Laws of Vietnam

Pursuant to Articles 17, 18 and 91 of the 1992 Constitution of the Socialist Republic of Vietnam; and

Pursuant to Article 3 of the Land Law;

This Ordinance defines the rights and obligations of the organizations in the country to which the State allocates or leases land.

1- The organizations in the country to which the State allocates land comprise:

a/ State agencies, political and social organizations and units of the People's Armed Forces using land for the construction of working offices and for defense and security purposes;

b/ Other State agencies and organizations using land for the construction of projects in different services and domains pertaining to the economic, cultural, social, scientific, technical or diplomatic activities.

c/ Businesses and companies using land for public utility, such as transport routes, bridges, culverts, pavements, water supply and drainage systems, rivers, lakes, dikes, dams, schools, research institutes, hospitals, markets, parks, public gardens, recreation centers for children, public squares, stadiums, airports, sea ports and other public works as defined by the Government;

d/ State-owned businesses, businesses of political and social organizations, defense and security businesses, stock companies, limited liability companies, collective economic organizations using land for agriculture, forestry, aquaculture and salt production.

2- The economic organizations in the country to which the State leases land comprise: State-owned businesses, businesses of political and social organizations, defense and security businesses, stock companies, limited liability companies, collective economic organizations using land for production and business purposes other than agriculture, forestry, aquaculture and salt production.

Article 2.- The bases for determining the rights and obligations of the organizations in the country to which the State allocates or leases land include:

1- Purposes of land use;

2- Duration of the land allocation and lease;

3- Whether or not it has to pay for the use of the land allocated by the State and the modalities for payment when the State allocates or leases the land to it.

Article 3.- The organizations in the country which have been allocated land by the State as stipulated at Points a, b and c of Item 1, Article 1 of this Ordinance, have the right to use land in accordance with the assigned purpose and tenure. They are not allowed to transfer, assign, lease the land use right or use the land as collateral.

1- The State-owned businesses, the businesses of political or social organizations, the defense and security businesses, the stock companies, the limited liability companies and the collective economic units, which are allocated land be the State for use in agriculture, forestry, aquaculture and salt production, have the right:

a/ To contribute capital in the form of the land use right in their joint ventures with the organizations and individuals in the country and foreign organizations and individuals, for continued land use in agriculture, forestry, aquaculture, salt production, expansion of the processing and service industries aimed at developing production as defined by the Government;

b/ To mortgage their land use right together with the property under their ownership already built on that land to the Vietnam Bank, in order to borrow capital for production and business, in accordance with provisions of law,

2- The organizations defined in Item 1 of this Article are allowed to transfer, assign or lease their land use right.

The Government shall make detailed provisions for the quota-based contract system in each State-owned business which is allocated land for use in agriculture, forestry and aquaculture.

2- When a business is allowed to use part of the land allocated under Item I of this Article or to use the land for salt production for other production and business purposes, it must implement the land rent regime for this area as prescribed by law.

Article 6.- The collective economic organization, which is allocated land by the State for uses other than agriculture, forestry, aquaculture and salt production, may mortgage the land use right together with the property under its ownership already built on this land to the Vietnam Bank to borrow capital for production and business, in accordance with prescriptions of law with a view to developing production in the direction of industrialization and modernization. It is not allowed to transfer, assign or lease the right to use this land.

Article 7.- The organization which is allocated land by the State has the obligation:

1. To use the land for the right purpose, in accordance with plan and the Land Law during the tenure;

2. To fulfill its financial obligations, about land use, as prescribed by law;

3. To observe the provisions of the Law on Environmental Protection and not to harm the legitimate interests of the users of the surrounding lands;

4. To pay compensation to the former user of the land which is retrieved and handed over to that organization in accordance with prescriptions of law.

5. To return the unused or wrongly used part of the land to the State;

6. To return the land whenever the authorized State agency decides to retrieve it.

Article 8.- With regard to the organization which is allocated land by the State for uses other than agriculture, forestry, aquaculture and salt production, if it has erected on the land constructions from capital not derived from the State budget when it assigns these constructions together with the land use right, it has to pay to the State budget the charge for land use right transfer as prescribed by the Government.

Article 9.- The economic organization, to which the State leases land, is entitled to mortgage at the State Bank its land use right together with the property under its ownership already built on this land in order to borrow capital for production within the terms of the land tenure prescribed by law. The evaluation of the land use right shall be determined by the Government.

Article 10.- The State-owned businesses, the businesses of political and social organizations and the defense and security businesses are entitled, within the terms of the land tenure, to contribute capital by the value of the land use right in their joint ventures with organizations and individuals inside and outside the country as prescribed by the Government.

Article 11.- The organization, which is leased land by the State for investment in the building of infrastructure and for re-lease at Export Processing Zones and in industrial areas, is entitled to re-lease to investors the land on which infrastructure constructions have been completed.

The Government shall make detailed provisions for the interests and obligations of the organizations engaged in the business of infrastructure constructions as well as the order and procedures for renting and re-leasing the land stipulated at this Article.

Article 12.- The economic organization, to which the State leases land, has the obligation:

1. To carry out the financial obligations on land use as prescribed by law;

2. To use land for the right purpose and in accordance with plan and the land legislation during the term of land tenure;

3. To observe the regulations of the Law on Environmental Protection and not to damage the legitimate interests of the users of the surrounding lands; and

4. To return the land when the authorized State agency decides to retrieve it.

Article 13.- The head of the land use organization takes responsibility before law in the execution of the rights and obligations defined in the land legislation and this Ordinance.

Article 14.- The regulations of this Ordinance concerning the limited liability and stock companies also apply to the private business which have been registered under the Law on private Business, when they are allocated or leased land by the State.

Article 15.- This Ordinance takes effect as from the 1^st of January, 1995. All earlier regulations which are contrary to this Ordinance are now annulled.

Article 16.- The Government shall make detailed provisions for the implementation of this Ordinance.