Conditions for enterprises to sublease land leased from the state

Conditions for enterprises to sublease land leased from the state is an important content that helps businesses use land effectively and in accordance with the law. Understanding these conditions helps businesses optimally exploit land use value, increase legal revenue from subleasing activities, limit legal risks and ensure compliance with financial obligations to the State during the land use process.

Can businesses sublease state-leased land?

Pursuant to Point c, Clause 1, Article 33 of the Land Law 2024, economic organizations that are leased land by the State and collect a one-time land rent for the entire lease period have the right to sublease their land use rights and assets attached to the land. However, land sublease only applies to businesses that have paid land rent once for the entire lease period.

Enterprises that lease land from the State and pay annual land rent are not allowed to sublease land use rights. This is to ensure that businesses have fulfilled their financial obligations to the State before carrying out transactions related to land use rights.

In addition, businesses need to clearly distinguish between subleasing land and transferring land lease rights. In case an enterprise pays annual land rent, the enterprise is not allowed to sublease the land but can transfer the lease right in the land lease contract according to the provisions of Clause 37, Article 3 and Point c, Clause 1, Article 34 of the Land Law 2024.

Specifically, Clause 37, Article 3 of the Land Law 2024 clearly defines the right to rent in a land lease contract as the right of the land user formed when the State leases land with annual land rent. Therefore, the land user is transferred the lease right in the land lease contract and the transferee will inherit the rights and obligations according to regulations.

Thus, businesses have the right to sublease land rented from the State but must meet specific conditions that we analyze below.

Conditions for enterprises to sublease land leased from the state

Pursuant to Clause 1, Article 45 of the Land Law 2024, businesses that want to sublease land rented from the State must meet the following conditions:

• First, businesses must have a Certificate of Land Use Rights or Certificate of ownership of housing and land use rights or Certificate of land use rights, ownership of housing and other assets attached to land. This certificate is the legal basis confirming the legal land use rights of the enterprise and is a mandatory condition to carry out sublease transactions;
• Second, the land is not in dispute or if there has been a dispute, it must be resolved by a competent state agency, the judgment or decision of the Court, or the decision or award of the Arbitration has legal effect. This condition ensures the legality of the transaction and avoids disputes after subleasing;
• Third, land use rights are not distrained, other measures must be applied to ensure judgment enforcement according to the provisions of the law on enforcement of civil judgments. When land use rights are being distrained or enforcement measures are applied, businesses are not allowed to conduct sublease transactions to ensure the rights of related parties;
• Fourth, the sublease must be carried out within the remaining land use term. Enterprises are only allowed to sublease land within the remaining land lease period, not exceeding the land use term leased by the State;
• Fifth, land use rights are not subject to temporary emergency measures according to the provisions of law. This condition is to ensure that land use rights are not restricted by administrative or judicial measures.

In addition, based on Point c, Clause 1, Article 33 of the Land Law 2024, the prerequisite is that the enterprise must have paid the land rent once for the entire lease period. If an enterprise pays annual land rent, it cannot sublease the land, but can only transfer the lease right in the land lease contract.

Thus, businesses must fully meet the above conditions to be able to sublease land rented from the State.

Procedures for subleasing land use rights

In order for the sublease of land use rights to go smoothly, you need to pay attention to the following issues:

Enter into a contract to sublease land use rights

When all conditions for subleasing land use rights are met, the parties will negotiate, negotiate and sign a contract to sublease land use rights.

This contract must contain some basic information as follows:

1. Information of parties: Name, address, tax/business code, legal representative (if legal entity).

2. Legal status of subleased land:

• Land plot number, map sheet;
• Area;
• Purpose of use;
• Term of use;
• Documents proving use rights (land lease decision, land lease contract with the State, rent payment receipt…).

3. Purpose of use of the lessee: Must be consistent with land use planning and plans.

4. Sublease term: Does not exceed the remaining term in the land lease contract with the State.

5. Rental price and payment method: Clearly state the amount, payment method, and payment term.

6. Rights and obligations of the parties.

7. Responsibility for breach of contract, handling of violations, unilateral termination of contract.

8. Dispute resolution: Arbitration or economic arbitration.

9. Commitment of the parties: Regarding the land being dispute-free, in accordance with planning…

After agreeing on the contract content, the two parties sign a written contract. This contract can be notarized/authenticated if either party requests (notarization is recommended to increase legal effect).

Procedures for registering land changes

After concluding the lease contract, registering changes is extremely important. This is to help make the above agreement legal. Change registration procedures are carried out as follows:

Step 1: Prepare documents

Pursuant to Article 29 and Article 37 of Decree 101/2024/ND-CP, change registration documents in case of subleasing land use rights include:

• Application for registration of changes in land and assets attached to land according to form No. 11/DK of Decree 101/2024/ND-CP: This is an official document expressing the enterprise’s will to sublease land use rights, clearly stating information about the sublessor, sublessee, sublease land plot and other related information;
• Original issued Certificate (Red Book, Pink Book): This is a document proving the legal land use rights of the enterprise, serving as a basis for the competent state agency to confirm the sublease;
• Document on lease or sublease of land use rights: This is a sublease contract of land use rights made between the enterprise and the sublessee, which clearly stipulates the rights and obligations of the parties.
• Document on representation according to the provisions of civil law in case of carrying out procedures for registering land and assets attached to land through a representative.

Fully preparing the above documents will help save costs and time for you when carrying out procedures for subleasing land use rights.

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Step 2: Submit application

• Enterprises submit applications directly at the One-Stop Department according to regulations of the Provincial People’s Committee on receiving applications and returning results of administrative procedures at provincial, district and commune levels;
• The officer receiving the dossier checks the completeness and validity of the dossier and issues a dossier receipt slip to the submitter.

The receiving department will then transfer the documents to the competent authority for settlement, including the Land Registration Office and the Land Registration Office Branch, depending on the specific case.

Step 3: Receive and process sublease documents:

The land registration office checks documents and performs the following tasks:

• Check the conditions for exercising the right to sublease land use rights. In case the conditions for exercising the right according to regulations are not met, the Land Registration Office will notify the reason and return the documents to the registration requester;
• Extract or measure cadastral maps if necessary;
• Send information transfer form to the tax authority to determine and notify financial obligations payable (if any);
• Confirm the change content (sublease) in the Certificate;
• Edit and update change information in cadastral records and land databases.

Step 4: Return results:

• After completing the procedure, the competent authority returns the results to the enterprise in the registered form;
• According to the provisions of Point c, Clause 1, Article 22 of Decree 101/2024/ND-CP, the time to carry out this procedure is no more than 05 working days from the date of receipt of valid documents.

Upon receiving the Certificate of confirmation of change content, the enterprise and the lessee can exercise their rights and obligations according to the agreed content in the land use rights sublease contract and according to the provisions of law.

Consulting services on procedures for subleasing land leased from the state by businesses at Long Phan Consulting Company

Long Phan Consulting Company provides comprehensive consulting services on procedures for subleasing land leased from the state. Long Phan Consulting Company’s consulting services include three main stages:

• Consulting on conditions and rights to sublease land use rights;
• Drafting and reviewing land use rights sublease contracts;
• Support land change registration procedures;
• Work with the Land Registration Office and competent state agencies to complete procedures;
• Consulting on effective dispute resolution plans.

With a team of experienced experts in the land field, Long Phan Consulting Company is committed to providing high-quality consulting services, helping businesses successfully sublease land leased from the state quickly and effectively.

Some frequently asked questions about conditions for enterprises to sublease land leased from the state

We would like to provide some common questions about this issue. We invite you to consult to better understand the conditions for subleasing land leased from the state

Can an enterprise sublease part of the land area rented from the State?

Yes, businesses can sublease part of the rented land area, as long as they fully meet the conditions prescribed by law and are approved by the competent authority.

Is the land sublease term limited?

Yes, the land sublease term cannot exceed the remaining land use term of the enterprise leasing land from the State.

Do businesses need to ask for permission from state agencies when subleasing land?

Yes, businesses need to carry out land change registration procedures at the Land Registration Office and have it confirmed by the competent authority.

What content does a land sublease contract need to contain?

The land sublease contract needs to have main contents such as information about the parties, information about the land plot, lease term, rental price, rights and obligations of the parties.

Do businesses have to pay tax when subleasing land?

Yes, businesses may have to pay income tax from land sublease activities according to tax laws.

With the above answers, we hope to have partly answered your questions about the conditions for enterprises to sublease land leased from the state.

Conclude

Conditions for enterprises to sublease land leased from the state are strictly regulated in the Land Law 2024 and its guiding documents. Understanding these regulations helps businesses properly exercise their rights and obligations and avoid legal risks in the business process. Customers who need detailed advice on procedures for subleasing land rented from the state, please contact Long Phan Consulting Company via the hotline 0906735386 for timely and professional support.