Are foreign-invested enterprises allowed to accept land mortgages in accordance with Vietnamese law?
- What are the principles of registration for mortgage of land use rights and assets attached to land?
- Are foreign-invested enterprises allowed to accept land mortgages in accordance with Vietnamese law?
- What is the registration application for mortgage of land use rights in case the mortgagee is not a credit institution?
What are the principles of registration for mortgage of land use rights and assets attached to land?
Article 5 of Circular No. 07/2019/TT-BTP stipulates the principles of registration for mortgage of land use rights and assets attached to land as follows:
- Land registration offices shall proceed with mortgage registration specified in Article 4 of Circular No. 07/2019/TT-BTP of applicants as specified in Clause 1 Article 8 of Decree No. 102/2017/ND-CP and shall only proceed with registration for mortgage of land use rights, assets attached to land in case mortgagors are persons holding land use rights or owners of assets attached to land.
Parties to mortgage agreements must be responsible for details of the agreements on value of collateral, secure obligations, assurance of civil obligation satisfaction of mortgagors or other persons as specified in Clause 3 Article 4 of Circular No. 07/2019/TT-BTP and other relevant regulations of civil laws;
Details of the agreements on collateral other than land use rights, assets attached to land and other categories that both parties are permitted to enter into agreement on as per the law.
- In case a person has registered for mortgage of property rights arising from a home purchase agreement, he/she cannot register for mortgage of that off-the-plan house; or if he/she has registered for mortgage of an off-the-plan house, he/she cannot register for mortgage of property rights arising from a home purchase agreement.
- In case a project developer has mortgaged and registered for mortgage of investment projects for construction of houses or off-the-plan houses, before selling houses in the projects, he/she must apply to revise mortgaged contents to withdraw collateral unless the project developer, buyer and mortgagee agree otherwise.
In case a project developer has mortgaged and registered for mortgage of investment projects for construction of buildings other than houses, other investment projects for construction or off-the-plan construction in projects mentioned above as per the law, before selling construction in the projects, the project developer must apply to revise mortgaged contents to withdraw collateral.
- Land registration offices shall proceed with registration for mortgage of off-the-plan assets attached to land by acknowledging registration contents according to information declared in applications.
Applicants must be legally responsible for the legality, truthfulness and accuracy of declared information and of documents and papers in applications.
Are foreign-invested enterprises allowed to accept land mortgages in accordance with Vietnamese law?
Are foreign-invested enterprises allowed to accept land mortgages in accordance with Vietnamese law?
Pursuant to Clause 1, Article 35 of Decree No. 21/2021/ND-CP on the mortgagee of individuals and business entities that are not credit institutions in form of land use right and assets attached to land belonging to households and individuals using land prescribed as follows:
Accepting mortgage of individuals and business entities that are not credit institutions in form of land use right and assets attached to land belonging to households and individuals using land
Mortgage of individuals and business entities that are not credit institutions in form of land use right and assets attached to land belonging to households and individuals using land shall be accepted when all following conditions are met:
1. Mortgagees are business entities according to Land Law, individuals are Vietnamese nationals with full legal capacity;
2. Accepting mortgage as security for obligation fulfillment does not violate any prohibitions of the Civil Code and other relevant law provisions, and not contradict social morals in contract relationships relating to investment projects, construction projects, outsourcing projects, services and other transactions;
3. In case secured obligations include interest payment, interests that arise as a result of late payment, interest of principle of undue debt, interest of principle of due debt, interest of unpaid interest or other interests shall not exceed agreed limit of interest under Clause 2 Article 357, Clause 5 Article 466 and Article 468 of the Civil Code. In case agreements on taking actions against failure to repay debt within the deadline of parties with obligations are produced while no other regulations and law, take actions against each case of failure to repay debt in a timely manner only once;
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Thus, mortgagees are business entities according to Land Law. Specifically, according to the provisions of Clause 27, Article 3 of the 2013 Land Law of Vietnam, business entity means an enterprise, a cooperative or another business entity as prescribed by the civil law, excluding foreign-invested enterprises.
Thus, foreign-invested enterprises are not allowed to accept land mortgages in accordance with Vietnamese law.
On the other hand, the following organizations are allowed to accept mortgage of land use rights including:
- Enterprise
- Cooperative
- Business entity according to the provisions of civil law.
What is the registration application for mortgage of land use rights in case the mortgagee is not a credit institution?
According to the provisions of Article 27 of Decree No. 99/2022/ND-CP on registration application for certified ownership of land use rights and property on land as follows:
Registration application for certified ownership of land use rights and property on land
1. An application form, made according to Form No. 01a in the Appendix (01 original).
2. The security contract or the security contract that is notarized or authenticated, in case the Law on Land, the Law on Housing and other relevant laws so stipulate (01 original or 01 certified true copy).
3. Certificate (original), except for the case specified in Clause 2, Article 35 of this Decree.
Thus, registration application for certified ownership of land use rights and property on land includes:
- An application form, made according to Form No. 01a in the Appendix (01 original).
- The security contract or the security contract that is notarized or authenticated, in case the Law on Land, the Law on Housing and other relevant laws so stipulate (01 original or 01 certified true copy).
- Certificate (original), except for the case specified in Clause 2, Article 35 of Decree No. 99/2022/ND-CP.
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