Can leased land with annual land rent in Vietnam be transferred?

Can leased land with annual land rent in Vietnam be transferred? (Image from the Internet)

When is the land leased by the State with annual land rent in Vietnam?

According to Clause 3, Article 120 of the Land Law 2024, the State leases land with the collection of annual land rent in the following cases:

- Cases that do not fall under the following:

+ Using land for implementing investment projects on agricultural, forestry production, aquaculture, or salt production;

+ Using land for industrial zones, industrial clusters, high-tech zones, worker accommodations in industrial zones; land used for public purposes with a business purpose; using commercial land for tourism activities, office business;

+ Using land to build rental social housing according to the housing law.

- Cases that fall under the above but there is a demand to pay annual land rent.

- Public service providers assigned land by the State without collecting land levy choosing to convert to the form of leasing land with annual land rent for the area of production, business, service provision when public service provider has a need.

Can leased land with annual land rent in Vietnam be transferred?

According to point b, Clause 2, Article 37 of the Land Law 2024, individuals leased land by the State with the collection of annual land rent have the rights to sell their owned assets attached to the land, sell their owned assets attached to the land, and the right to lease in the land lease contract when meeting the conditions stipulated in Article 46 of the Land Law 2024.

Article 46 of the Land Law 2024 prescribes the rights and obligations of individuals leased land by the State with annual land rent collection not regarding the rights to transfer the leased land. Instead, individuals leased land by the State with annual land rent can only sell their owned assets attached to the land, sell their owned assets attached to the land, and the lease rights in the land lease contract.

In summary, when the land has been leased with annual land rent, it cannot be directly transferred, but individuals leased land by the State with annual land rent may convert to the form of one-time land rent for the entire lease period to carry out the transfer of land use rights (according to point b, Clause 1, Article 33 of the Land Law 2024).

Note that economic organizations, public service providers, individuals, overseas Vietnamese, and foreign-invested economic organizations currently leased land by the State with annual land rent can choose to convert to leasing land with one-time payment for the remaining lease period only when they fall under the case of being leased land with one-time rent for the entire lease period according to the law (pursuant to Clause 1, Article 30 of the Land Law 2024).

If direct transfer is not allowed, is it permissible to resell the lease contract in Vietnam?

According to point b, Clause 2, Article 37 of the Land Law 2024, individuals leased land by the State with the collection of annual land rent have the rights to sell their owned assets attached to the land, sell their owned assets attached to the land, and the right to lease in the land lease contract when meeting the conditions stipulated in Article 46 of the Land Law 2024.

Additionally, Clause 37, Article 3 of the Land Law 2024 stipulates that the lease right in a land lease contract is the right of the land user formed when the State leases land with the collection of annual land rent. The land user is allowed to transfer the lease right in the land lease contract; the transferee of the lease right in the land lease contract shall inherit the rights and obligations of the land user as specified in this Law and other relevant legislation.

As regulated above, when the land has been leased with annual land rent, direct transfer of land use rights is not permitted. Conversely, organizations, individuals, and public service providers may sell their owned assets attached to the land and the lease rights in the land lease contract when they meet the legal conditions.

In summary, if the land has been leased with annual land rent and cannot be directly transferred, then it is permissible to resell the lease contract. The buyer of the assets attached to the land and the lease right in the land lease contract will continue to lease the land according to the determined purpose and remaining land use term; inheriting the rights and obligations of the land user according to the law (point b, Clause 2, Article 37; point c, Clause 1, Article 34; point b, Clause 2, Article 37; point d, Clause 2, Article 41 of the Land Law 2024).

>> CLICK HERE TO READ THIS ARTICLE IN VIETNAMESE