Can agricultural land be mortgaged to get a bank loan in Vietnam?

Can agricultural land be mortgaged to get a bank loan in Vietnam?

In Clause 1, Article 179 of the Land Law 2013, rights and obligations of households and individuals using land are as follows:

1. Households or individuals that use agricultural land allocated by the State within land use quotas, are allocated land with land use levy or leased with full one-off rental payment for the entire lease period, have land use rights recognized by the State, or obtain land through exchange, transfer, inheritance or donation, have the following rights and obligations:

a/ The general rights and obligations prescribed in Article 166 and Article 170 of this Law;

b/ To exchange agricultural land use rights with other households and individuals within the same commune, ward or township;

c/ To transfer land use rights in accordance with law;

d/ To lease land use rights to other organizations, households, individuals or overseas Vietnamese investing in Vietnam;

e/ Individuals using land are entitled to bequeath their land use rights in accordance with their will or law.

If any member of a household to which land has been allocated by die State dies, land use rights of that member may be inherited in accordance with his/her will or law.

If the heir is an overseas Vietnamese who falls into the category defined in Clause 1, Article 186 of this Law, he/she is entitled to inherit land use rights. Otherwise, he/she is only entitled to receive the value of the inherited land use rights;

e/ To donate land use rights under Point c, Clause 2, Article 174 of this Law and to donate land use rights to households, individuals or overseas Vietnamese who fall into the category defined in Clause 1, Article 186 of this Law;

g/ To mortgage land use rights at credit institutions which are licensed to operate in Vietnam, or at other economic organizations or individuals in accordance with law;

h/ To contribute land use rights as capital to organizations, households, individuals or overseas Vietnamese for cooperation in production or business;

i/ In case the land is subject to recovery for project implementation, land users are entitled to invest on land by their own or to lease land use rights to the investor or to contribute land use rights as capital to the investor for project implementation in accordance with the Government’s regulations.

According to Clause 1, Article 188 of the 2013 Land Law, it stipulates:

1. Land users may exercise the rights to exchange, transfer, lease, sublease, inherit, donate or mortgage land use rights and contribute land use rights as capital when meeting the following conditions:

a/ 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 this Law;

b/ The land is dispute-free;

c/ The land use rights are not distrained to secure judgment enforcement;

d/ Within the land use term.

2. In addition to the conditions specified in Clause 1 of this Article, when exercising the rights to exchange, transfer, lease, sublease, inherit, donate or mortgage land use rights and contribute land use rights as capital, land users must also be eligible under Articles 189, 190, 191, 192, 193 and 194 of this Law.

3. The exchange, transfer, lease, sublease, inheritance, donation or mortgage of land use rights or contribution of land use rights as capital must be registered with the land registration agency and will take effect from the time of registration in the cadastral book.

Thus, your family, while using agricultural land allocated by the State within the limit, can mortgage the use right to get a bank loan when meeting the conditions specified above in Vietnam.

What are cases in which change of land use purpose requires permission by competent state agencies in Vietnam?

Pursuant to Article 57 of the 2013 Land Law stipulating change of land use purpose, according to which:

1. Cases in which change of land use purpose requires permission by competent state agencies:

a/ Change of land for rice cultivation to land for perennial crops, forests, aquaculture or salt production;

b/ Change of land for other annual crops to land for saltwater aquaculture, salt production or aquaculture in ponds, lakes or marshlands;

c/ Change of land for special-use forests, protection forests or production forests to land for other purposes within the type of agricultural land;

d/ Change of agricultural land to non-agricultural land;

e/ Change of non-agricultural land which is allocated by the State without land use levy to non-agricultural land which is allocated by the State with land use levy, or to leased land;

f/ Change of non-agricultural land which is not residential land to residential land;

g/ Change of land for construction of non-business facilities or land for public purposes involving commercial purpose, or non-agricultural land for business and production purposes which is not land for trading or services to land for trading or services; change of land for trading or services or land for construction of non-commercial facilities to land for non-agricultural production establishments.

2. When changing the land use purpose under Clause 1 of this Article, land users shall fulfill financial obligations as prescribed by law. The land use regime and the rights and obligations of land users are those applicable to the type of the land used for the new purpose.

According to this Article, if falling into one of the above cases, individuals or organizations must obtain permission from state agencies to change the use purpose in Vietnam.

Best Regards!