Laws of Vietnam

THE GOVERNMENT

Pursuant to the Law on Organization of the Government on the 30th of September, 1992;

Pursuant to the Land Law on the 14th of July, 1993;

Pursuant to the Law on Foreign Investment in Vietnam on the 29th of December, 1987, and the Laws on Amendment and Supplement to a Number of Articles of the Law on Foreign Investment in Vietnam on the 30th of June, 1990 and 23rd of December, 1992;

Proceeding from the Ordinance on the Rights and Obligations of Foreign Organizations and Individuals Renting Land in Vietnam on the 14th of October, 1994;

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

DECREES:

Chapter I

GENERAL PROVISIONS

Article 1.- This Decree stipulates the detailed provisions for the implementation of the Ordinance on the Rights and Obligations of Foreign Organizations and Individuals Renting Land in Vietnam.

Article 2.- Foreign organizations and individuals renting land in Vietnam (hereafter referred to as the Land Renter) are composed of:

1. The diplomatic representations, the consular offices and the other foreign representations with diplomatic functions;

2. The representations of the United National organizations in Vietnam, the inter-governmental offices and organizations, and the representations of inter-governmental organizations;

3. The foreign organizations and individuals and the overseas Vietnamese who invest in Vietnam in accordance with the Law on Foreign Investment in Vietnam.

In the event that the Vietnamese party contributes capital in the form of the value of the land rent to the foreign-invested joint venture or to the business contract with a foreign country, the Vietnamese Party will be the Land Renter.

In the event that a Joint Venture rents the land, the competent representative of the Joint Venture is the Land Renter.

In the event that a Joint Venture rents the land, the competent representative of the Joint Venture is the Land Renter.

Article 3.- The Land Renter shall comply with the provisions of the Land Law, the Ordinance on the Rights and Obligations of Foreign Organizations and Individuals Renting Land in Vietnam, this Decree and the other existing provisions of the Vietnamese law on management and use of land.

Article 4.- The Land Renters stipulated in Items 1 and 2 of Article 2 shall proceed from the bilateral agreements and the principle of reciprocity to sign land rent contracts in accordance with the provisions of this Decree. The Land Renter is entitled to the privileges and immunities in accordance with the bilateral or multilateral agreements that the Socialist Republic of Vietnam and the Land Renter have both acceded to.

In the absence of such an international convention, the Vietnamese Government shall decide on each of the rentals in accordance with the Ordinance.

Article 5.- The Land Renter shall pay the land rent to the Vietnamese State; the land-using party shall pay compensations to those whose land is retrieved and rented to it, and pay the land administration fee as it fills the renting procedure. The Ministry of Finance shall set the rental rates for foreign organizations and individuals.

Article 6.- The General Administration of Land shall, in coordination with the concerned ministries and branches, examine and submit its proposal to the competent State agency stipulated in Decree No. 191-CP on the 28th of December, 1994 of the Government, for decision on the land rent,

Chapter II

PROVISIONS ON LAND-RENT CONTRACT

Article 7.- The land-rent contract is a document signed between the competent Vietnamese State agency and the Land Renter in accordance with the provisions of Article 8 of this Decree.

Article 8.- Pursuant to the Decision of the competent State agency, the People's Committees at the provinces and cities directly under the Central Government shall within 15 days assign the Provincial Department of Land to sign the contract with the Land Renter.

Article 9.- The main contents of the Land-Rent Contract include:

1. Full names, nationalities and addresses of the competent representatives of the Land Renter and the Land-Renting Party.

2. The purpose of the land use.

3. The area and current state of the land for rent.

4. The rental rate.

5. The length of the rent.

6. The mode and time of rent payment.

7. The responsibility of the parties in the implementation of the contract.

8. The effective date of contract.

Proceeding from the contract contents, the General Administration of Land shall issue contract forms to be used uniformly throughout the country for each category of organizations: those renting land for production and business purposes, and those for non-production and non-business purposes.

Article 10.- In the event the Land Renter wishes to renew the land-rent contract, it must apply in writing to the authority competent in land renting at least six months before the expiry of the contract. Within three months from the receipt of the application, the Land-Renting Party shall notify the Land Renter of its decision.

Article 11.- In the event that the Land Renter is permitted by the Vietnamese Government to change the contracted Land Renter, the next Land Renter shall have to sign a new land-renting contract.

Article 12.- On expiry of the contract, the parties to the contract shall conduct contract liquidation procedures.

In the event of a delay in the return of the rented land area, the Land Renter must pay the rent for the delayed period and compensate for any losses incurred by this delay.

In the event of a delay in the return of the rented land area, the Land-Renting Party has the right to request the Land Renter to pay the rent for the delayed period and compensate for any losses incurred by this delay.

Chapter III

PROVISIONS ON COLLATERAL IN VALUE OF LAND-USE RIGHT

Article 13.- The Land Renter stipulated in Item 3 of Article 2 of this Decree may mortgage the value of property owned by him/her in association with his/her land-use right as collateral at the Vietnamese Bank to acquire loans for production, in accordance with the following provisions:

1. The amount of the loan shall be agreed upon between the Bank and the Mortgaging Party.

2. At the expiry of the loan, if the Mortgaging Party fails to pay back the loan, the Bank has the right to request the competent State agency to put on sale the loan-taker's property to recover the loan principal and interest. The property buyer has the right to rent the land and is required to use it in accordance with the prescribed purpose. Or the Bank may take into its possession a volume of shares equivalent to the loan, and has the right to sell these shares to recover its capital.

3. In the event the Mortgaging Party is dissolved before the date for the loan payment, the Bank has the right to request a sale of its property to recover the loan principal and interest, and the buyer of the property has the right to rent the land and use it in accordance with the prescribed purpose.

Article 14.- In mortgaging, the Mortgaging Party and the Vietnamese Bank must sign mortgage contract.

The Vietnamese Bank shall, in coordination with the General Administration of Land, prepare the form for mortgage contract.

Article 15.- The Mortgaging Party must register the mortgage of its land-use right with the Provincial Department of Land Management. When the mortgage expires, the Mortgaging Party must fill the procedures to terminate the mortgage.

Chapter IV

PROVISIONS FOR RENTING LAND FOR INVESTMENT IN INFRASTRUCTURE CONSTRUCTION AND FOR RE-RENTING LAND AT EXPORT-PROCESSING AND INDUSTRIAL ZONES

Article 16.- The renting of land for investment in infrastructure construction and for re-renting land shall be conducted according the following provisions:

1. The Land Renter which rents land for infrastructure construction must obtain a license for investment in infrastructural construction from the State Committee for Cooperation and Investment.

2. The land to be rented for infrastructure construction must be located within the export-processing or industrial zone which has been marked off by the competent State agency.

3. The Prime Minister shall decide on the renting of land for infrastructure construction.

4. The investor is held responsible for the quality of the infrastructure projects during their use period.

Article 17.- The organizations and individuals that have the need to re-rent land with built-in infrastructure, must had in the following documents:

1. An application for land re-renting.

2. A feasibility plan or investment project.

These documents shall be sent to the organization which has rented the land for infrastructure construction.

Article 18.- The re-renting of land within the export-processing or industrial zone shall be effected through a contract for land re-renting signed between the Land Re-Renter and the Re-Renting Party.

The Re-Renting Contract shall clearly provide for the renting period and the provisions related to both parties and shall be registered with the Provincial Department of Land Administration.

The General Administration of Land shall provide the form of the contract for land re-renting.

Article 19.- The Land Re-Renter must use the re-rented land according to the prescribed purpose and must not transfer, assign or re-rent it.

Article 20.- Foreign organizations and individuals that invest in Vietnam to build infrastructure at export-processing and industrial zones shall, in re-renting their rented land, pay taxes in accordance with the provisions of Vietnamese law.

Chapter V

IMPLEMENTATION PROVISIONS

Article 21.- This Decree takes effect from the 1st of January, 1995.

Article 22.- The Minister for Foreign Affairs, the Minister-Chairman of the State Committee for Cooperation and Investment, the Minister of Finance, the Minister of Construction, the Governor of the State Bank of Vietnam and the General Director of the General Administration of Land shall, within their vested functions and powers, have the responsibility to provide guidance for the implementation of this Decree.

The Presidents of the People's Committees in the provinces and cities directly under the Central Government shall organize the implementation of this Decree.

Article 23.- This Decree shall also apply to overseas Vietnamese who invest in Vietnam, the foreign-invested joint-venture enterprises, the Vietnamese parties which contribute capital in the form of the value of their land-use right, and the joint ventures with foreign countries which rent land in Vietnam.

Article 24.- The Ministers, the Heads of the agencies at ministerial level, the Heads of the agencies attached to the Government, the Presidents of the People's Committees in provinces and cities directly under the Central Government, and the Heads of the said land-using organizations are responsible for implementing this Decree.

On behalf of the Government

Prime Minister

VO VAN KIET