Currently, many investors – especially foreign investors – have the need to move production lines to Vietnam. In order for the investment process to go smoothly, foreign investors should pay attention to the following issues.
1. Note on the legal regulations on land lease in industrial zones
According to the 2013 Land Law, infrastructure businesses are leased land by the State for the purpose of building industrial park infrastructure in two forms:
– One-time land rental payment;
– Or pay annual land rent.
For the land leased with one-time payment: Enterprises are allowed to sublease land attached to infrastructure to other enterprises. The form of sublease also includes 2 forms:
– Annual land payment;
– Pay a one-time land rental for the entire rental period.
For the leased land with annual payment: Enterprises can only sublease in the form of annual payment.
2. In case of foreign investors as sub-lessee of industrial land
For foreign investors who are land sub-lessees, it is important to note the difference between the two forms of payment as follows:
2.1. Form 1: The lessee pays one-time land rental payment
In this case, the lessee will enjoy the following benefits:
– Transfer of land use rights;
– Mortgage of land use rights;
– Contribute capital to other companies with land use rights.
2.2. Form 2: The lessee pays annual land rental payment
In this case, the lessee will be limited in some rights such as:
– Land use rights cannot be transferred;
– Only the rights in Section 2.1 can be exercised with respect to properties attached to land.
3. Consider renting state land and sub-leasing corporate land
In fact, there are enterprises that lease land from the State in the form of an annual payment. When leasing land to other businesses with infrastructure… They usually divide the rent into 2 parts:
– Annual land rental;
– The cost of using infrastructure
The cost of using infrastructure often takes up the majority and must be paid once for the entire rental period. Foreign investors should consider this because usually, the price of land rent by the State will be smaller than this cost. And investors can also choose one of the two most convenient forms for them.
In addition, when the investor subleases the land and wishes to sublease it to another party, the investor must be approved by the sublessor. This can lead to troublesome disputes between the parties.
To receive legal advice more clearly about the law when you want to invest in Vietnam. Investors need a legal team with high qualifications to advise on investment procedures and documents in Vietnam. Thanks to their legal team, investors can also avoid unnecessary disputes.
4. About us
HMLF is a Law Firm licensed to provide legal services to Enterprises. With over 70 years of experience in:
– Finance, Accounting, Tax.
– Industry: Manufacturing, Service, Aviation, Transport, Technology, Finance.
– Harley Miller’s mission is to help Customers control transactions from internal legal to international trade. Become the best legal defender for Businesses.
– Besides, the team of experts and staff of Harley Miller strives to provide optimal solutions to bring customers satisfaction when experiencing legal services.
Harley Miller Law Firm “HMLF”
Head office: 14th floor, HM Town building, 412 Nguyen Thi Minh Khai, Ward 05, District 3, Ho Chi Minh City.
Phone number: 0937215585
Website: hmlf.vn Email: miller@hmlf.vn
