Additional regulations on land under Decree 10/2023/ND-CP in Vietnam

Additional regulations on land under Decree 10/2023/ND-CP in Vietnam (Internet image)

On April 3, 2023, the Government of Vietnam issued Decree 10/2023/ND-CP on amendments to Decrees on instructions for implementation of the Law on Land.

Decree 10/2023/ND-CP has added guiding regulations on land as follows:

1. Commencement date from which land rents are calculated in case of extension or adjustment of the land use term in Vietnam

Specifically, Decree 10/2023/ND-CP adds regulations on commencement date from which land rents are calculated in case of extension or adjustment of the land use term in Article 18a to Decree 44/2014/ND-CP, specifically as follows:

(1) If a land user is entitled to extension of the land use term granted by a competent state authority upon expiry of the land use term, land rent calculation shall commence on the first date of the subsequent lease term.

(2) If a land user receives a competent state authority's decision on adjustment of the land use term, the commencement date of land rent calculation shall be subject to the following regulations:

+ If they use land leased out by the State under a lump-sum rent payment arrangement for the entire lease term, such rent payment shall be calculated from the day on which the State decides the adjustment of land use term. Collecting, offsetting or refunding land rents shall be subject to laws on collection of land rents;

+ If they use land leased out by the State under an annual rent payment arrangement, calculation of the land rent in the first cycle of fixed land rent shall commence on the effective day of the State’s decision to adjust the land use term as a basis for calculation of the annual land rent.

2. Conditions and criteria for grant of permission to repurpose rice, protection forest or special-use forest land with the aim of executing investment projects in Vietnam

In order to be allowed to change the use purpose of paddy land, protective forest land or special-use forest land to another purpose for implementing an investment project, the following conditions and criteria must be met:

- These investment projects need to obtain approval of investment policies or certificates of investment registration pursuant to law on investment.

- These investment projects have to conform to the district-level land use planning schemes, and be on the list of district-level annual land use plans that is approved in accordance with law.

- There are compensatory afforestation plans or written notifications of discharge of obligations to pay for compensatory afforestation in accordance with forestry law in case of repurposing protection forest or special-use forest land; there are topsoil use plans and written documents on discharge of obligations to pay for protection and development of rice land in accordance with law on crop production in case of repurposing arable land dedicated to rice cultivation.

- There is preliminary environmental impact assessment or environmental impact assessment conducted under law on environmental protection (if any).

- Agencies and persons having authority to appraise and approve policies on repurposing of protection forest land, special-use forest land or rice cultivation land shall bear responsibility for implementation of those specified in clause 2 and 3 of this Article;

They shall disclaim all responsibility for others appraised, approved, decided, approved or handled by competent agencies or persons before.

(Adding Article 68a to Decree 44/2014/ND-CP)

3. Auctioning of rights to use the State’s assigned land subject to the land use levy, or the State’s leased land in Vietnam

The auctioning of rights to use the State’s assigned land subject to the land use levy, or the State’s leased land is as follows

* In order to be eligible to attend an auction of land use right, an entity shall fully meet the following conditions:

- They are categorized as one of the subjects of the State's assignment and lease of land as defined in Article 55 and 56 in the Law on Land. If a parcel of land, or a project sited at one or more parcels of land under cross ownership of two (02) or more companies as provided in laws on enterprises, is put up for auction, only one company is allowed to participate in that auction;

- They have to meet the conditions specified in clause 3 of Article 58 in the Law on Land, clause 2 and clause 3 of Article 14 herein;

- They have to pay a deposit which is 20% of total value calculated at the starting price of the parcel or the complex of parcels at auction before coming up for the auction of land use right;

- They are not prohibited from attending the auction as prescribed in laws;

- They have to meet the conditions defined in laws on housing and laws on real estate business in order to attend the auction of the right to use land for execution of housing and other real estate business projects.

* Conditions for eligibility of family households and individuals to attend auctions of land use rights:

- They are categorized as one of the subjects of the State's assignment or lease of land according to the regulatory provisions of Article 55 and 56 in the Law on Land, and meet the conditions specified in point c and point d of clause 1 of this Article;

- If a family household or individual attends an auction of the right to use land for execution of an investment project, the conditions specified in point a of this clause, point b and point dd of clause 1 of this Article.

* Conditions of land put up for an auction, including:

- The land at auction has to meet all requirements set out in clause 1 of Article 119 in the Law on Land;

- The starting price at which the right to use such land is auctioned is decided by a competent state authority;

- The process of auctioning of land use right is applicable to a single parcel;

- The cadastral map in 1:500 scale of the parcel used for execution of a housing construction project has been available with approval from a competent authority.

When the winner of an auction is announced, an advance payment and interest (if any) are converted into a deposit that secures financial obligations that such auction winner must take on in the role of a land user.

If that auction winner does not pay or underpays the successful bid as stated in point d of clause 5 of Article 68 herein, the auction winner shall not be entitled to their deposit refund.

If the auction winner overpays the required deposit, they shall be entitled to the refund of the overpayment in accordance with regulations.

(Adding Article 17a to Decree 44/2014/ND-CP)

4. Land recovery processes and procedures applied in case of terminating investment projects as prescribed in laws on investment in Vietnam

Specifically, the land recovery processes and procedures applied in case of terminating investment projects as prescribed in laws on investment are prescribed as follows:

- The investment registration agency or investor sends the written notice of termination of the investment project using land as defined in laws on investment to the natural resource and environment authority having jurisdiction over the project land, except as stipulated in point d of clause 2 of Article 48 in the Law on Investment.

- Upon receipt of that written notification of termination of the investment project, the natural resource and environment authority shall have the duty to check and determine whether land of that investment project is recovered.

- Land recovery and implementation of land recovery decisions shall be subject to Article 15b and clause 2, 3 and 4 of Article 66 in Decree 44/2014/ND-CP.

(Adding Article 65a to Decree 44/2014/ND-CP)

5. Processes and procedures for assigning or leasing out land as prescribed in clause 3 of Article 29 in the Law on Investment

Processes and procedures for assigning or leasing out land as prescribed in clause 3 of Article 29 in the Law on Investment are as follows:

- With respect to the case in which an investor is approved of as prescribed in clause 3 of Article 29 in the Law on Investment, processes and procedures for assigning land and leasing out land or granting permission to repurpose land that are specified in clause 3 of Article 68 in Decree 10/2023/ND-CP may be applied.

Competent authorities carry out procedures for approval of an investor if that investor meets the conditions specified in relevant laws.

- Agencies and persons having authority to deal with procedures for assigning land, leasing out land or repurposing land shall disclaim all responsibility for implementation of regulations concerning approval of investment policies and selection of investors prescribed in law on investment, housing and other relevant laws.

(Adding Article 68b to Decree 44/2014/ND-CP)

More details can be found in Decree 10/2023/ND-CP effective from May 20, 2023.

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