Sale And Sub-Lease Of Annual Rental “Lease Rights” Under The Land Law 2024 In Vietnam

The Land Law 2024 introduces major amendments to the land use regime in Vietnam. One of the most interesting new amendments is the ability of a land user who lease land from the Government with annual rental payment (such user, Annual Land User) could now sub-lease or, subject to certain conditions, sell the land (via a sub-lease or sale of the lease rights) together with the assets attached to such land to another person. Previously, most land users who pay land rental for the whole term in advance could sublease or sell its land to another person. In our opinion, if implemented properly, the new amendment could improve the supply side of the real estate market substantially.

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Written by Nguyen Quang Vu On In ,

The New Land Law 2024 – Notable Amendments To Legal Regulations On Industrial Zone Land In Vietnam

In this post, we highlight some key changes to regulations on industrial zone land under the new Land Law 2024.

State-owned developers

  • Regarding areas eligible for investment incentives (those with underdeveloped socio-economic conditions) that are unable to attract private developers, the Land Law 2024 allows the State to lease or allocate land to a public-service entity (đơn vị sự nghiệp công lập) to develop industrial zones.

  • Under the Land Law 2013, it appears that only economic organization, foreign-invested company, and Vietnamese individual residing oversea can become industrial zone developer (IZ Developer).

IZ Developer’s option to change method of payment for land rental

  • The Land Law 2024 expressly allows the IZ Developers using industrial zone’s land via annual rental payment method to change to the one-off land rental payment method for all or part of the leasable land area.

  • The Land Law 2013 also generally entitles a land user using land on annual rental payment to change to using land with one-off land rental payment. However, the law does not make clear whether the change can be made for separate land parcels in the industrial zone. Accordingly, one may take a strict view that the IZ Developer may only convert all industrial zone land to one-off rental payment instead of a portion of it.

  • The new regulation of the Land Law 2024 may provide flexibility for both a IZ Developer and its tenants in negotiating the suitable land rental payment method.

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Written by Nguyen Quang Vu On In

Land Law 2024 – Some Takeaways For Vietnamese Residing Overseas

From 1 January 2025, under the new Land Law 2024, Vietnamese who reside overseas and still hold Vietnamese nationality (Vietnamese citizens) will be treated as Vietnamese individuals residing in Vietnam in the matters relating to land use rights in Vietnam, while the land use scheme applicable to persons having Vietnamese origin (người gốc Việt Nam) remains as same as to the one applicable to overseas Vietnamese under the Land Law 2013. This is one of the key changes under the Land Law 2024 relating to Vietnamese residing overseas. This article provides some highlights of the land use scheme applicable to these two groups of land users: (i) Vietnamese citizens and (ii) persons of Vietnamese origin.

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Written by Nguyen Quang Vu On In ,

Comments on New Law on Real Estate Business 2023 – Part 2

Please download the pdf version here.

In this post, we continue discussing the new changes introduced by the Real Estate Business Law 2023. Part 1 of our discussion can be found Here.

This post is written by Nguyen Hoang Duong and Nguyen Bich Ngọc, and edited by Nguyen Quang Vu.

1)         New restriction when collecting deposit for purchase of off-plan real estate

Under the Real Estate Business Law 2023, real estate developers can only collect a deposit of up to 5% of sale price of the relevant real estate from purchasers when the residential houses, construction works are qualified to be put into trading. The law further requires a deposit agreement to expressly set out the sale price and area of the off-plan real estate. The off-plan real estate under the deposit agreement must satisfy conditions for sale under law. This indicates that collecting a deposit is considered putting relevant off-plan real estate into business.

The new requirements may pose significant difficulty for real estate developers with weak financial capacity when it comes to funding for pre-construction phase of their projects.

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Written by Nguyen Quang Vu On In ,