3 ways for FDI enterprises to lease industrial land in Vietnam
Foreign-invested enterprises, when they want to rent land to build factories or expand production in Vietnam, can only rent land from the State, not from individuals or households using land. FDI enterprises can lease land through the following forms:
- Re-rent from another business
The foreign enterprise will sub-lease land use rights from another enterprise that has leased land from the State.
- Land lease from the government
The investor will make a land lease contract with the government/authorities. Land-using enterprises must pay land rent to the government in the form of one-time payment or monthly or annual payment.
- The government allocates land for enterprises to use
This case is usually only for foreign enterprises using land to invest in developing housing projects and infrastructure construction projects. Enterprises must pay the government land use fees.
Can FDI enterprises transfer or sub-lease the leased land?
According to Clause 2, Article 149 and Article 174 of the Vietnam Land Law 2013, foreign-invested enterprises can transfer their land use rights, their owned assets attached to the land, as well as sub-lease the leased land.
Industrial land rental price in Vietnam
Industrial land rental price is usually calculated according to the following formula:
- One-time payment: Land rent = Rented area x Land unit price paid once.
- Paid annually: Land rent = Lease area x Land rental unit price
The unit price of land depends on many factors such as: land type, land location, winning unit price of the land lease term…
Reference: The price of industrial land in Vietnam Q3 2020, the price does not include 10% value-added tax:
Dossier to lease industrial land for foreign investors
Receipt of documents
The department of land management under the Department of Natural Resources and Environment of the Provincial People’s Committee will be the unit to receive, appraise the dossier and have the right to issue a decision on land lease.
Dossier of industrial land lease for foreign-invested enterprises
FDI enterprises should fully prepare the following documents:
– An application for land allocation or land lease.
– Copy of investment certificate (notarized).
– A copy of the document certifying that the land is not subject to ground clearance (notarized).
– Copy of business establishment license (notarized).
– Written assessment of land use needs.
– Copy of DTM – approved EIA report (notarized).
– A copy of the document confirming the deposit for project implementation (notarized).
– A copy of the approved detailed planning drawing (notarized).
Source: DHLaw, Vietnam Land Law 2013