Lawyer Nguyen Thanh Ha, SB Law
I am a foreigner interested in making investment in Vietnam. I wonder if Vietnam allows wholly foreign-owned enterprises to buy land in the country?
Article 5.7 of the 2013 Land Law provides for land users as follows:
“Land users entitled to land allocation or lease or recognition of land-use rights by the State or receive land use rights transferred by others in accordance with this Law include:
[...] 7. Foreign-invested enterprises, including wholly foreign-owned enterprises, joint-venture enterprises, Vietnamese enterprises which have their shares purchased by, or merger with, or are acquired by foreign investors in accordance with investment law.”
Hence, foreign enterprises, including enterprises with 100 percent of foreign capital, joint-venture companies, and Vietnamese enterprises which have their shares purchased by, or are merged with, or are acquired by foreign investors are eligible to use land in Vietnam.
However, Article 169 of the 2013 Land Law concerning acquisition of land use rights mentions nothing about “purchase of land” by foreign-invested enterprises. Accordingly, foreign-invested enterprises may only acquire land use rights in Vietnam in the following forms:
- Receiving land use rights as capital invested by enterprises currently using such land, that are allocated by the State with collection of land use levy or leased land with one-off payment of land rental for the entire lease period. In this case, the value of land use rights must have been included into capitalized value of the capital-contributing enterprises. Notably, it is not permitted to use agricultural land and forest land to contribute capital to foreign-invested enterprises;
- Receiving land use rights through allocation of land by the State for implementation of investment projects to build houses for sale or sale and lease;
- Receiving land use rights through lease of land by the State; or,
- Receiving land use rights under records on successful conciliation of land-related disputes recognized by competent People’s Committees; contracts on mortgage of land-use rights for debt settlement; decisions of competent state agencies on settlement of land-related disputes, complaints, or denunciations; rulings or judgments of people’s courts; judgment enforcement decisions of judgment enforcement bodies which have been enforced; documents recognizing results of auctions of land use rights in accordance with law; and documents on splitting or division of land use rights in accordance with law for households or groups of people sharing land use rights.-