Newest regulations on the operating capital of the land development funds in Vietnam

Newest regulations on the operating capital of the land development funds in Vietnam (Internet image)

On July 31, 2024, the Government of Vietnam issued Decree 104/2024/ND-CP regulating the land development funds.

1. Newest regulations on the operating capital of the land development funds in Vietnam

According to the provisions of Article 13 of Decree 104/2024/ND-CP, the operating capital of the land development funds includes:

- Charter capital

The charter capital of the land development funds is provided from the local government's development investment expenditure and the difference between revenues and expenditures (if any) of the land development funds after setting up other funds and fulfilling financial obligations to the State according to legal regulations.

Based on actual conditions and the local budget balancing capacity, the provincial People's Committee will submit to the provincial People's Council a decision on the initial charter capital amount and additional charter capital for the land development funds.

- Other legal mobilized capital as regulated by law, including: Aid, sponsorship, support from international organizations, domestic and foreign organizations and individuals according to aid or sponsorship programs or projects, and other lawful capital sources as prescribed.

The provision of charter capital for the land development funds is carried out in accordance with the laws on public investment and the State budget applied to off-budget state financial funds.

The operating capital of the land development funds is deposited in the provincial State Treasury, state-dominated commercial banks in the area to ensure safety, efficiency, and is stipulated in the charter of the organization and operation of the land development funds.

The land development funds opens separate accounts at the provincial State Treasury, payment accounts at state-dominated commercial banks in the area to manage the Fund's charter capital. The Fund’s charter capital is only used to fund advances and be reimbursed in accordance with Decree 104/2024/ND-CP.

2. Newest guidelines for using the operating capital of the land development funds in Vietnam

The use of the operating capital of the land development funds in Vietnam is specifically regulated in Article 14 of Decree 104/2024/ND-CP as follows:

- The operating capital of the land development funds is used to:

+ Fund advances to project investors using state budget capital, state units, and organizations to carry out compensation, support, and resettlement according to land and housing laws (except for investments using non-state budget capital).

+ Fund advances to land development organizations to create and develop resettlement land funds and generate land funds for auctioning land use rights to raise state budget revenue.

+ Fund advances to organizations assigned to implement land support policies for ethnic minority communities.

+ Fund advances for other tasks as prescribed by law.

- The advancement of funds from the Fund is implemented according to the provisions of Articles 15 and 16 of Decree 104/2024/ND-CP; the repayment of advances for the Fund is implemented according to the provisions of Article 18 of Decree 104/2024/ND-CP.

More details can be found in Decree 104/2024/ND-CP which takes effect in Vietnam from August 1, 2024.

Decision 40/2010/QD-TTg of the Prime Minister of Vietnam on the promulgation of a model regulation on the management and use of the land development funds ceases to be effective from the date Decree 104/2024/ND-CP takes effect.

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