Can land for industrial parks be mortgaged in Vietnam? What are conditions for the exercise of the rights to mortgage land use rights in Vietnam?

1. Can land for industrial parks be mortgaged in Vietnam?

According to Clause 3, Article 149 of the Land Law 2013 as follows:

3. Economic organizations, households, individuals, overseas Vietnamese and foreign- invested enterprises that invest in production and business in industrial parks, industrial clusters or export processing zones are entitled to sublease land together with infrastructure from other economic organizations, overseas Vietnamese or foreign-invested enterprises that have invested in the construction and commercial operation of infrastructure, and have the following rights and obligations:

a/ In case of subleasing land with full one-off rental payment for the entire lease period, they have the rights and obligations prescribed in Article 174 of this Law;

b/ In case of subleasing land with annual rental payment, they have the rights and obligations prescribed in Article 175 of this Law.

In Clause 2, Article 174 of the 2013 Land Law, it is stipulated as follows:

2. Economic organizations that are allocated land with land use levy or leased land with full one-off rental payment for the entire lease period by the State have the following rights:

a/ To transfer land use lights and land-attached assets under their ownership;

b/ To lease land use rights and land-attached assets under their ownership in case of being allocated with land use levy by the State and to sublease land use rights and land-attached assets under their ownership in case of being leased land with full one-off rental payment for the entire lease period by the State;

c/ To donate land use rights to the State and communities for construction of facilities for common public interests of the communities and donate land-attached gratitude houses in accordance with law;

d/ To mortgage with land use rights and land-attached assets under their ownership at credit institutions which are licensed to operate in Vietnam;

e/ To contribute land use rights and land-attached assets under their ownership as capital for cooperation in production and business with organizations, individuals, overseas Vietnamese or foreign-invested enterprises in accordance with law.

Thus, if your company leases land with full one-off rental payment for the entire lease period, you will have the right to mortgage with land use rights and land-attached assets at banks in Vietnam.

2. What are conditions for the exercise of the rights to mortgage land use rights in Vietnam? 

Pursuant to Article 188 of the 2013 Land Law stipulates as follows:

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.

According to this Article, in order to exercise of the rights to mortgage land use rights in Vietnam, it is necessary to fully satisfy the above conditions.

Best Regards!