Vu Van Anh
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The 2024 Land Law, passed at the beginning of this year, provides new land policies applicable to overseas Vietnamese, giving them more land use rights. This will constitute a positive factor for the real estate market, the land use rights transfer and economic development.
Subjects of land users are broadened
Under the 2013 Land Law (Article 5.6), land users included “overseas Vietnamese defined in the 2008 Law on Vietnamese Nationality”. They included Vietnamese citizens residing overseas but still retaining Vietnamese citizenship; and persons of Vietnamese origin, who live and reside overseas. They are individuals of Vietnamese stock but have renounced their Vietnamese citizenship and currently reside and work overseas.
According to Clauses 3 and 6, Article 4 of the 2024 Land Law, land users include individuals at home, overseas Vietnamese being Vietnamese citizens, and persons of Vietnamese origin residing overseas.
As compared with the 2013 Land Law, which put these two subjects of overseas Vietnamese into one group, the 2024 Land Law clearly specifies these two subjects, granting broader land use rights to overseas Vietnamese still holding Vietnamese nationality. So, when the 2024 Land Law takes effect, overseas Vietnamese with Vietnamese nationality will have the land use rights and obligations like domestic individuals. They are fully entitled to acquire land use rights, and to directly participate in real estate transactions like citizens in the country without having to use names of their relatives at home in the land use rights transactions as before.
According to Phan Duc Hieu, permanent member of the National Assembly’s Economic Committee, this is a new policy as compared to the previous Land Law, which fully conforms with the Party’s and the State’s policy applicable to Vietnamese citizens regardless of their places of residence and also helps mobilize resources for socio-economic development in Vietnam.
Moreover, a separate provision on Vietnamese-stock persons residing overseas in the 2024 Land Law will serve as a basis for expanding the land use rights for these subjects, facilitating their investment and business activities as well as their residence in Vietnam. This also marks an important step forward in the course of formulating the 2024 Land Law, which matches the provisions of the 2023 Real Estate Business Law, the 2023 Housing Law and the 2008 Nationality Law, applicable to overseas Vietnamese.
Direct participation in real estate transactions and execution of investment projects
Along with the clearer definition of land users being Vietnamese citizens residing overseas and overseas Vietnamese, the 2024 Land Law expands land use rights and obligations, and the land use and management regimes applicable to these two subjects.
Accordingly, for overseas Vietnamese still retaining Vietnamese citizenship, they will enjoy the land use rights and obligations like domestic individuals.
These include citizens’ rights and obligations toward the land; land users’ general rights; land-using individuals’ rights and obligations; the rights to transfer, allocate, lease, sublease, inherit and donate land use rights, to mortgage or contribute land use rights as capital, and to acquire land use rights.
For the other subject, the land use rights are further expanded and specified in Articles 41, 43 and 44 of the 2024 Land Law, specifically as follows:
Being entitled to use land for executing investment projects
Vietnamese-stock persons residing overseas who are allocated land with land use levy payment may:
+ Transfer land use rights and their assets attached to land;
+ Lease land use rights and their assets attached to land;
+ Sublease land use rights and their assets attached to land in case they are leased land by the State with one-off payment of land rental for the entire lease period; and donate land use rights to the State;
+ Donate land use rights to residential communities for construction of public facilities in service of community interests or for expansion of roads under master plans;
+ Donate land use rights for construction of charity houses or solidarity houses attached to land;
+ Mortgage land use rights and their assets attached to land at credit institutions licensed to operate in Vietnam or other economic organizations or for individuals; and,
+ Contribute land use rights and their assets attached to land as capital to domestic organizations, individuals, Vietnamese-stock persons residing overseas, and foreign-invested economic organizations.
Vietnamese-stock persons residing overseas who are leased land by the State with annual land rental payment may:
+ Mortgage their assets attached to land at credit institutions licensed to operate in Vietnam;
+ Contribute their assets attached to land as capital; and,
+ Sell or lease their assets attached to land and the rent right in land lease contracts.
In cases of selling their assets and the rent right in land lease contracts, Vietnamese-stock persons residing overseas must meet the conditions specified in Article 46 of the Law. The purchasers of land-attached assets and the rent right in land lease contracts may continue renting the land for the defined purposes and the remaining land use duration, and have the rights and obligations of land users under the Law and other relevant laws;
+ Sublease land use rights with annual land rental payment, for land with infrastructure, if they are permitted to invest in infrastructure construction and commercial operation, for land in industrial parks, cottage industry zones or hi-tech parks; those who are subleased land use rights must use the land for proper purposes and fulfill law-specified financial obligations.
Vietnamese-stock persons residing overseas who are leased land by the State with one-off land rental payment for the entire lease duration; and foreign-invested economic organizations allocated land by the State with land use levy payment for project execution are entitled to:
+ Transfer land use rights and their assets attached to land in the land use duration;
+ Lease or sublease land use rights and their assets attached to land in the land use duration; and mortgage land use rights and land-attached assets at credit institutions licensed to operate in Vietnam; and,
+ Contribute land use rights and their assets attached to land as capital.
Being entitled to own houses attached with residential land use rights
Persons of Vietnamese origin residing overseas who are allowed to enter Vietnam may own houses attached to residential land use rights in Vietnam. They can use residential land from acquisition of residential land use rights in housing development projects; transfer residential land use rights when selling, donating, bequeathing or exchanging houses for organizations, individuals, and Vietnamese-stock persons residing overseas who are entitled to own houses in Vietnam. They may also donate houses attached with residential land use rights to the State or residential communities, and for construction of charity houses and solidarity houses.
In case of donating or bequeathing land use rights as capital to those who are not entitled to own houses in Vietnam, the latter may only enjoy the value of houses attached to residential land use rights and will not be issued certificates of land use rights and ownership of land-attached assets.
The transfer, lease, donation, bequeathal, or contribution of residential land use rights as capital must comply with the Law.
Vietnamese-stock persons residing overseas are entitled to mortgage the houses attached with residential land use rights at credit institutions licensed to operate in Vietnam.
Being entitled to use land in industrial parks and hi-tech parks
Vietnamese-stock persons residing overseas, when acquiring the rights to use land in industrial parks, cottage industry zones or hi-tech parks, will have the following rights and obligations:
+ To transfer land use rights and their assets attached to land;
+ To lease land use rights and their assets attached to land, in case they are allocated land by the State with land use levy;
+ To sublease land use rights and their assets attached to land, in case they are allocated land by the State with one-off payment of land rental for the entire lease duration;
+ To donate land use rights to the State, or to residential communities for construction of facilities to serve common community interests, or for expansion of roads as planned; or for construction of charity houses or solidarity houses attached to land;
+ To mortgage land use rights and their assets attached to land at credit institutions licensed to operate in Vietnam, or at other economic organizations or individuals; and,
+ To contribute capital with land use rights and assets attached to land to domestic organizations, individuals, Vietnamese-stock persons residing overseas, and foreign-invested economic organizations.
So, the 2024 Land Law has not only expanded but also added rights and obligations for Vietnamese citizens residing overseas and overseas Vietnamese, thereby demonstrating the Party’s policies and guidelines to bring into play resources of overseas Vietnamese for national development. The expansion of land use rights will also create favorable conditions for overseas Vietnamese to invest in production or business projects or to build houses in Vietnam for earning incomes.
However, as evaluated by Assoc. Prof. Dr. Doan Hong Nhung, senior lecturer at the Law School of Hanoi National University, the expansion of land use rights may cause a number of complicated matters for overseas Vietnamese due to strict land use management and control. As they neither live nor work in Vietnam, the strict management and control by state bodies is needed to ward off abuse of land use rights or breaches of relevant regulations on land.-
