Is it possible to mortgage the land of a company that is leased by the state of Vietnam?

Is it possible to mortgage the land of a company that is leased by the state of Vietnam?

I have the following questions: My business has been using land leased by the State for 50 years. In 2016, my business was granted a LURC certificate. In the certificate, it was stated that the land use levy was exempt for 11 years and the payment had already been settled for the rest of the lease period. Is it possible to mortgage the right to use this leased land? I’m looking forward to your answer. Best regards.

Answer:

According to Clause 2, Article 174 of the Land Law 2013, economic organizations that are allocated land with a land use levy or leased land with full one-off rental payment for the entire lease period by the State have the following rights:

- To transfer land use rights and land-attached assets under their ownership;

- 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;

- 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;

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

- 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, your company can use the land use right as a mortgage to perform its obligations.

Can a public non-business unit that has not yet self-financed itself lease land in Vietnam?

Hi, I'm currently in legal trouble. The consulting team asked me: Can a public non-business unit that is not financially self-sufficient can lease land? Looking for support?

Answer:

Clause 3, Article 54 of the 2013 Land Law stipulates cases of land allocation without land use levy as follows:

The State shall allocate land without land use levy in the following cases:

3. Public non-business organizations that are not self-financed and use land for office construction.

Thus, for public non-business units that are not yet self-financed, they are eligible to be allocated land without collecting land use levy.

At the same time, according to Clause 2, Article 173 of the Land Law 2013, the rights and obligations of organizations that are allocated land without land use levy by the State as follows:

2. Organizations to which the land is allocated by the State without land use levy may not exchange, transfer, donate, lease land use rights; mortgage, contribute land use rights as capital, and are not entitled to compensation upon land expropriation by the State.

Thus, a public non-business unit that is not yet self-financed does not have the right to lease land because this unit is allocated land by the State without collecting land use levy.

What are the regulations on land leases from the State of Vietnam?

What are the regulations on land lease from the State? Hi Lawnet. I have the following questions: What are the current regulations on land lease from the State? Which legislative document stipulates this matter? I’m looking forward to hearing from you soon. Best regards!

Answer:

Currently, the State's land lease is regulated in Article 56 of the Land Law 2013 with the following contents:

- The State may lease land and collect an annual land rental or full one-off rental for the entire lease period in the following cases:

+ Households and individuals that use land for the purpose of agriculture, forestry, aquaculture or salt production;

+ Households and individuals that need to further use agricultural land that exceeds the land allocation quotas prescribed in Article 129 of this Law;

+ Households and individuals that use land for trading and services, mining activities, production of construction materials, production of ceramic products, and non-agricultural production establishments;

+ Households and individuals that use land for construction of public facilities for commercial purpose;

+ Economic organizations, overseas Vietnamese and foreign-invested enterprises that use land to implement investment projects in agriculture, forestry, aquaculture or salt production, for non-agricultural business and production purpose, for construction of public facilities for commercial purpose, and for implementation of investment projects on houses for lease;

+ Economic organizations, self-financed public non-business organizations, overseas Vietnamese and foreign-invested enterprises that use land for construction of non-business facilities;

+ Foreign organizations with diplomatic functions that use land to build offices.

- The State may lease land to and collect annual rentals from people’s armed forces units for the purpose of agriculture, forestry, aquaculture or salt production, or in combination with national defense or security tasks.

The above is the response regarding land lease from the State. You can find out more information on this at the Land Law 2013.

Sincerely!