How is compensation when the State recovers land from businesses?

Compensation when the State recovers land from enterprises is a legal mechanism to protect the legitimate rights and interests of businesses when affected by socio-economic development projects. Understanding compensation regulations helps businesses proactively develop financial plans, negotiate effectively and ensure they receive the appropriate level of support, contributing to stabilizing production and business activities during the affected period.

Conditions for land compensation when the State recovers land from enterprises

Enterprises are only compensated for land when the state recovers land for defense and security purposes; socio-economic development for national and public benefits. Pursuant to the provisions of Article 95 of the Land Law 2024, conditions for businesses to receive compensation for land include:

• Compensated enterprises are organizations that are allocated land by the State with collection of land use fees, or lease land with a one-time rental payment for the entire lease period; receive inheritance of land use rights, receive transfer of land use rights, receive capital contribution using land use rights;
• Compensated enterprises are economic organizations that are allocated land by the State with land use fees collected to carry out investment projects to build housing for sale or for combined sale and lease; land lease with one-time land rental payment for the entire lease period;
• Have a Certificate of land use rights or Certificate of house ownership and residential land use rights or Certificate of land use rights, ownership of houses and other assets attached to land or Certificate of land use rights and ownership of assets attached to land;
• There is a decision to allocate land or a decision to lease land or a decision allowing change of land use purpose from a competent state agency;
• Have one of the documents on land use rights as a basis for granting a Certificate of land use rights and ownership of assets attached to land according to the provisions of Article 137 of the Land Law 2024;
• Receive transfer of land use rights according to the provisions of law from people who have legal land use rights but have not completed land registration procedures;
• To use land as agreed in the mortgage contract to settle debt; Document recognizing the results of the auction of land use rights in which the auction winner has fulfilled their financial obligations according to the provisions of law.

Fully meeting the above conditions is an important legal basis for businesses to be considered for compensation for land when the State recovers, ensuring legal rights and interests during the implementation of projects for national and public purposes.

Cases of land compensation when the State recovers land from enterprises

According to the Land Law 2024, in specific cases, businesses are compensated for land as follows:

Case 1: Land compensation when the State recovers agricultural land from the enterprise

Enterprises that are using agricultural land that is allocated land by the State with land use fees, leased land with a one-time land rental fee for the entire lease period, receive land use rights transfer when the State recovers land, and if eligible for compensation according to Article 95 of the Land Law 2024, will be compensated for the land.

CSPL: Clause 1, Article 97 of the Land Law 2024.

Case 2: Compensation for land when the State recovers residential land from the enterprise

Enterprises that are using residential land or owning houses attached to land use rights in Vietnam when the State recovers land, if eligible for compensation according to Article 95 of the Land Law 2024, will be compensated in the form of residential land or houses or in money or in land with a use purpose different from the type of land recovered.

CSPL: Article 98 Land Law 2024.

Case 3: Land compensation when the State recovers non-agricultural land that is not residential land of the enterprise

• Enterprises that are using non-agricultural land other than residential land or cemetery land when the State recovers the land, if they meet the compensation conditions prescribed in Article 95 of the Land Law 2024, will be compensated with land with the same use purpose; In case there is no land to compensate, monetary compensation will be given.
• Enterprises that are using land allocated by the State to implement cemetery infrastructure investment projects, building ashes storage facilities, foreign-invested enterprises that are using land by receiving capital contributions by land use rights and using non-agricultural land that is not residential land by receiving capital contributions by land use rights, when the State recovers land, if they meet the compensation conditions prescribed in Article 95 of the Land Law 2024, they will be compensated for the land.
• Domestic enterprises and FDI enterprises that are using non-agricultural land leased by the State pay a one-time land rent for the entire lease period. When the State recovers the land, if they meet the compensation conditions prescribed in Article 95 of the Land Law 2024, they will be compensated for the land.

CSPL: Article 100 of the Land Law 2024.

Thus, depending on the type of land and form of land use, businesses will be considered for land compensation if they fully meet the conditions prescribed by the Land Law 2024, contributing to ensuring legal rights and supporting stable business operations when land is recovered.

Cases of not being compensated for land when the State recovers land

Pursuant to the provisions of Article 101 of the Land Law 2024, in some cases, businesses will not be compensated for land when the State recovers land as follows:

• Land is allocated by the State without collection of land use fees, except in cases where agricultural land of households and individuals is compensated for land as prescribed in Article 96 of the Land Law 2024;
• Land allocated by the State to organizations is subject to land use fees but is exempt from land use fees;
• Land is leased by the State with annual land rental payment; Leased land has a one-time rental payment for the entire rental period but is exempt from land rental, except for the case specified in Clause 2, Article 99 of the Land Law 2024;
• Land belonging to the agricultural land fund used for public purposes is leased by the Commune People’s Committee;
• Contracted land for agricultural production, forestry, aquaculture, and salt production;
• The allocated agricultural land area exceeds the limit prescribed in Article 176 of the Land Law 2024.
• Land managed by state agencies and organizations;
• Land recovered in cases of land law violations;
• Land recovered due to termination of land use according to law;
• The enterprise no longer needs to use the land and has a voluntary application to return the land.
• In case of not meeting the conditions for granting a Certificate of land use rights and ownership of assets attached to land according to the provisions of the Land Law 2024, except for the cases specified in Clause 3, Article 96 of this Law.

Therefore, businesses need to clearly determine the origin and form of land use to avoid falling into cases of not being compensated when the State recovers land, thereby being proactive in protecting legal rights and effective land use strategies.

Consulting services on compensation when the State recovers land from businesses at Long Phan Consulting Company

Long Phan Consulting Company provides comprehensive consulting services related to compensation when the State recovers land from businesses. Long Phan Consulting Company’s services include:

• Consulting on land recovery policy;
• Consulting on the rights and obligations of businesses when land is recovered;
• Consulting on solutions when the State compensates inadequately;
• Support businesses in implementing related administrative procedures;
• Consulting on restructuring and reinvestment after land recovery.

We are committed to always putting our customers’ interests at the center, based on your needs and each specific case to come up with the most optimal and effective solution.

Some frequently asked questions about compensation when the State recovers land from businesses

To give you a clearer perspective on this issue, we provide some common questions about compensation when the State recovers land from businesses:

How is land compensation value determined?

The land compensation value is valued at the market price at the time the land recovery decision is issued, determined by the competent state agency.

Are businesses compensated for production relocation costs?

Yes, businesses are compensated for the cost of relocating machinery, equipment and other reasonable costs to stabilize production at the new location.

How long does it take to pay compensation?

The time for compensation payment is specified in the land recovery decision, usually no more than 30 days from the effective date of the decision.

Does an enterprise have the right to appeal an unsatisfactory compensation decision?

Yes, businesses have the right to appeal the compensation decision to a competent state agency or sue in court if they do not agree with the compensation level.

Is annual land rental compensation compensated?

No, leased land with annual rental payments is not subject to compensation when the State recovers the land.

Does the business receive support in finding new production locations?

Depending on each locality’s policies, businesses can receive support in finding and renting suitable new production locations.

Will businesses receive vocational training support for affected workers?

Enterprises can receive support for vocational training costs for workers affected by land acquisition according to the provisions of labor law.

In what cases can businesses receive resettlement land?

Enterprises do not receive resettlement land, however, depending on the case, they may receive compensation in the form of land with other uses.

Conclude

In all situations related to compensation when the State recovers land from businesses, understanding the law and correctly applying the principles is a key factor. If you need in-depth support or resolve complex legal documents, please contact Long Phan Consulting Company immediately via the hotline 0906735386 to receive direct support from a lawyer.