Resolution 171: Expanding Land Resources For Commercial Housing Development In Vietnam

Vietnam’s housing market has experienced rapid growth in recent years, driven by urbanization, economic development, and increasing demand. A shortage in housing supply in some big cities currently has prompted policymakers to enhance land policies to unlock resources for housing project development. As new Land Law 2024 seems to fall short in resolving the land supply constraints for residential development, on 30 November 2024, the National Assembly adopted Resolution 171 on piloting implementation of commercial housing projects through agreements on voluntary assignment of land use rights (LUR) or use of existing LUR (Resolution 171).

With its introduction of a more flexible mechanism for commercial housing development, Resolution 171 is anticipated to address the housing supply shortage. However, developers will need to wait for a detailed decree to ensure the feasibility and compliance of their proposed projects.

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Mechanism for Calculation of Electricity Generation Price Bracket for Post-FiT Solar/Wind Power Plants

After the expiration of the preferential Feed-in Tariff (FiT) policy for solar and wind power projects in Vietnam, the energy selling price of solar and wind power plants in Vietnam will now be up to the parties’ negotiation in a power purchase agreement (PPA) but must be within the electricity generation price (EGP) bracket approved by the competent authorities. For that purpose, on 1 November 2023, the Ministry of Industry and Trade (MOIT) issued Circular 19 regulating the mechanism for establishing EGP brackets for solar and wind power plants (Circular 19).

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Possibility to apply term deposit interest to security deposit (ký quỹ)

At law, enterprises engaging in certain special business lines (e.g. labour outsourcing service, employment services, etc.) (Security Deposit Enterprise) are required to place a security deposit at a licensed bank in Vietnam (Custodian Bank) before conducting the relevant businesses (Security Deposit). The Security Deposit is subject to strict control regulations (e.g. it can only be withdrawn or released in specific cases upon being approved by a competent authority). While the term of the Security Deposit could be long (e.g. more than one year), it is not entirely clear from the law whether the Custodian Bank can establish the Security Deposit as a term deposit and apply the respective interest rate.

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