Decree No. 85-CP stipulates the implementation of the Ordinance on the rights and obligations of domestic organizations assigned land or leased land by the State.

DECREE

Regulations on the Implementation of the Ordinance on Rights and Obligations of Domestic Organizations Granted Land and Leased Land by the State

and obligations

_________________

THE GOVERNMENT

Pursuant to the Government Organization Law dated September 30, 1992;

Pursuant to the Land Law dated July 14, 1993;

Pursuant to the Ordinance on Rights and Obligations of Domestic Organizations Granted Land and Leased Land by the State dated October 14, 1994, and the Ordinance Amending and Supplementing Certain Provisions of the Ordinance on Rights and Obligations of Domestic Organizations Granted Land and Leased Land by the State dated August 27, 1996;

At the proposal of the Director General of the Land Administration General Department,

 

DECREE:

PART I

GENERAL PROVISIONS

Article 1. This Decree stipulates the implementation of the Ordinance on Rights and Obligations of Domestic Organizations Granted Land and Leased Land by the State dated October 14, 1994, and the Ordinance Amending and Supplementing Certain Provisions of the Ordinance on Rights and Obligations of Domestic Organizations Granted Land and Leased Land by the State dated August 27, 1996.

As for the land allocation of state-owned enterprises using land for agricultural, forestry, aquaculture purposes as stipulated in Clause 1, Article 5 of the Ordinance on Rights and Obligations of Domestic Organizations Granted Land and Leased Land by the State dated October 14, 1994, it shall be implemented according to Decree No. 01/CP dated January 4, 1995 of the Government on the Allocation of Land for Agricultural, Forestry, Aquaculture Purposes in State-Owned Enterprises.

Article 2. Public-use land includes:

1. Land for constructing public works as specified in Point c, Clause 1 of the Ordinance Amending and Supplementing dated August 27, 1996.

2. Land for building hydroelectric power plants, substations, reservoirs, transmission lines, oil pipelines, gas pipelines, meteorological stations, various observation stations serving research and public services, water conservancy projects, national parks, rest areas, sports training facilities.

3. Other public utility and non-commercial construction projects at the local level as prescribed by the People's Committee of the province or centrally governed city.

4. Special cases as decided by the Prime Minister.

Article 3

1. The limit of land allocated to state-owned enterprises, enterprises of political and social organizations, defense and security enterprises, collective economic organizations, joint stock companies, limited liability companies for use in agricultural, forestry, aquaculture, and salt production purposes according to investment projects (economic and technical justifications) approved by competent state authorities.

2. The term of land allocation for organizations specified in Clause 1 of this Article for annual crop cultivation, aquaculture, and salt production is twenty years; for perennial crop cultivation, fifty years. For land allocated before January 1, 1996, the land use period starts from January 1, 1996; if allocated after January 1, 1996, the period starts from the date of land allocation.

3. The term of land allocation for domestic economic organizations for housing construction to sell to Vietnamese citizens is long-term and stable, and can only be reclaimed under the circumstances stipulated in Articles 26 and 27 of the Land Law. In the case of land allocation for infrastructure construction to lease land rights attached to that infrastructure, the term of land allocation according to the investment project approved by competent state authorities but not exceeding fifty years. If over fifty years, it is decided by the Prime Minister but not exceeding seventy years.

4. The term for domestic economic organizations leasing land does not exceed fifty years. If longer than fifty years is required, it is decided by the Prime Minister but not exceeding seventy years.

Article 4

1. Land use fees must be paid based on land prices set by the provincial or centrally governed city People's Committee based on the land price framework issued by the Government.

2. In cases where land is auctioned by competent state authorities, the land use fee is determined based on the auction results but not lower than the framework price set by the state.

3. Land use fees must be paid into the state budget according to the format prescribed by the Ministry of Finance.

Article 5

1. Rent for land is set by the Ministry of Finance based on the land price framework issued by the state.

2. Rent for land is paid annually; in cases of payment over multiple years or in a lump sum for the entire lease period, reductions are made according to regulations of the Ministry of Finance.

3. Rent for land must be paid into the state budget and included in production and business costs.

Article 6

1. The authority to allocate land as stipulated in Article 23 of the Land Law is the authority to lease land.

2. When being leased land by competent state authorities, the lessee must sign a land lease contract with the Department of Land Administration.

, Clause 1, Clause 2 Article 7a of this Regulation.

1. Domestic organizations granted land and leased land by the state are entitled to receive certificates of land use rights according to the provisions of the law.

2. Domestic organizations granted land and leased land by the state must comply with the provisions of the law regarding the transfer of land use rights, payment of land transfer taxes, land use fees, rent for land, compensation for relocation, environmental protection, proper use of land for its intended purpose, and not causing harm to the legitimate interests of surrounding land users.

Chapter II

RIGHTS AND OBLIGATIONS OF DOMESTIC ORGANIZATIONS GRANTED LAND BY THE STATE WITHOUT PAYING LAND USE FEES

Article 8

1. Domestic organizations granted land by the state without paying land use fees have the right to use the land for the designated purpose.

2. Economic organizations granted land by the state for use in agricultural, forestry, aquaculture, and salt production purposes, in addition to the rights stipulated in Clause 1 of this Article, also have the right:

a) To contribute capital equivalent to the value of land use rights within the allocated period to jointly operate with domestic organizations and individuals, foreign organizations and individuals, to continue developing production according to the law.

b) To mortgage assets owned by them attached to that land at a Vietnamese bank to borrow funds for production and business development according to the law.

Article 9. Domestic organizations granted land by the State without payment have the obligations:

1. Not to use the land for purposes other than those intended.

2. Not to convert, transfer, or lease the right to use the land.

3. For organizations using the land for agricultural, forestry, aquaculture, or salt production purposes, they must not leave the land idle; when permitted by competent state authorities to use the land for other purposes, they must switch to leasing the land or receiving land with payment for use.

4. For organizations using land as specified in point a, b, c of Clause 1, Article 1 of the Ordinance amended and supplemented on August 27, 1996, they may not contribute capital through joint ventures or mortgage the value of the land use rights.

5. To fulfill financial obligations related to land use as prescribed by law.

6. To comply with decisions on land recovery made by competent state authorities.

7. To return to the State the portion of land that is unused or used for purposes other than those intended.

Chapter III

RIGHTS AND OBLIGATIONS OF DOMESTIC ECONOMIC ORGANIZATIONS GRANTED LAND WITH PAYMENT FOR USE

Article 10. Domestic economic organizations granted land with payment for use include state-owned enterprises, enterprises of political and social organizations, defense and security enterprises, collective economic organizations, joint-stock companies, limited liability companies permitted to construct and operate housing, and invest in building infrastructure according to business licenses issued by competent state authorities.

Article 11. Domestic economic organizations granted land with payment for use have the following rights:

1. To transfer the right to use the land when selling houses attached to that land to Vietnamese citizens.

2. To transfer the right to use the land attached to completed infrastructure on that land to Vietnamese citizens for residential purposes.

3. To lease the right to use the land attached to completed infrastructure on that land.

4. To mortgage the value of the land use rights at a Vietnamese bank to borrow funds for production and business development.

5. To contribute capital by the value of the land use rights to form joint ventures with domestic organizations and individuals.

6. State-owned enterprises, enterprises of political and social organizations, defense and security enterprises also have the right to contribute capital by the value of the land use rights to form joint ventures with foreign organizations and individuals in accordance with the provisions of the law.

7. To enjoy the results of investment on the granted land when transferring, leasing, mortgaging, or contributing capital through joint ventures with the value of the land use rights.

Article 12. Domestic economic organizations granted land with payment for use have the following obligations:

1. To pay the full amount of land use fees within the prescribed deadlines.

2. To comply strictly with construction regulations approved by competent authorities.

3. To return the land to the State upon expiration of the grant period, including public land accompanying technical infrastructure built on that land, without compensation.

4. To comply with state regulation regarding price differences caused by state infrastructure investment in the area when transferring or leasing the right to use the land in accordance with the law.

5. To comply with decisions on land recovery made by competent state authorities in accordance with the law.

Chapter IV

RIGHTS AND OBLIGATIONS OF DOMESTIC ORGANIZATIONS LEASED LAND BY THE STATE

Article 13. Domestic economic organizations leased land by the State have the following rights:

1. To mortgage the value of the land use rights during the lease period attached to assets owned by them on that land at a Vietnamese bank to borrow funds for production and business development in accordance with the law. The value of the land use rights referred to in this clause is the land rent paid by the organization to the State.

2. State-owned enterprises, enterprises of political and social organizations, defense and security enterprises, during the lease period, can contribute capital by the value of the land use rights to form joint ventures with domestic organizations and individuals with foreign organizations and individuals under approved investment projects. The value of the land use rights for joint ventures is agreed upon with partners throughout the joint venture period.

3. In cases where competent state authorities permit the transfer of assets attached to leased land, the recipient of the assets may continue to lease the land in accordance with the law.

4. To sublease the right to use land attached to infrastructure in export processing zones and industrial parks as stipulated in Chapter VI of this Decree.

5. To be prioritized for re-leasing the land when the lease term expires if there is a need to continue using the land.

Article 14. Domestic economic organizations leased land by the State have the following obligations:

1. To use the land for the intended purpose.

2. To pay the full amount of land rent within the prescribed deadlines.

3. Not to convert or transfer the right to use the leased land.

4. Not to sublease the land, except as provided for in Clause 3, Article 11 and Clause 4, Article 13 of this Decree.

5. Not to destroy the land; to comply with laws on planning, architecture, and environmental landscape of the area. If leasing land for constructing infrastructure, it must maintain the infrastructure throughout the lease period.

6. To comply with decisions on land recovery made by competent state authorities.

7. To return the land to the State upon expiration of the lease term. When leasing land for investment in constructing infrastructure, upon completion of the investment project, the leased land and infrastructure must be returned to the State without compensation.

Chapter V

PROVISIONS ON CONTRIBUTING CAPITAL THROUGH JOINT VENTURES AND MORTGAGING BY THE VALUE OF LAND USE RIGHTS

Article 15. Domestic economic organizations granted land by the State for agricultural, forestry, aquaculture, or salt production purposes, during the grant period, may contribute capital through joint ventures by the value of the land use rights as follows:

1. Joint ventures with domestic organizations and individuals:

a) In cases where the original purpose of land use is maintained, the joint venture may continue to use the land. The value of the land use rights contributed by the joint venture partner shall be agreed upon by both parties but shall not be lower than the framework price of land set by the State. The joint venture must fulfill financial obligations as prescribed by the Ministry of Finance.

b) In case of changing the purpose of land use, the Party contributing land for joint venture must convert to the form of state land lease. The value of the land use right contributed for joint venture shall be determined by the corresponding state land lease payment for the joint venture period.

2. Contributing land use value to joint venture with foreign organizations or individuals must be permitted by the competent state agency as prescribed in Decree No. 191/CP dated December 28, 1994 of the Government. The Party contributing land for joint venture must convert to the form of state land lease, record debt, and repay the state land lease payment according to the regulations of the Ministry of Finance.

Article 16. Domestic economic organizations using land for agricultural, forestry, aquaculture, salt production purposes may mortgage the value of their land use rights attached to their own property at the Vietnam Bank to borrow funds for production and business activities.

The conditions for mortgage shall be agreed upon by the Bank and the mortgagor but must ensure the following principles:

1. When the due date arrives and the borrowing organization fails to repay the debt or is dissolved prematurely, the Bank has the right to request the competent state agency to auction the property on the land that the organization has mortgaged to repay the Bank's debt and decide to transfer the land to the buyer who continues to use it.

2. The mortgaging organization and the Bank accepting the mortgage may not change, transfer, or lease the land use rights as stipulated in Clause 2, Article 4 of the Law on Rights and Obligations of Domestic Organizations Granted Land by the State and Leased by the State dated October 14, 1994.

3. The mortgage and release of mortgage must be registered with the Land Administration Office.

Article 17. Domestic economic organizations granted land by the state must pay for land use rights. When permitted by the competent state agency to jointly venture with domestic organizations or individuals, or with foreign organizations or individuals, the joint venture capital contribution value shall be agreed upon by the Parties and implemented in accordance with the law.

Article 18. Domestic economic organizations granted land by the state which must pay for land use rights can mortgage the value of their land use rights or the value of their land use rights attached to their own property at the Vietnam Bank to borrow funds for production development according to the following provisions:

1. The value of land use rights for mortgage is the land use fee already paid based on the land price set by the People's Committee of the province or centrally administered city on the basis of the land price framework issued by the Government.

2. The value of the mortgaged assets invested on the mortgaged land area shall be agreed upon by the mortgagor and the Bank.

3. When the due date for repayment arrives or the organization is dissolved prematurely and the borrower cannot repay the debt, the Bank has the right to request the competent state agency to organize the auction of the land use rights and sell the assets (if any) that the organization has mortgaged to repay the Bank's debt. The successful bidder, after paying the full bid amount, shall be granted land by the state without having to pay the land use fee.

4. The mortgage and release of mortgage must be registered with the Land Administration Office.

Article 19. The value of leased land use rights for joint venture contributions with domestic organizations or individuals, or with foreign organizations or individuals by state-owned enterprises, enterprises of political and social organizations, defense and security enterprises shall be implemented in accordance with the provisions of Clause 2, Article 13 of this Decree.

Article 20. Economic organizations granted land leases by the state may mortgage the value of their land use rights attached to their own property at the Vietnam Bank to borrow funds for production during the lease term according to the following provisions:

1. The value of the mortgage shall be decided by the Bank and shall not exceed the value of the assets already invested on the mortgaged land area plus the land lease fees already paid.

2. When the due date arrives or the organization is dissolved prematurely and cannot repay the debt, the Bank has the right to request the competent state agency to sell the assets on the land that the organization has mortgaged to repay the Bank's debt and decide to allow the buyer of the asset to continue leasing the land.

Chapter VI

REGULATIONS FOR ORGANIZATIONS GRANTED LAND LEASES BY THE STATE TO DEVELOP INFRASTRUCTURE IN EXPORT PROCESSING ZONES AND INDUSTRIAL PARKS

Article 21. Organizations granted land leases by the state to invest in developing infrastructure and subleasing in export processing zones and industrial parks include: state-owned enterprises, enterprises of political and social organizations, defense and security enterprises, collective economic organizations, joint-stock companies, limited liability companies with functions of investing in developing infrastructure and financial capacity as prescribed by law.

Article 22. The land for leasing to develop infrastructure must be within export processing zones and industrial parks approved by the competent state agency.

Article 23. The People's Committee of the province or centrally administered city shall examine and approve the investment in developing infrastructure in export processing zones and industrial parks for the organizations specified in Article 21 of this Decree to prepare investment projects for approval by the competent state agency.

Article 24. Domestic and foreign organizations or individuals wishing to lease land again in export processing zones and industrial parks, which have been developed with infrastructure, must submit a land lease application and have their investment project approved by the competent authority.

Article 25. Organizations leasing land to develop infrastructure must sign a lease contract with the sublessee and register with the Land Administration Office according to the guidelines of the Land Administration General Department.

Article 26. Organizations granted land leases by the state to invest in developing infrastructure and subleasing in export processing zones and industrial parks have the right:

1. To enjoy the rights prescribed in Clause 3, 4 of Article 13 of this Decree.

2. To benefit from the results of investment on the leased land when subleasing land use rights.

3. To mortgage the value of undeveloped plots within the lease term at the Vietnam Bank to borrow funds for developing infrastructure.

Article 27. Organizations granted land leases by the state to invest in developing infrastructure and subleasing in export processing zones and industrial parks have the obligation:

1. To fulfill the obligations prescribed in Clause 4 of Article 12 and Clauses 1, 2, 3, 5, 6, 7 of Article 14 of this Decree.

2. To maintain infrastructure throughout the lease period.

Article 28. The lessee must use the land for the intended purpose and shall not transfer, assign, or sublet the right to use the land. In cases where the transfer of assets owned by the lessee that are attached to the leased land is permitted, the party receiving the assets must enter into a land lease agreement with the lessor.

Chapter VII

PROVISIONS FOR ECONOMIC ORGANIZATIONS THAT WERE ALLOCATED OR LEASED LAND BY THE STATE BEFORE SEPTEMBER 9, 1996

(the date the amended and supplemented ordinance came into effect)

Article 29. Domestic economic organizations that were allocated land by the State before September 9, 1996 and continue to use such land, which fall under the category of land allocation requiring payment for land use as stipulated in points a and b, Clause 2, Article 1 of the amended and supplemented ordinance dated August 27, 1996, if they have not yet paid for the land use, or if they have already paid for the land use but the funds originated from the State budget, must now pay for the land use to the State according to the regulations of the Ministry of Finance.

Article 30. Domestic economic organizations that were leased land by the State and now fall under the category of land allocation requiring payment for land use as stipulated in points a and b, Clause 2, Article 1 of the amended and supplemented ordinance dated August 27, 1996, if they have already paid for the land lease to the State and the funds did not originate from the State budget, may be counted towards the payment for land use according to the regulations of the Ministry of Finance.

Article 31. Domestic economic organizations that were allocated land by the State and now fall under the category of land leasing as stipulated in Clause 3, Article 1 of the amended and supplemented ordinance dated August 27, 1996, shall implement the following provisions:

1. If they have not yet paid for land use, or if they have already paid for land use but the funds originated from the State budget, they must pay for land lease to the State starting from January 1, 1996.

2. If they have already paid for land use and the funds did not originate from the State budget, they may be counted towards the payment for land lease according to the regulations of the Ministry of Finance.

The People's Committee of the province or centrally governed city shall decide on the leasing of land and the lease term for the organization referred to in Article 31 of this Decree in accordance with the law.

Article 32. Organizations currently using land with origins from residential land legally used by households or individuals, after being permitted by competent State authorities to use such land areas for offices or factories for production and business purposes, are not required to convert to a land lease form; these organizations will continue to pay property tax according to the law.

Chapter VIII

IMPLEMENTING PROVISIONS

Article 33. The provisions of this Decree concerning limited liability companies and joint-stock companies also apply to private enterprises when allocated or leased land by the State.

Article 34. The Minister of Finance, Governor of the State Bank of Vietnam, and Director of the General Department of Land Administration within their respective functions and powers are responsible for guiding the implementation of this Decree.

Article 35. The Minister, head of a ministry-level agency, head of an agency under the Government, Chairman of the People's Committee of the province or centrally governed city, and the heads of organizations using land are responsible for implementing this Decree.

Article 36. This Decree replaces Decree No. 18/CP dated February 13, 1995, and comes into effect from the date of signature.