points of the Law.
May you share with us some of your thoughts about new points of the Law that impact the business cycle and business investment environment in Vietnam?
The Law, which has been passed by the National Assembly in January, is considered an important law, exerting great impacts on businesses and the business environment of Vietnam. From my perspective, there are some important impacts that should be taken into account.
Firstly, Article 4.6 revises the definition of land users, governing also people of Vietnamese origin residing abroad, who, as defined in the Law on Vietnamese Citizenship, used to have the Vietnamese citizenship which was determined at the time of their birth on the consanguinity principle, and their offspring and grandchildren who are permanently residing in foreign countries.
As per Article 28 of the Law, persons of Vietnamese origin residing abroad who are allowed to enter Vietnam have the right to: (i) purchase or lease-purchase houses associated with residential land use rights, and receive land use rights under housing development projects; (ii) inherit the right to use residential land and other categories of land for the same plot of land with a house built in accordance with the civil law; and (iii) receive houses given as gifts or donations associated with residential land use rights from heirs in accordance with the civil law.
Secondly, the Law expands the scope of land use. Its Article 218.1 allows land areas to be used for the agricultural purpose in combination with commercial, service provision, livestock production and medicinal plant-growing purposes; land areas to be used for public purposes in combination with commercial and service purposes; land areas to be used for construction of public works in combination with commercial and service purposes; and residential land areas to be used concurrently for agricultural, commercial and service provision purposes, and non-business works to be used for business purposes.
These new provisions help address such problems that have recently arisen in practice as agricultural production requiring the construction of on-site processing facilities and warehouses on agricultural land areas, or combination of agricultural or forestry production with tourism development.
Thirdly, the Law creates major changes in agricultural land use. Its Article 45 allows individuals who are not directly engaged in agricultural production to receive transfer or donation of the right to use paddy land areas. In case the transfer exceeds the law-specified land use limit, they are required to establish economic organizations and make paddy land use plans to be approved by district-level People’s Committees.
Meanwhile, Article 177 increases the limit of agricultural land areas to be transferred from households and individuals to 15 times (from current 10 times under the 2013 Land Law) of the agricultural land allocation limit.
These changes are expected to promote “professional” and large-scale agricultural production with science and technology application to meet the market demand.
Notably, Chapter 16 of the Law directly revises eight laws related to land management and use, and annuls one National Assembly resolution concerning land use so as to address inconsistencies in the implementation of the Law over the past time.
The Law also contains provisions to facilitate the administrative procedure reform, decentralization and delegation of powers from the central level to the provincial level, and give more powers to district-level authorities, which, I believe, will help make land-related administrative procedures clearer and more convenient.
In your opinion, what are notable changes that affect the land access right of foreign-invested economic organizations?
In general, the Law’s provisions on the land access right of foreign-invested economic organizations are not much different from previous laws.
However, there is a notable change that makes the Law more consistent with other relevant legal documents.
Previously, the 2013 Land Law stipulated that foreign-invested enterprises include enterprises with 100 percent of foreign investment capital, joint-venture enterprises and Vietnamese enterprises in which foreign investors buy shares, merge or acquire in accordance with the investment law. This provision is contrary to the 2020 Investment Law, which stipulates that foreign-invested enterprises are those having over 50 percent of their charter capital held by foreign investors, or having a majority of their general partners being foreign investors.
To be consistent with the 2020 Investment Law, Article 46.3 of the Law redefines foreign-invested economic organizations as economic organizations that satisfy the specified conditions and carry out investment procedures under the Investment Law’s provisions applicable to foreign investors.
As a representative of the business cycle participating in the process of compiling and promulgating legal documents concerning enterprises, what activities have been and will be carried out by the VCCI to disseminate the Law among enterprises and gather their opinions for formulation of the Law’s guiding texts in the upcoming time?
The Law is an enormous, important and very complicated legal document. In the coming time, VCCI will participate in a more active manner in publicizing and disseminating the Law as well as its guiding documents and other relevant laws among enterprises and investors.
In addition, the VCCI has coordinated with the National Assembly’s Economic Committee, Ministry of Natural Resources and Environment, and Ministry of Construction in organizing special programs on training in and dissemination of the Law’s important points for the business cycle (on March 21 in Hanoi and April 12 in Ho Chi Minh City).
The VCCI will also proactively contribute opinions to the process of compiling the Law’s guiding documents, including nine decrees drafted by the Ministry of Natural Resources and Environment, Ministry of Finance, and Ministry of Agriculture and Rural Development.- (VLLF)
