Capital contribution using land use rights – Conditions and procedures

Capital contribution using land use rights is an effective investment method, helping businesses mobilize financial resources without having to use cash. This capital contribution not only increases asset value but also helps businesses expand business activities. However, to make legal capital contributions, businesses need to clearly understand the relevant conditions and procedures according to the provisions of law.

Does capital contribution using land use rights need to register land changes?

Pursuant to Point a, Clause 1, Article 133 of the Land Law 2024, land users whose capital contribution using land use rights must register land changes.

Conditions for contributing capital with land use rights

Pursuant to Clause 1, Clause 3 and Clause 5, Article 45 of the Land Law 2024, to contribute capital with land use rights, land users need to meet the following conditions:

• Valid legal documents: Land users must have a Certificate of Land Use Rights, Certificate of House Ownership and Residential Land Use Rights, or legal documents related to land use rights and assets attached to land (except in cases of inheritance, conversion of agricultural land, or cases prescribed by the Land Law 2024).
• No disputes: The land must be free of disputes, or if there is a dispute, it must be resolved by a competent state agency, with an effective judgment, decision of the Court or decision of the Arbitrator.
• Not subject to distraint or measures to ensure judgment enforcement: Land use rights must not be distrained, or other measures applied to ensure judgment enforcement according to the provisions of the law on enforcement of civil judgments.
• During the land use term: Land use rights must remain within the legal use period and must not expire.
• Not subject to temporary emergency measures: Land use rights are not subject to temporary emergency measures according to the provisions of law.
• Conditions for ethnic minorities: If the land user is an ethnic minority who is allocated or leased land, he/she must meet the conditions prescribed in Article 48 of the Land Law 2024.
• Financial obligations: If there are financial obligations related to land use rights, the land user must fulfill their financial obligations before contributing capital with land use rights.

Steps to make capital contribution using land use rights

Prepared documents

Pursuant to Clause 1, Article 60 of Decree 102/2024/ND-CP, economic organizations wishing to capital contribution using land use rights will prepare documents including:

• Extract of the location of the land where the investor proposes to implement the project.
• Written request according to Form No. 07 in the Appendix issued with this Decree, sent to the Provincial People’s Committee where the land is located.

Jurisdiction to resolve

Pursuant to Clause 4, Article 60 of Decree 102/2024/ND-CP, the authority to make decisions on approval or disapproval of economic organizations contributing capital with land use rights is the Provincial People’s Committee.

Implementation steps

Pursuant to Article 60 of Decree 102/2024/ND-CP, to make capital contribution using land use rights for investment projects, economic organizations need to follow these steps:

Step 1: Submit documents and hand them over to the appraisal agency

After receiving the written request, the Provincial People’s Committee will assign the agency with provincial land management function to preside and coordinate with relevant agencies to evaluate the dossier.

Processing time: Within no more than 03 working days from the date of receipt of the written request.

Step 2: Document appraisal

The provincial-level land management agency will evaluate the dossier and submit it to the Provincial People’s Committee for consideration. The appraisal document should have the following contents:

• Consistent with land use planning: Ensure the project is consistent with district-level land use planning or other approved and announced plans.
• Satisfaction of legal conditions: Check compliance with the conditions specified in Article 122 and Article 127 of the Land Law.
• Cadastral profile information: Provides information about the land plot or project land area.
• Evaluating approval conditions: The appraisal agency makes a conclusion on the eligibility for economic organizations to transfer, lease land use rights, or receive capital contribution using land use rights.
• Proposed decision: Recommend approval or disapproval for the investor to implement the project.

Processing time: Provincial land management agencies must issue a written appraisal within 15 days of receiving direction from the Provincial People’s Committee.

Step 3: Decision of the Provincial People’s Committee

• The Provincial People’s Committee will review the appraisal document and make a decision on whether or not to approve the economic organization to transfer, lease land use rights, or receive capital contribution using land use rights to implement the project.
• Decision time: Within 05 working days from receipt of appraisal document.
• Content of the approval document: If agreed, the approval document will clearly state the scale, area, land location, time limit for completing the agreement and related contents.

Step 4: Transfer, rent or contribute capital with land use rights

Based on the approval document of the Provincial People’s Committee, economic organizations can carry out procedures for transferring, leasing land use rights, or receiving capital contributions in the form of land use rights to carry out investment projects in accordance with the provisions of law.

Note:

In case of changing the land use purpose to implement an investment project, the organization needs to follow the process and procedures specified in Article 48 of this Decree.

Consulting services and support for implementing capital contribution procedures with land use rights in Long Phan

Capital contribution using land use rights is a way to help businesses mobilize capital, expand production and increase asset value instead of having to buy a piece of land. With Long Phan’s related services, you will receive:

• Consulting on regulations on capital contribution using land use rights;
• Evaluate and appraise land use rights;
• Drafting capital contribution contracts using land use rights;
• Instructions for preparing documents and related procedures;
• Representative submits documents and works with state agencies;
• Consulting on tax issues and related costs;
• Instructions on obligations after capital contribution.

>>> Refer to related articles:

• Can I contribute capital with land use rights to an FDI enterprise?
• Procedures for joint venture enterprises to receive capital contributions using land use rights.
• Consulting on drafting capital contribution documents using land use rights.

Long Phan will accompany you throughout the process of implementing capital contribution procedures with land use rights, helping your transaction go smoothly and effectively. For detailed advice and quick support, please contact Long Phan via the hotline 0906735386. Let Long Phan help you complete capital contribution procedures quickly, accurately and conveniently!