Regarding the project execution in Vietnam, investors can lease land to build production factory. However, not all cases of land use rights are eligible for the transfer.
Foreign-invested enterprises may lease land in one of the two following forms:
- Annual rental payment
- Full one-off rental payment for the entire lease period
Nevertheless, not in any way, foreign-invested enterprises can transfer land use rights (Transfer of leased land). Foreign-invested enterprises leasing land may transfer the land use right only with full one-off rental payment for the entire lease period. According to Clause 3 Article 183 of Land Law 2013, foreign-invested enterprises are granted the following right: To transfer land use rights and land-attached assets under their ownership during the land use term.
In order to transfer leased land use right (Transfer of leased land) in Vietnam, what should foreign-invested enterprises consider?
Firstly, conditions of transfer leased land use right:
- Having the certificate, except the case prescribed in Clause 3, Article 186 and the case of receiving inheritance prescribed in Clause 1, Article 168 of Land Law 2013;
- The land is dispute-free;
- The land use rights are not distrained to secure judgment enforcement;
- Within the land use term.
Secondly, investors need to check business lines and investment capital of the transferee. In case the factory is located on an industrial park or industrial cluster, business lines of the transferee must conform with the detailed planning of the Industrial park and industrial cluster which is issued by the provincial People’s Committee. In addition, it is necessary for the company to carry out the procedures to increase investment capital or prove assets to receive the transfer of leased land in case the company has insufficient capital to buy assets. The transferee carries out the procedures of adjusting the investment registration certificate. On that stage, investors can adjust content of increasing investment capital and location of project (after assigning leased land transfer contract).
Thirdly, contract of transferring leased land:
Contract of transfering the leased land must be notarized or authenticated unless the party or parties to the transaction are real estate business organization.
Fourthly, after signing contract of transfering the use right of the leased land (Transfer the leased land), the enterprise carries out the procedure of registering land-related change at a Vietnam competent authority.
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