Hong Kong: Vietnam - Legal Overview - Land

Last Updated: 20 November 1995
Most Read Contributor in Hong Kong, September 2016
The laws of Vietnam are complex and new legislation is constantly being introduced. What follows is no more than an introductory overview that we hope will assist investors to decide which areas of law they will need to research further.

This summary is, necessarily, selective and is no substitute for detailed legal advice.

1. All land in Vietnam belongs to the People and its use is administered on their behalf by the State. Private ownership is not possible although the right to use land can be allocated by the State. Land cannot, subject to exceptions, be transferred or assigned without State consent.

2. The Law on Land of 14 June 1993 forms the basis of all existing land law. Under this, land was allocated for a specific purposes, for a fixed term of years.

In return, rent was to be paid unless the land was used for, broadly, an agricultural/ non -industrial purposes, or a specific exemption was obtained. In practice, rental payments were not strictly enforced.

3. In principle, it seems to have been envisaged that land for public use / agricultural / non-industrial purposes would be allocated by the grant of a land use rights certificate, and land for all other purposes would be dealt with the grant of a lease.

4. The distinction between the two, however, became blurred and, in practice, land use rights certificates were commonly granted in respect of all types of land use. On transfer of land or upon a change in its use, as approved by the State, a fresh land use rights certificate was required to be issued and a fee paid to the State. In practice however, such fees, like rental payments often went unpaid.

5. Gradually the original Vietnamese grantees of land began to transfer their rights to other Vietnamese, who paid for the value of the land. This led to a measure of speculation and an increase in prices.

6. The Law on Foreign Investment and the Law on Land permitted land to be contributed by a wide ranging list of organisations, both State and private, to a foreign invested enterprise, in return for which the contributing Vietnamese party was allocated a "share" in the venture equivalent to the value placed on the land use right contributed. The actual valuation was a matter for negotiation between the parties.

7. In the early years of market opening, the contribution was made and a land use rights certificate was issued in name of the Vietnamese Party. Following representation by foreign parties, land use rights certificates were issued to the joint venture company- some issued by lease and many by way of land use rights certificate. Whatever the form, the grant would be issued by the local People's Committee and/or the Department of Lands Administration for the duration of the investment licence.

8. Early in 1995, the position altered. Legislation sought to make it clear that only leases were to be granted of land that did not fall into the category of agricultural /non-industrial/ public use.

At the same time, the Law on Land was apparently changed so that, effectively, only State related and quasi-State enterprises could now contribute land by way of a lease to a foreign invested enterprise (private enterprises were now excluded). This may well not be the final position.

9. Foreign Invested Enterprises may lease land directly from the State, though they may not sublet it unless the transaction is in relation to an Export Processing/ Industrial Zone.

10. Decision 1417 of 31 December 1994 sets out how the rents for foreign invested enterprises are to be calculated. These are very detailed, but depend broadly upon the location of the land and its use. The rents stipulated do not include clearance or compensation costs.

11. If however, a Vietnamese Party makes a capital contribution to a foreign invested enterprise in the form of the right to use land, the foreign invested enterprise, is not liable for rent.

The valuation to be placed on that capital contribution is determined by law.

12. The rent may be increased by the Government every 5 years though not above a 15% increase. Rent increases do not apply where the Vietnamese party contributes land as part of its capital contribution nor do they apply where rent is paid in advance as a lump sum for the duration of the project.

13. Decision 1417 also allows a 50% reduction in rental during any construction period and provides for a reduction in rental (up to a maximum of 15%) where the JVC has made a substantial lump sum payment in advance. This reduction does not apply where the land is contributed by a Vietnamese party as its capital contribution.

14. Further legislation, effective from early 1995, was designed to bring to an end the situation where fees for land allocation/transfer went unpaid. Circular 2of 4 January 1995 Stipulated that all transfers /grants and changes in use made after 17 August 1994, or any made, but not registered within the period between 15 October 1993 and 17 August 1994, would require to be registered and a fee payable.

15. At the same time Decree 18 CP was issued on 13 February 1995, though back- dated to I January 1995.

The effect, broadly, is that enterprise.,; granted land use rights before 1995 must convert these to leases from the State and pay rent. The level of rent will be fixed by the relevant People's Committee within a framework set by the Ministry of Finance.

16. If the enterprise has not paid for the value of the land, or has paid out of State finds, it will have to pay the rental in full. If however it has already paid for the value of the land, the money paid to the State may be offset against the rental and treated as rent paid.

17. For existing joint ventures where land use rights have already been contributed as the capital contribution of the Vietnamese party and land use certificates issued to the JVC, the Vietnamese party must still relinquish its land use rights, obtain a lease and pay rental as above.

18. The legislation as it stands regarding land use rights/ leases is ambiguous and unclear in parts.

There have been calls for its amendment and clarification. This is expected to occur at the next Session of the National Assembly.

NOTE: The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

If you would like further advice please contact: David Ellis, Johnson Stokes & Master, 16th Floor, Princes Building, 10 Chater Road, Hong Kong; Tel 2843 4226; Fax no. : 2845 9121. Alternatively do a text search "Johnson Stokes and Master" and "Business Monitor".

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Mondaq Advice Centre (MACs)
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.