Offshore Wind Development in Vietnam – Legal Issues Relating to the Use of Sea Area

Vietnam appears to have great potential to develop offshore wind. And recently, many foreign investors are interested in developing large offshore wind farms in Vietnam. Unfortunately, except for regulations on offshore oil and gas development under the Petroleum Law, Vietnam does not have adequate regulations to develop a large offshore infrastructure project such as offshore wind farms. This starts with inadequate legal framework on the use of sea under the Law on Sea 2012 and Decree 11/2021. In particular,

  • The Law on Sea 2012 and Decree 11/2021 allow certain sea areas (khu vực biển) to be allocated for exploitation and use of “sea resources” (tài nguyên biển). While the term “sea resources” is not clear, it appears to include offshore wind farm development. Decree 11/2021 requires a project developer of an offshore wind farm to pay from US$ 125/ha/year to US$300/ha/year for the sea area allocated to the project. Payment for the allocated sea area could be a substantial amount since an offshore wind farm could require significant sea area for not only the wind turbines and the floating sub-station but also the sea area for the undersea transmission line and other protective area/corridor. On the other hand, sea area allocated to offshore oil development is exempt from payment under Decree 11/2021.

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Written by Nguyen Quang Vu On In , ,

Decree 15/2021 on management of construction investment projects

On 3 March 2021, the Government issued Decree 15 detailing a number of provisions on management of construction investment projects (Decree 15/2021) to replace Decree 59 of the Government on dated 18 June 2015 on the same subject (Decree 59/2015).

Some new key points of Decree 15/2021 are as follows:

  • Encouraging BIM and digital technology solutions: Decree 15/2021 encourages to impose building information modeling (BIM) and digital technology solutions in construction and work operation management activities. BIM file constitutes a component of construction design documents or as-built documents for construction projects or works imposing BIM. Contents and details of BIM would be agreed upon in construction contracts by parties involved in application of BIM.

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Written by Lawyers VNLaw On In ,

New guidance on issuance of Land use right certificate

On 30 June 2021, MONRE issued Circular 09/2021, amending some regulations on issuance of land use right certificate (LURC). Key takeaways from Circular 09/2021 are as follows:

· Circular 09/2021 provides a new case where the land user will be issued with a brand new LURC. In particular, if a master LURC covers multiple land parcels, then when the land user conducts the registration of changes to land due to land division, the divided land will be issued with a separate LURC (Article 1.2 of Circular 09/2021). Previously, Circular 23/2014 only contemplates the case that the divided land is issued with separate LURC when there is division of single land parcel into several separate land parcels; and

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Written by Lawyers VNLaw On In

Uncertainty for Vietnamese real estate companies doing business in an industrial zone

There is inconsistency between the Land Law 2013 and the Law on Real Estate 2014 regarding the ability of a local real estate company, who sub-leases land from an industrial zone developer (IZ Developer), to sell building or other construction works built on such land. In particular,

  • According to Article 149.3 of the Land Law 2013, a local real estate company, who sub-leases land from an IZ Developer to conduct business in an industrial park is entitled to, among others, transfer building or construction works attached to such land to others; and

  • However, under Article 11.1 of the Law on Real Estate Business 2014, the scope of real estate business of a local enterprise does not include the scenario where the real estate company sub-leases land from an IZ Developer. The most relevant scenario is the scenario where a real estate company leases from another organisation for leasing business. But that scenario does not include sale of building and construction works.

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Written by Nguyen Quang Vu On In