6 ways to receive land use rights of foreign-invested enterprises according to the Land Law: the state leases land, receives capital contribution in the form of land use rights.
The 2024 Land Law has clear and specific regulations on the forms of economic organizations with foreign investment capital that are entitled to receive land use rights in Vietnam. This not only helps businesses have a clearer direction in the investment process but also promotes the development of the real estate market.
In this article, we will learn about the forms in which economic organizations and foreign-invested enterprises can receive land use rights according to the latest regulations from the 2024 Land Law.
I. 6 forms of receiving land use rights of foreign-invested economic organizations
Pursuant to Article 28 of the 2024 Land Law, foreign-invested economic organizations are entitled to receive land use rights through 6 forms:
- Land leased by the state;
- Receive capital contribution in the form of land use rights;
- Receive transfer of investment capital as land use right value;
- Receive transfer of land use rights in industrial parks (IPs), industrial clusters or high-tech zones;
- Land allocated by the State for the purpose of implementing housing construction investment projects;
- Receive land use rights in special cases.
Specifically, each form is defined as follows:
1. Land leased by the state
Foreign-invested economic organizations may be leased land by the State to implement projects. Land lease may be carried out in one of two forms:
- The state leases land and pays rent annually;
- The state leases land and pays the rent once for the entire lease term.
2. Receive capital contribution in the form of land use rights
One of the common forms of receiving land use rights that foreign-invested economic organizations can implement is receiving capital contributions in the form of land use rights. This is a form of economic cooperation between the parties, allowing foreign enterprises to use land use rights as part of capital contributions to investment projects.
>> See more: Regulations on capital contribution using land use rights.
3. Receive transfer of investment capital as land use right value
According to regulations, economic organizations with foreign investment capital can receive the transfer of investment capital with the value of land use rights. This helps organizations to be flexible in using land assets to develop economic projects.
4. Receive transfer of land use rights in industrial parks, industrial clusters/high-tech zones
Foreign-invested economic organizations can receive land use rights transfers in industrial parks, industrial clusters or high-tech zones. These are strategic, dynamic areas suitable for high-tech production, research and development activities.
5. Land allocated by the state for the purpose of implementing housing construction investment projects
Foreign-invested economic organizations can be allocated land by the State to carry out housing construction projects for sale or sale combined with lease. This is one of the effective forms of attracting investment, promoting the real estate market and helping to meet the housing needs of people in Vietnam.
6. Receive land use rights in special cases
In addition to the above cases, economic organizations and foreign-invested companies can also receive land use rights in some special cases such as:
- There is a document recognizing the results of the land use rights auction;
- There is a decision or award of the Vietnam Commercial Arbitration;
- As agreed in the contract or mortgage agreement to settle the debt;
- There is a document dividing and separating land use rights for groups of people sharing land use rights;
- According to the results of successful conciliation of land disputes recognized by competent authorities;
- According to the decision of a state agency or the judgment of the Court on the settlement of land disputes, complaints and denunciations.
>> See more: Procedures for land dispute mediation at the Commune People’s Committee.
II. Regulations on land use rights of economic organizations and foreign-invested companies
1. Right to mortgage land use rights of economic organizations with foreign investment capital
Pursuant to Clause 3, Article 41 of the 2024 Land Law, foreign-invested economic organizations are entitled to mortgage land use rights at credit institutions legally operating in Vietnam. This mortgage right applies to one of the following two cases:
- Economic organizations that are leased land by the state pay a one-time fee for the entire lease term;
- Economic organizations are allocated land by the state with land use fees collected to carry out investment projects.
>> See more: Cases where land use rights cannot be mortgaged.
2. Form of land rental payment for economic organizations with foreign investment capital
The provisions of Article 30 of the 2024 Land Law allow economic organizations with foreign investment capital to choose the form of land rent payment.
Below are two main options for how to pay land rent:
➧ Switch to one-time land rental payment:
Organizations that are paying annual land rent may choose to switch to a one-time payment for the remaining lease term. The land price in this case is re-determined at the time the decision to allow the conversion is made.
➧ Switch to annual land rental payment:
Organizations that are currently paying land rent in one lump sum for the entire lease term can choose to switch to annual payments. The amount paid will then be deducted from the annual land rent.
III. Questions about foreign-invested economic organizations receiving land use rights
1. In what forms can foreign-invested economic organizations receive land use rights?
Pursuant to Article 28 of the 2024 Land Law, foreign-invested economic organizations are entitled to receive land use rights through the following 6 forms:
- Land leased by the state;
- Receive capital contribution in the form of land use rights;
- Receive transfer of investment capital as land use right value;
- Land allocated by the State for the purpose of implementing housing construction investment projects;
- Receive transfer of land use rights in industrial parks, industrial clusters or high-tech zones;
- Receive land use rights in special cases.
>> See details: Forms of receiving land use rights of foreign-invested economic organizations.
2. In what special cases are foreign-invested economic organizations allowed to receive land use rights?
Foreign-invested economic organizations can receive land use rights in some special cases as follows:
- There is a document recognizing the results of the land use rights auction;
- There is a decision or award of the Vietnam Commercial Arbitration;
- As agreed in the contract or mortgage agreement to settle the debt;
- There is a document dividing and separating land use rights for groups of people sharing land use rights;
- According to the results of successful conciliation of land disputes recognized by competent authorities;
- According to the decision of a state agency or the judgment of the Court on the settlement of land disputes, complaints and denunciations.
3. Can foreign-invested economic organizations mortgage land use rights?
Pursuant to Clause 3, Article 41 of the 2024 Land Law, foreign-invested economic organizations are entitled to mortgage land use rights at credit institutions legally operating in Vietnam.
This mortgage right applies to cases where economic organizations are leased land by the State and pay a one-time fee for the entire lease term or are allocated land with land use fees to carry out investment projects.
>> See details: Regulations on land use rights of foreign-invested economic organizations.