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Vietnam land lease rules for foreign investors
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Vietnam land lease rules start from one fact: foreigners cannot own land in Vietnam, but a foreign-invested company can lease it from the State for a set term. The rest of this guide shows how that lease works, how long it runs, and how rent is paid.
Who owns land in Vietnam
The Land Law says land belongs to the whole people, and the State manages it for them. Nobody can hold a title deed to the soil itself. What people and firms hold is a right to use the land.
This is true for Vietnamese citizens too. A local family does not own its plot in the Western sense. It holds a long-term use right that the State recognises and records. A foreign investor has the same basic setting, with tighter limits on what the use right allows.
Source: Land Law 2013 (Law No. 45/2013/QH13), National Assembly of Vietnam, in force from 1 July 2014.
How a foreign investor gets land
A foreign-invested company set up in Vietnam is treated as an economic organisation. The State can lease it land. This is the usual route for a factory, an office building, a shop or a farm project.
The lease is signed with the State, not with a private owner. The provincial People's Committee normally decides, after the project has its investment approval. The land must also fit the local land use plan. A plot that is not planned for your use cannot be leased to you.
There is a second route. A company can also sub-lease land that sits inside an industrial park, where an infrastructure developer already holds the lease from the State. Many first-time investors choose this because the roads, power and water are ready.
Source: Land Law 2013 (Law No. 45/2013/QH13), National Assembly of Vietnam, in force from 1 July 2014.
How long a land lease runs
The normal term for a project is up to 50 years. For large projects, slow-return projects and projects in areas with hard social or economic conditions, the term can go up to 70 years. The term follows the investment project. It is not longer than the project needs.
When the term ends, the user can ask to extend it. The State decides, and the land must still be needed for the approved project. Plan for this early. A short project licence will cap your land term.
Source: Land Law 2013 (Law No. 45/2013/QH13), National Assembly of Vietnam, in force from 1 July 2014.
Annual rent or one payment
The Land Law lets a leasing company pay in one of two ways. It can pay rent every year. Or it can pay once for the whole lease term.
The choice changes your rights. A company that pays the full term up front generally has wider rights, such as mortgaging the land use right and the buildings on it to a bank in Vietnam. A company that pays yearly has narrower rights, and mostly can mortgage only the assets it built on the land. Ask your lawyer which option your plot allows before you sign.
Check the price too. Rent is based on the land price list set by the province, and that list changes. Ask for the figure in writing.
Source: Land Law 2013 (Law No. 45/2013/QH13), National Assembly of Vietnam, in force from 1 July 2014.
Foreign individuals and homes
The rules above are for companies. A foreign person buying a home is a different case. The Law on Housing 65/2014/QH13, passed in November 2014, lets some foreign individuals own homes in Vietnam. Ownership is for a limited term, and the buyer still gets no land ownership. The law took effect on 1 July 2015.
Foreigners with no project and no company should read this law and its guidance closely before they commit any money.
This is general information, not legal advice.
Source: Law on Housing 2014 (Law No. 65/2014/QH13), National Assembly of Vietnam.
A short checklist
Before you sign a lease, confirm these points:
• The plot fits the local land use plan.
• Your investment approval covers the same use and the same term.
• You know whether rent is yearly or paid once.
• You know your right to mortgage, sub-lease or transfer.
• You have asked who handles land clearance and compensation.
Source: Land Law 2013 (Law No. 45/2013/QH13), National Assembly of Vietnam, in force from 1 July 2014.
Sources
Land Law 2013 (Law No. 45/2013/QH13), Articles 4, 52, 56, 59, 126 and 183. Law on Housing 2014 (Law No. 65/2014/QH13). Both by the National Assembly of Vietnam.