Guidance on land recovery requirements applied in case of terminating investment projects as prescribed in laws on investment in Vietnam

Guidance on land recovery requirements applied in case of terminating investment projects as prescribed in laws on investment in Vietnam

Pursuant to the provisions of Clause 2, Article 1 of Decree 10/2023/ND-CP, the following land recovery formalities shall be applied in case of terminating investment projects as per laws on investment, except as the State recovers land under clause 1 of Article 64 and clause 1 of Article 65 in the Law on Land:

(1) If the State assigns land subject to land use levies, or lease out land for a lump-sum land rent paid for the entire lease period, land recovery formalities in Vietnam shall be taken as follows:

- The investor is entitled to the 24 months' grace to continue to use the assigned or leased land from the day on which the investment project is terminated as defined in laws on investment;

- Within the 24 months’ grace from the day on which the investment project is terminated in accordance with law, an investor is entitled to transfer the land use right or sell legal land-attached property to another investor by operation of law.

After expiry of the 24 months’ grace, if the investor fails to do so, the State may recover land without paying any compensation for such land or legal land-attached property, except as any force majeure event specified in clause 1 of Article 15 of Decree 43/2014/ND-CP takes place:

+ Natural disasters, environmental disasters;

+ Fires and epidemics;

+ Wars;

+ Other Force majeure circumstances as decided by the Prime Minister.

(2) If the State leases out land and collects land use levy on an annual basis, land recovery formalities in Vietnam shall be as follows:

- The investor is entitled to the 24 months' grace to continue to use the leased land from the day on which the investment project is terminated as defined in laws on investment;

- Within the 24 months’ grace from the day on which the investment project is terminated as stipulated in law, the investor is entitled to sell legal land-attached property to another investor as prescribed in law.

The State recovers land of the seller of property attached to the leased land to let it out to the buyer of such property.

After expiry of the 24 months’ grace, if the investor fails to do so, the State may recover land without paying any compensation for such recovery of land or legal land-attached property, except as the force majeure event specified in clause 1 of Article 15 of Decree 43/2014/ND-CP takes place:

+ Natural disasters, environmental disasters;

+ Fires and epidemics;

+ Wars;

+ Other Force majeure circumstances as decided by the Prime Minister.

Mai Thanh Loi

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