Joint Circular No. 772/2001/TTLT/TCĐC-NHNN guiding procedures for mortgaging the value of land use rights and assets attached to land of foreign-invested enterprises at credit institutions

JOINT CIRCULAR

Guidelines on Procedures for Mortgaging the Value of Land Use Rights and Assets Attached to the Land of Foreign-Invested Enterprises at Credit Institutions of foreign-invested enterprises at credit institutions

__________________________

Pursuant to Clause 3, Article 92 of Decree No. 24/2000/NĐ-CP dated July 31, 2000 of the Government detailing the implementation of the Law on Foreign Investment in Vietnam and other relevant laws, the Land Administration Department and the State Bank of Vietnam provide guidelines on procedures for mortgaging the value of land use rights of foreign-invested enterprises (including joint ventures and wholly foreign-owned enterprises) at credit institutions (including domestic credit institutions, branches of foreign banks operating in Vietnam, and joint venture banks between Vietnam and foreign countries operating under the Law on Credit Institutions) as follows:

I. DOCUMENTS FOR MORTGAGING THE VALUE OF LAND USE RIGHTS AND ASSETS ATTACHED TO THE LAND

1. Foreign-invested enterprises that have been granted land lease by the State and have paid rent for the entire lease period or have prepaid rent for several years if the remaining lease term is at least five years shall submit the following documents for mortgage:

1.1. Mortgage agreement on the value of land use rights.

The content of the mortgage agreement on the value of land use rights shall be agreed upon by the parties in accordance with the provisions of the law but must include confirmation from the Land Administration Office or the Land Administration - Real Estate Office where the land is located (hereinafter referred to as the Land Administration Office) regarding the land user, land use certificates, current land use status, registration of mortgage; cancellation of registration; change of mortgage registration;

1.2. Certificate of land use right (original);

1.3. Extract of cadastral map of the land plot (with confirmation and stamp of the Land Administration Office) in cases where the certificate of land use right does not contain an extract of the cadastral map of the land plot;

1.4. Receipts for payment of land rent (certified copy by the competent authority for notarization and certification).

2. Joint ventures where the Vietnamese party contributes capital through the value of land use rights if the remaining contribution period is at least five years shall submit the following documents for mortgage:

2.1. Documents specified in Points 1.1, 1.2, and 1.3 of this Section;

2.2. Certified copy of the capital contribution agreement through the value of land use rights by the competent authority for notarization and certification.

3. Foreign-invested enterprises mortgaging the value of land use rights and assets attached to the land (including machinery and equipment attached to factories, construction works, and other assets attached to the land) shall submit the following documents for mortgage:

3.1. Documents specified in Points 1 or 2 of this Section:

3.2. Documents registering ownership of assets;

3.3. Documents proving that the assets belong to the legitimate ownership of foreign-invested enterprises, which are not required to be registered according to Point 1.3 of Circular Joint Circular No. 12/2000/TTLT-NHNN-BTP-BTC-TCĐC dated November 22, 2000 of the State Bank of Vietnam, Ministry of Justice, Ministry of Finance, and the Land Administration Department.

4. When implementing the mortgage of the value of land use rights as stipulated in this Circular, the competent state authorities do not need to issue a written decision allowing the mortgagor to mortgage the value of land use rights but only perform the necessary procedures and confirm in the mortgage agreement on the value of land use rights.

5. Each land plot can only be mortgaged at one credit institution permitted to operate in Vietnam. In cases where foreign-invested enterprises have a certificate of land use rights for multiple plots of land and wish to mortgage them with multiple credit institutions, the foreign-invested enterprises must apply to the competent state authorities for separate certificates of land use rights for each plot in accordance with Circular No. 1417/1999/TT-TCĐC dated September 18, 1999 of the Land Administration Department.

6. The value of land use rights when mortgaged is determined based on the land price issued by the People's Committee of the province or centrally-administered city where the land is located at the time of mortgage.

In cases where the land is leased by the State, the value of land use rights for mortgage includes: prepaid land rent to the State after deducting the rent already paid for the usage period; compensation for losses (if any); costs for leveling and improving the land surface (if any).

II. PROCEDURES FOR IMPLEMENTING THE MORTGAGE OF THE VALUE OF LAND USE RIGHTS

1. Foreign-invested enterprises submit the documents for mortgaging the value of land use rights as stipulated in Part I of this Circular to the Land Administration Office.

2. Within fifteen days from the date of receiving complete and valid mortgage documents, the Land Administration Office reviews the mortgage documents, confirms compliance with legal conditions for mortgage in the mortgage agreement on the value of land use rights; registers the mortgage and enters it into the Land Change Register and Security Transaction Register as prescribed by law; returns the mortgage documents to the foreign-invested enterprise.

If the conditions for mortgage are not met, the Land Administration Office returns the mortgage documents and informs the foreign-invested enterprise of the reasons for non-compliance.

3. Foreign-invested enterprises and credit institutions are responsible for paying fees as prescribed by law.

4. The mortgage agreement on the value of land use rights becomes effective from the date of registration of the mortgage of land use rights by the Land Administration Office.

5. During the mortgage of the value of land use rights, if the foreign-invested enterprise and the credit institution agree to amend the content of the signed mortgage agreement on the value of land use rights, the Land Administration Office will register the changes in the mortgage of the value of land use rights in accordance with the law.

III. PROCEDURES FOR CANCELLATION OF REGISTRATION OF MORTGAGE OF THE VALUE OF LAND USE RIGHTS

1. When foreign-invested enterprises fulfill their debt obligations under the loan agreement or the mortgage agreement on the value of land use rights, they shall submit the mortgage agreement on the value of land use rights to the Land Administration Office for cancellation of the mortgage registration of land use rights.

2. The Land Administration shall proceed to cancel the mortgage registration and stamp the land use right value mortgage contract; cancel the mortgage registration in the Register of Changes and the Mortgage Registration Book in accordance with the provisions of the law.

3. The handling of land use rights and attached assets that have been mortgaged for debt recovery shall be carried out in accordance with Circular Joint Circular No. 03/2001/TTLT/NHNN-BTP-BCA-BTC-TCĐC dated April 23, 2001 of the State Bank of Vietnam, the Ministry of Justice, the Ministry of Public Security, the Ministry of Finance, and the General Department of Land Administration.

IV. IMPLEMENTATION

1. In cases where land use right value has been mortgaged before this Circular takes effect, there is no need to re-perform the procedures stipulated in this Circular.

2. Foreign-invested enterprises that have met the conditions for issuing land use right certificates in accordance with the laws on land but have not yet received them shall not follow the provisions of this Circular for mortgage procedures and documents, but shall follow the provisions at point 1.1 of Joint Circular No. 12/2000/TTLT/NHNN-BTP-BTC-TCĐC dated November 22, 2000 of the State Bank of Vietnam, the Ministry of Justice, the Ministry of Finance, and the General Department of Land Administration.

3. Registration in the Mortgage Registration Book shall only be carried out when guided by relevant ministries and sectors through written instructions.

4. Provincial People's Committees and municipal people's committees under the central government within their respective duties and authorities shall be responsible for organizing the implementation of this Circular.

The Land Administration, the Land and Real Estate Administration, the provincial branch of the State Bank of Vietnam, credit organizations, foreign-invested enterprises, and related units shall be responsible for implementing this Circular.

During the implementation of this Circular, if there are any difficulties, they shall be promptly reported to the General Department of Land Administration and the State Bank of Vietnam for guidance on resolution.

5. This Circular shall take effect 15 days from the date of signature./.