On 18 December 2020, the Government issued Decree no. 148/2020/ND-CP (“Decree no. 148”) to amend and supplement (i) Decree no. 43/2014/ND-CP providing the implementation of the Law on Land dated 15 May 2014 (“Decree no. 43”) and (ii) Decree no. 47/2014/ND-CP providing on compensation, support and resettlement when the State revokes land dated 15 May 2014 (“Decree no. 47”). Amongst the other amended and supplemented articles, this update will focus on three notable changes.

1. Allocation and lease of narrow land parcels managed by the State

For years, the presence of narrow land parcels managed by the State in the project land lot has always been an obstacle for investor to be eligible to receive land. It results in the freezing of the project operation. In response, Decree no. 148 supplemented Article 14a providing regulations on allocation and lease of narrow land parcels managed by the State into Decree no. 43, specifically as follows:

(a) To be recognized as narrow land parcel, a parcel must satisfy the following requirements:

(i) belong to the revoked land fund or unallocated/unleased land;

(ii) unqualified shape or area land;

(iii) comply with the land use planning and scheme;

(iv) not used for the project or construction identified in the approved/published plan;

(v) not subject to any dispute, complaint or violation.

(b) The use, allocation and leasing of the narrow land parcel must adhere to the following principles:

(i) The land parcel will be preferably used for public purposes. If not appropriate for the public use, the State shall (1) allocate such parcel with the land use levy or (2) lease the parcel to adjacent land user;

(ii) Allocation and the leasing of the land parcel are conducted (1) through an auction if there are two or more demanding adjacent land users; and (2) not through an auction if there is only a demanding adjacent land user after the parcel is assessed, its information is published and on which the local people’s opinions are collected;

(iii) After the parcel is allocated or leased, the receiving adjacent land user must implement the parcel consolidation procedure.

The provincial-level People’s Committee shall detail relevant provisions for the narrow land parcels to implement Article 14a of Decree no. 43.

2. Land lease support for non-agricultural production establishments in case the State revokes the land

Decree no. 148 supplemented Decree no. 47 by introducing Article 19a which provides regulations on land lease support for continuous production and business in case the State revokes land. Accordingly, if the State revokes the land for non-agricultural production establishments from land user who is leasing the land in the form of annual rental payment, the land user may be entitled to land lease support for the continuous production and business.

(a) The means of support include:

(i) Leasing alternative land in industrial parks, export processing zones, industrial clusters and trade villages; or

(ii) Leasing alternative land, which has been cleared, in the form of annual rental payment not through an auction, subject to the competent People’s Committee’s consideration, on the condition that the provincial land fund allows such support.

(b) To be entitled to the support, the land user must satisfy the following conditions:

(i) having demand for the continuous production and business;

(ii) the former land lease term remains 1/3;

(iii) bearing effect by the land revocation;

(iv) on-going production and business activities at the time of revocation; and

(v) other financial and non-violation requirements.

Annually, the provincial-level People’s Committee is responsible for combining the list of projects, of which the land will be leased in the form of annual rental payment not through an auction as provided herein, in order to seek for the Prime Minister’s approval.

3. New guideline on dossier submission in land-related procedure and issuance of its result

Decree no. 148 significantly amended Article 60 of Decree no. 43, which provides regulations on dossier submission in land administrative procedure and its result issuance, as follows:

(a) Apart from the Land Registration Office (“LRO”), branch of the LRO shall have authority to receive the application dossier and issue the result of the land registration procedures, including newly issuance, replacement and re-issuance of the land use rights certificate (“LURC”);

(b) The provincial-level People’s Committee shall issue regulation on the land registration procedure applicable for the LRO and the branch of the LRO and then publish the same;

(c) Subject to condition on the information technology and technical infrastructure, the LRO and the branches of LRO may handle the land-related administrative procedures on the electronic platform.

For implementation of these new amendments in reality, the provincial-level People’s Committees will issue instruments providing detailed instructions on the following issues:

(a) Procedure for receiving, forwarding dossier, processing documents and issuing results among the competent agencies;

(b) Procedure for newly issuance, replacement and re-issuance of the LURC;

(c) Choice of place for submitting dossier (i.e. at the LRO or one of the branches of the LRO or other place) with respect to the demand of the land user, owner of land-attached asset;

(d) Other land-related administrative procedures.

4. Preliminary assessment

These notable changes will obviously bring about momentous changes in dealing with land-related issues in reality, in particular:  

(a) The new provision on the narrow land parcel as mentioned in Item (1) helps the investor in real estate business to mitigate difficulties in obtaining approval of land allocation and land lease.

(b) These changes and land lease support as mentioned in Item (2) will thoroughly facilitates the investor and the land user to continuously carry on their business.

(c) Moreover, adding an additional agency and encouraging the application on the electronic means as mentioned in Item (3) will accelerate the process of handling land-related administrative procedures. However, this amendment might firstly create complexity since the land user may face challenge of selecting the competent agency or using the electronic system to submit dossier. Moreover, it requires an advanced level of management mechanism among the authorities in handling the dossier of the land user and the owner of the land-attached asset.

In all of the above provisions, the provincial-level People’s Committees play a significant role in implementing them. As Decree no. 148 will soon come into force, the instructions of the provincial-level People’s Committees on the relevant required procedures are of urgent necessity. Decree no. 148 will take effect on 8 February 2021.

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This briefing is for information purposes only. Its contents do not constitute legal advice and should not be regarded as detailed advice in individual cases. For legal advice, please contact our Partners.