Procedures for leasing industrial land in Vietnam for FDI enterprises

FDI enterprises need to understand the regulations on leasing industrial land in Vietnam, including terms of leased land, preferential subjects, application procedures… to ensure that the leasing land process is convenient.

Regulations on leasing industrial land for FDI enterprises in Vietnam

Time limit policy when leasing industrial land in Vietnam for FDI enterprises

According to Clause 3, Article 126 of the Land Law 2013, the time limit policy for leasing industrial land in Vietnam with foreign-invested enterprises to implement investment projects in Vietnam will be considered and decided based on investment project or land lease application but not exceeding 50 years.

For projects having large investment capital but slow capital recovery, investment projects in difficult or extremely difficult socio-economic areas, land allocation or industrial land lease can be considered for a time limit not exceeding 70 years.

In case of enjoying investment incentives for FDI enterprises

According to Clause 1, Clause 2, Article 15 and Article 16 of the Investment Law 2020 and Article 110 of the Land Law 2013, FDI enterprises will enjoy investment incentives for the following projects, industries or business areas:

• High-tech activities, high-tech supporting industrial products, research and development, production of products formed from scientific and technological results according to the provisions of law on science and technology.
• Producing new materials, new energy, clean energy, renewable energy; produce products with added value of more than 30%, energy-saving products.
• Producing electronic products, key mechanical products, agricultural machines, cars, auto parts; shipbuilding.
• Manufacturing products of the List of prioritized industrial products for supporting and developing.
• Producing information technology products, software, and digital content.

In addition, if FDI enterprises invest in difficult socio-economic areas, areas with particularly difficult socio-economic conditions, or industrial parks, export processing zones, high technology and economic zones will also enjoy investment incentives.

Exemption or reduction of leasing land

Decree No. 46/2014/ND-CP stipulates that the exemption period for land lease and water surface lease during the basic construction process does not exceed 03 years from the date of decision on land lease or water surface lease.

The exemption period for land lease and water surface lease after the basic construction period is stipulated in Decree No. 46/2014/ND-CP as follows:

• 03 years for projects belonging to the list of areas having investment incentives and new manufacturing and business establishments because of planned relocation or environmental pollution.
• 07 years for investment projects in areas having difficult socio-economic conditions.
• 11 years for investment projects in areas having extremely difficult socio-economic conditions or in the list of special investment incentives fields.
• Finally, 15 years for projects in the list of investment incentive fields and being invested in areas having particularly difficult socio-economic conditions.

Tax exemption and reductions

Businesses are entitled to tax exemptions and reductions when leasing industrial land in Vietnam

When businesses rent industrial land in Vietnam, they will enjoy corporate income tax incentives with 4 levels corresponding to the accompanying cases. For details, please refer to Article 13 of Consolidated Document No. 22/VBHN-VPQH:

• Having applied a tax rate of 10% for fifteen years.
• Applying a tax rate of 10%.
• Having applied a tax rate of 20% for ten years.
• Applying a tax rate of 20% to income of People’s Credit Funds and microfinance institutions.

Imported goods to create fixed assets, raw materials, supplies and imported components for production in accordance with the law will be exempted from import tax.

In addition, the Prime Minister issued Decision No. 25/2023/QD-TTg on reducing land lease in 2023, effective from November 20, 2023. Accordingly, it is decided to reduce 30% of payable land lease (generated income) in 2023 for organizations, units and businesses that are directly leasing land from the State according to regulations, contracts and certificate of land use rights in the form of annual land lease payment.

Procedures for leasing land in industrial parks for FDI enterprises in Vietnam

Understanding the process and procedures for handling documents when leasing industrial land in Vietnam will help foreign-invested (FDI) enterprises receive the earliest results that not affect their investment progress.

Procedures for leasing industrial land in Vietnam

1 Determine a suitable location

Some factors need to be considered when choosing a factory location include:

• Traffic connection: The factory location needs to be convenient for transporting materials and products.
• Raw material sources: The factory should be located near raw material sources to reduce transportation costs.
• Work forces: The factory should be located in an area with abundant, qualified and adapted production requirements work forces.
• Administrative procedures: Investors often prioritize choosing localities that have one-stop administrative procedures to look up information easily, or have supporting units to help apply procedures and paperwork quickly.

2. Applying for a land use right certificate

Certificate of industrial land use rights

a. Profile components

Before leasing industrial land in Vietnam, investors need to prepare all documents mentioned in Clause 1, Article 3 of Circular No. 30/2014/TT-BTNMT:

• Application for industrial land lease.
• Extract the cadastral map of the land plot or extract the exact measurement of the land plot (investors can contact the Department of Natural Resources and Environment to be provided with this information).
• Copy of Investment Certificate or investment policy approval document issued by Management Board of the Industrial Ảeas to the enterprises, accompanied by a written explanation of the investment project.
• In addition, there is also a need for deposit documents, business registration certificates, “ĐTM” decisions or documents on environmental protection procedures, financial reports and confirmation of credit provision…

b. Place of submission/Handling agency

Management Board of Industrial Areas

c. Processing time

According to Point a, Clause 1 and Clause 4, Article 61 of Decree No. 01/2017/ND-CP, the processing time is specified as follows:

• No more than 20 days, excluding time for land recovery, compensation, and clearance.
• For mountainous communes, islands, remote areas, areas with difficult socio-economic conditions, areas with especially difficult socio-economic conditions, the implementation time for each type of procedures stipulated in Article 61 of Decree No. 01/2017/ND-CP are increased by 10 days, meaning of 30 days in total, except for land dispute conciliation procedures.

d. Fees

Fees for granting land use rights certificates are stipulated according to the Resolution of the Provincial People’s Council (different provinces and cities have different fees) in the List of Fees and Charges in Law No. 97/2015/QH13 . Below are the fees for applying for land use rights certificates of organizations in some provinces and cities having many industrial zones:

3. Applying for investment registration certificate

The dossier is stipulated to lease industrial land for FDI enterprises when applying for an investment registration certificate according to the provisions of Clause 1, Article 33 of the Investment Law 2020.

Refer here: Procedures for setting up a foreign-invested company in Vietnam

4. Signing a land lease contract

After being granted an investment registration certificate, foreign investors will be able to set up a company or enterprise in Vietnam. This company will sign a land lease contract with the industrial park infrastructure investor. During this process, the parties will pay land lease according to schedule and hand over the actual land.

5. Paying land lease

FDI enterprises that lease land will have the State collect annual land lease or a one-time land lease for the entire period if those enterprises use land to carry out projects as prescribed in Point d, e Clause 1, Article 56 of the 2013 Land Law:

• Types of land are used for different purposes such as investment in agricultural, forestry, aquaculture, and salt making.
• In addition, there is also land used for non-agricultural business, construction of public works for business purposes, implementation of housing investment projects for rent and construction of public works.

Land rent is stipulated when businesses rent industrial land in 2 cases:

• Collect land lease payment only once for the entire rental period (Clause 2, Article 12, Decree 46/2014/ND-CP):
• For land without water surface:

Land lease cost = area for which land rent must be paid x unit price of land rent paid once for the entire lease period.

• For land with water surface:

Land lease cost = Area for which land lease must be paid x unit price of land rental with water surface collected once for the entire rental period.

• Annual land rental collection (Clause 1, Article 4, Decree 46/2014/ND-CP):

Land lease cost = Percentage (%) multiplied by (x) Land price to calculate land lease cost.

Information compiled from: Land Law 2013, Investment Law 2020,

Law No. 97/2015/QH13, Decree No. 01/2017/ND-CP, Decree No. 46/2012/ND-CP,

Decree No. 46 /2014/ND-CP, Circular No. 30/2014/TT-BTNMT.

See more: Factors affecting investor’s decision to rent a factory or construct a new factory.

See more: Foreign in Vietnam FAQs