DECREE NO. 11/CP DATED 24 JANUARY, 1995 OF THE GOVERNMENT

Stipulating the detailed implementation of the ordinance on rights and responsibilities of foreign organizations and individuals leasing land in Vietnam
 

THE GOVERNMENT
 

Based on :

- The Law on Government Organization dated 30 September 1992;

- The Land Law dated 14 July 1993;

- The Foreign Investment Law in Vietnam dated 29 December 1987; The law on amendments and addition to some articles of the Foreign Investment Law in Vietnam dated 30 June 1990 and 23 December 1992;

- The Ordinance on rights and responsibilities of foreign organizations and individual in Vietnam dated 14 October 1994;

- The proposal by the Director General of the Land Administration Department.

DECREE

CHAPTER I:  GENERAL PROVISIONS
Article 1. This Decree specifies the implementation of the rights and responsibilities of foreign organizations and individuals leasing land in Vietnam.

Article 2. Foreign organizations and individuals entitled to lease land in Vietnam (hereinafter called lessee (s) include :

1. Diplomatic representative offices, consulates, other representatives with diplomatic functions;

2. U.N representative offices in Vietnam, inter-governmental offices, organizations and representative offices;

3. Foreign organizations and individuals, Vietnamese residents outside Vietnam who invest in Vietnam under the Foreign Investment Law in Vietnam.

In case the Vietnamese Party contributes its capital to a joint venture or to a business cooperation contract by the value of the right to use and, the lessee is the Vietnamese Party.

Article 3. The lessee has to comply with the provisions of the Land Law, the Ordinance on rights and responsibilities of foreign organizations and individuals, this Decree and other applicable Laws of Vietnam on land management and usage.

Article 4. The lessees specified in paragraphs 1 and 2 of Article 2 have to sign leases in conformity with provisions of this Decree on the basis of mutual agreements and the principle of mutual benefits. The lessee is entitled to priorities and exemptions in the agreements signed by the lessees and the Socialist Republic of Vietnam.

In case where no international agreements have been signed, the Vietnamese Government will consider and sign each lease in conformity with the Ordinance.

Article 5. The lessee has to pay the rental to the State of Vietnam ; the land users will pay compensation to the occupants on the land site and the land administration fee when the lease procedures are processed.

The Ministry of Finance shall determine prices for the lease of land designated to foreign organizations and individuals.

Article 6. The Land Administration General Department will cooperate with relevant ministries and branches to appraise the land site and will submit to the State authority mentioned in Government Decree No. 1991/CP dated 28 December 1994 for decision to lease the land site.

CHAPTER II: PROVISIONS ON LEASE

Article 7. A lease is the document signed by the State authority and a lessee in conformity with the provisions in Article 8 of this Decree.

Article 8. Based on the decision for lease by the State authority, the provincial People?s Committee will authorized the local Land Administration Department to sign contract with the lessee within 15 days.

Article 9. The main provisions of the Lease should include the following details:

1. Name, nationality, address, authorized representative of the Lessee and the Lessor.

2. Purpose of the land usage

3. Total area and the existing status of the land site

4. Land rental

5. Lease term

6. Payment method and schedule

7. Responsibilities of the Lessor and the Lessee in the implementation of the lease.

8. Lease Effect

Based on provisions of the above mentioned Lease, the Land Administration General Department will publish a standard lease to use in the whole country and in conformity with the objectives of the lessees : business or non-business.

Article 10. A lessee who wishes to extend a lease has to submit an application to the relevant authorities at least 6 months before the terms expiration. The lessor will notify its decision to the lessee within 3 months after the date of receipt of the application.

Article 11. In cases where the lessee is permitted by the Vietnamese Government to transfer the lease, the succeeding lessee has to re-sign the lease.

Article 12. Upon the expiration of the lease, the lessor and the lessee have to fulfill liquidation procedures.

In cases where transfer of the land site to the lessor is delayed, the lessee has to pay rental for the delayed period and compensate losses caused by the delay.

In such a case the lessor is entitled to request the lessee to pay the land rental for the delayed period and the compensation of all losses caused by the delay.

CHAPTER III: REGULATIONS ON MORTGAGE OVER THE VALUE OF THE RIGHT TO USE LAND
Article 13. The lessor, as specified in Section 3, Article 2 of this Decree, shall be entitled to mortgage its owned asset value attached to its right to use land with a Vietnamese Bank in order to borrow capital for production subject to the following stipulations :

1. The loan capital shall be agreed between the Bank and the Mortgagor.

2. On the due date, if the Mortgagor can not repay the loan, the Bank shall be entitled to, either request the State authority to sell off assets for recovering the capital and interest. The buyers of the assets shall be entitled to lease land and use it for the right purposes subject to the regulations, or the Bank can own the shares equal to the debt and can transfer such shares to recover its capital.

3. In the event that the Mortgagor is liquidated prior the due date, the Bank be entitled to request selling off the assets in order to recover the capital and interest, and the asset buyer can lease the land site and use it for the right purposes.

Article 14. The Mortgagor and the Bank have to sign a mortgage contract on any mortgage.

The State Bank of Vietnam shall coordinate with the Land Administration General Department to prepare a mortgage contract form.

Article 15. The mortgagor will register the mortgage over the right to use land at the Land Administration Department. Upon the termination of the mortgage, the Mortgagor should fulfill mortgage releasing procedures.

CHAPTER IV: REGULATIONS ON LAND LEASING FOR INVESTMENT IN INFRASTRUCTURE CONSTRUCTION AND ON LAND RE-LEASING AT EXPORT PROCESSING ZONES AND INDUSTRIAL ZONES
Article 16. The lease for infrastructure construction investment and sub-lease shall be subject to the following stipulations :

1. The lessee of infrastructure construction investment should be licensed by the State Committee for Cooperation and Investment.

2. The land site for infrastructure construction should be located in export processing zones or industrial zones whose plan has been approved by the relevant State authorities.

3. The Prime Minister shall have decision for the lease of land for the infrastructure construction.

4. Investors shall be responsible for quality of the infrastructure projects during its term of usage.

Article 17. Organizations or individuals who wish to sub-lease the land site for infrastructure construction must submit the following documents :

1. Application for sub-leasing.

2. Feasible studies or investment project

These documents shall be sent to the relevant lessee of the infrastructure construction.

Article 18. The sub-lease in the export processing zones or industrial zones, shall be identified by the sub-lease contract between the sub-lessee and the lessor.

Terms and relevant conditions for the two parties shall be specified in the sub-lease contract and registered at the Land Administration Department.

The General Land Administration Department shall stipulate a standard form of sub-lease contract.

Article 19. The sub-lease has to use the land site with the right purposes, and he shall not be entitled to convert, transfer of sub-lease the right to use the land which has been sub-leased to him.

Article 20. Foreign organizations or individuals who invest in v for infrastructure construction in the export processing zones or industrial zones must pay tax as required by the Laws of v when sub-leasing.

CHAPTER V: IMPLEMENTATION PROVISIONS
Article 21. This Decree shall come into effect from 1 January, 1995.

Article 22. The Minister of 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 v, the General Director of the Land Administration General Department shall be, within their capacity and powers, responsible for the implementation of this Decree.

The Chairmen of the provincial/city People?s Committees shall organize the implementation of this Decree.

Article 23. This Decree shall also be applicable to the Vietnamese residents abroad who invests in Vietnam, to the Joint Venture Enterprise whose legal capital includes the right to use land contributed by the Vietnamese Party, to the joint venture enterprises who lease land in Vietnam.

Article 24. Ministers, heads of ministerial agencies, Heads of offices under the Government, the Chairmen of the provincial/city People?s Committees and the heads of the organizations who lease land as mentioned above, shall be responsible for the implementation of this Decree.

FOR THE GOVERNMENT
PRIME MINISTER

VO VAN KIET

Source:  Department of Ministry of Investment and Planning, HCM city, Vietnam