|
I1.
In Vietnam, the land is owned by the entire
national and managed on the people’s behalf by the
State. The Constitution gives citizens the right
to built dwelling houses according to law,
protects the right of lessees and lessers, give
citizens the right to transfer their lands use
rights but not the land itself, and entrusts the
land or organizations and individuals for stable
and long term use. For foreign investment
projects, the maximum time for leasing land is 50
years ( 70 years in some special cases).
There are 2 ways for a FIE to acquire
land for its project
o
By a direct lease from the State for the duration
of the investment project, with rent being paid
annual or on a lump sum basis; or
o
By the Vietnamese partner to a joint venture or to
a BCC leasing land from the State and subsequently
contributing the value of the land use right to
the joint venture or business cooperation.
2.
Land rentals
FIEs using land, water and sea surfaces leased to
them by the State for implementing their projects
must pay land rentals
a-Urban
areas
Urban areas include any land located within
cities, towns and townships which is used for
building dwelling houses and offices of
establishments, organizations and manufacturing
and business establishments, and for constructing
infrastructure for the purpose of public interest,
national defense and security, and other purposes,
and those areas have been divided into 5 groups
with different rental rates for each group.
The applicable rates of land rent in urban areas
are:
|
Group No |
Minimum Rental level (USD/m2/year ) |
Maximum Rental level (USD/m2/year ) |
|
1 |
1.00 |
12 |
|
2 |
0.80 |
9.6 |
|
3 |
0.60 |
7.2 |
|
4 |
0.35 |
4.2 |
|
5 |
0.18 |
2.16 |
b-Non urban areas
The applicable rates of land rent in non-urban
areas are:
|
Group No |
Minimum Rental level (USD/m2/year ) |
Maximum Rental level (USD/m2/year ) |
|
Commune having a boundary adjacent to a Group
1 inner city |
0.18 |
1.08 |
|
Commune having a boundary adjacent to a Group
2 inner city |
0.10 |
0.60 |
|
Delta region |
0.06 |
0.36 |
|
Central region |
0.03 |
0.18 |
|
Mountainous region |
0.01 |
0.06 |
3-Water and Sea surfaces
Rentals for rivers, lakes and bays are between USD
75 and USD 525 /ha/year-the use of water surfaces
in urban areas for construction purposes is
subject to the rate applicable to urban areas
Rentals for sea surfaces are between USD 150 and
USD 600/km2/year-when the area in question varies
from time to time, a rate of USD 1500 to USD
7500/km2/year applies
4.Exemption and reduction:
Land rentals are exempted while capital
construction of a project is being carried out
The amount of rent payable is reduced by 5% if the
rent is paid in advance for at least 5 years, if
paid for more than 5 years in advance, the rent is
reduced by 1% for each additional year but by not
more than 25% of the total rent payable. Where
land rent is paid in a lump sum for a period of
more than 30 years, a 30% reduction of the payable
land rent will be applied
5.Payment:
A FIE must submit to the relevant authorized
organization a declaration for payment of land
rentals and relevant documents within 1
month from the date of calculation of land rent
which is the date land is hand over to it for use.
The rent is payable on an annual basis or on a
lump sum basis and can be paid in USD or VND
Where
a foreign organization or individual cooperate
with a Vietnamese organization which is licensed
to rent land from the State in constructing
residential houses, it is only required to pay the
land rentals until the residential house are sold
6. Transferring
the right to use land
A transfer of the right to use the land will
attract tax where the right to use the land is
transferred to a third party by a foreigner prior
to the expiry of the term. This would happen in
the situation where a FIE is dissolved prior to
the expiry of the term of the investment license
and the right to use the land is transferred as
part of the liquidation process. The transferor is
liable to pay tax at the rate of 10% for
farm/forestry land and 20% for other types of
land. The value of the land on which the tax rates
are calculated will be stipulated by the relevant
people’s committee.
7.Leasing
property and purchasing residential property
A foreigner may lease premises in Vietnam for
dwelling and business purposes provided that the
legal status of the premises is ensured.
Foreign residents in
Vietnam
can buy house for the duration of their stay in
the country for their personal use. They are able
to buy one house on land leased from the
Government, however, the house will be confiscated
as the authorities do not wish to encourage
property speculation. Houses may only be purchased
from State-owned real estate agencies, and foreign
owners are required to pay land rent.
Potential purchasers should be aware that, when a
foreign owner cease to reside in Vietnam and does
not sell or bequeath the house, the title deeds
will become null and void 90 days after the owner
leaves VN. Such a provision presumes that a seller
would be able to sell the house within 3 months.
8.Mortgaging of value of land use rights and of
assets attached to land
FIEs shall be permitted to mortgage the value of
the land use right and assets accompanied with the
leased land during the leased period at Vietnamese
credit institutions, foreign bank branches, and
joint venture banks between Vietnam and foreign
banks in accordance with the Law on Credit
Institution, to borrow capital for their business
and production operations in accordance with the
current regulations in the following cases:
a. A FIE which has paid its land rent in advance
for many years, and the remaining duration of the
term for which the land rent has been paid is at
least 5 years.
b. A JVC to which the Vietnamese parties make
capital contribution in the form of the land use
right, the remaining duration of which is at least
5 years.
The value of mortgaged land use rights shall
consist of compensation expenses, site clearance,
and the prepaid land rent minus the expired land
rent payments.
|