Land Use Conversion Without Investment Approval

Land use conversion without investment approval for projects not requiring investment policy approval shortens procedural time, reduces administrative steps, and helps investors implement projects quickly. This regulation optimizes land resources and increases flexibility in production and business activities. It also promotes a transparent, competitive investment environment that aligns with economic development needs.

Legal Basis and Conditions for Land Use Conversion

The primary legal basis for approving a land use conversion is the annual land use plan approved by a competent state agency. For individuals, the decision may also be based on the approved land use zoning or urban planning. This ensures that any land use conversion aligns with the local socio-economic development orientation and does not disrupt the master plan.

Under Clause 2, Article 122 of the Land Law 2024, investors must meet three mandatory conditions:

• Provide an escrow deposit or other forms of security as stipulated by investment laws.
• Possess the financial capacity to ensure land use proceeds according to the project’s schedule and meet other relevant legal requirements.
• Have no violations of land laws. If a violation occurred, the investor must have fully complied with the effective decision or judgment from a competent authority at the time of the application. This assessment covers all land parcels used by the applicant nationwide.

A special case involves projects for commercial housing development (for sale, lease, or lease-purchase). According to Point b, Clause 1, Article 32 of the Investment Law 2020, amended by Point b, Clause 8, Article 6 of the Law on Management and Use of Public Assets 2025 (effective July 1, 2025), these projects must obtain an investment policy approval from the Provincial People’s Committee. Therefore, commercial housing projects cannot bypass the investment approval step.

For cases involving rice cultivation land or forest land, Clause 1, Article 122 of the Land Law 2024, amended by Clause 3, Article 8 of Decree 151/2025/ND-CP (effective July 1, 2025), requires written approval from the Provincial People’s Committee before the competent authority can decide on the land use conversion. This rule does not apply to projects under the investment approval jurisdiction of central government agencies that have already been approved.

Investors must check the district-level annual land use plan before submitting an application. If the proposed land area is not included in this plan, the application will lack the legal basis for approval.

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Authority for Approving Land Use Conversion Without Investment Approval

According to Point d, Clause 1, Article 9 of Decree No. 151/2025/ND-CP, the Provincial People’s Committee has the authority to approve land use conversion for organizations implementing investment projects that do not require investment policy approval.

Under Point m, Clause 1, Article 5 of Decree No. 151/2025/ND-CP, the Commune People’s Committee has the authority to approve land use conversion for individuals after receiving this authority from the District People’s Committee.

However, as per Point a, Clause 2, Article 123 of the Land Law 2024, individuals converting agricultural land to commercial or service land on a scale of 0.5 hectares or more must obtain written approval from the Provincial People’s Committee before the Commune People’s Committee can issue a decision. This regulation ensures large-scale projects are managed strictly and align with local socio-economic development plans.

Identifying the correct competent authority is critical. Submitting the application to the wrong agency will result in its return, causing delays. It is advisable to consult a land law specialist for precise guidance on jurisdiction and procedures.

Dossier and Implementation Process

According to Appendix I of Decree No. 151/2025/ND-CP, the dossier for a land use conversion application must include the following components:

• An application form (Form No. 01, issued with Decree 151/2025/ND-CP).
• The investment project file for the proposed forest area; a report on the current forest status, and a map of the current forest status as required by forestry law (for cases involving land and forest allocation).
• A plan for using the topsoil layer (Form No. 26, issued with Decree 151/2025/ND-CP) for cases involving the conversion of rice cultivation land.
• One of the following documents:
  • A copy of the document approving the investor selection result.
  • A copy of the investment project approval, investment policy approval, or a document approving both the investment policy and the investor.
  • A copy of the document from the competent state agency approving the investor.
  • A copy of the document regarding the unsuccessful auction of land use rights.
  • A copy of the document on the result of a real estate project transfer.
  • Copies of documents for cases requiring land recovery.
  • A Certificate of Land Use Rights or other relevant land papers from previous periods.

The procedure for land use conversion differs based on whether a land use levy is payable.

Procedure When Land Use Levy is Payable:

1. Step 1: Dossier Submission The applicant submits the dossier to the one-stop shop of the Provincial People’s Committee.
2. Step 2: Preliminary Appraisal The specialized agricultural and environmental agency directs the Land Registration Office to provide land database information and create a cadastral map extract. It guides the applicant to supplement documents if needed. The agency then reviews the dossier, conducts a field inspection, and collaborates with other agencies to determine any applicable land use levy exemptions before submitting the file to the Provincial People’s Committee.
3. Step 3: Approval The Chairman of the Provincial People’s Committee reviews the file and issues a decision approving the land use conversion. The specialized agency then sends land information to the tax authority.
4. Step 4: Financial Obligation and Record Update The tax authority calculates and issues a notice for the land use levy. The applicant pays the levy. The tax authority confirms payment completion. The Land Registration Office updates the land database and cadastral records.

Procedure When No Land Use Levy is Payable:

• Step 1: Dossier Submission The applicant submits the dossier to the one-stop shop of the Provincial People’s Committee.
• Step 2: Dossier Preparation The specialized agricultural and environmental agency directs the Land Registration Office to provide land data and a cadastral map extract. It reviews the dossier, conducts a field inspection, and completes the file for submission to the Provincial People’s Committee.
• Step 3: Approval and Update The Chairman of the Provincial People’s Committee issues a decision approving the land use conversion. The Land Registration Office updates the land database and cadastral records.

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Financial Obligations in Land Use Conversion

According to Article 8 of Decree No. 103/2024/ND-CP, the financial obligations for a land use conversion are determined as follows for households and individuals converting land to residential land:

$LandUseLevy=Post-ConversionLandValue-Pre-ConversionLandValue$

Where:

• Post-Conversion Land Value = Area x Land Price as per regulations.
• Pre-Conversion Land Value is calculated based on specific rules for the original land type.

If the post-conversion land value is less than or equal to the pre-conversion value, the land use levy is zero.

Services from Long Phan Consulting Company

Long Phan Consulting Company provides expert advisory services for land use conversion, backed by a team of specialists with extensive experience in land law and investment.

Our professional support services at Long Phan Consulting Company include:

• Dossier Preparation and Review: We draft application dossiers to regulatory standards and perform cross-checks to ensure all documents are complete, accurate, and valid, preventing rejection due to errors. We also prepare related land financial records.
• Representation and Monitoring: We act on behalf of clients to submit dossiers, work directly with relevant government departments, and secure the final results. We actively monitor the processing workflow, provide regular updates, and ensure the project stays on schedule.
• Problem Resolution and Financial Advisory: We promptly provide clarifications or supplementary documents upon request and work with case officers to resolve any issues. We assist in appraising the land’s origin, checking planning compliance, assessing risks, and providing detailed solution reports. We also offer precise calculations of financial obligations and advise on legal methods to optimize costs.

Frequently Addressed Topics

Here are common topics regarding land use conversion for projects not requiring investment policy approval.

Core Conditions for Land Use Conversion

According to the Land Law 2024, a land user must satisfy three fundamental conditions to receive approval for a land use conversion from a competent state agency:

• Financial Capacity: The land user must prove they have the financial resources to implement the project or new land use purpose after conversion. Proof can include financial statements, credit agreements, bank balance confirmations, or other documents demonstrating capital.
• Security Deposit: For conversions related to investment projects that require a security deposit under investment law, the investor must fulfill this obligation with the competent authority before the dossier is reviewed.
• No Unresolved Land Law Violations: The land user must not be subject to any pending administrative penalties or disputes concerning land use rights. Any previous violations must be fully resolved.

Legal Basis: Clause 2, Article 122, Land Law 2024.

Status of Commercial Housing Projects

No, these projects are not exempt from investment policy approval. According to the Investment Law 2020, projects for the construction of commercial housing for sale, or for sale combined with lease, always require an investment policy approval document from the Provincial People’s Committee. This applies regardless of the project’s size or if the land was allocated by the State.

This is a mandatory regulation to ensure commercial housing development adheres to local planning, land use plans, and urban development needs. The exemption from approval only applies to specific project types, which do not include commercial housing for sale.

Legal Basis: Point b, Clause 1, Article 32, Investment Law 2020.

Dossier Submission Authorities

The authority for receiving applications is determined by the type of land user:

• For Organizations (enterprises, cooperatives, social organizations, economic entities, etc.): The dossier is submitted to the Provincial People’s Committee where the land is located. The Department of Natural Resources and Environment (DONRE) acts as the advisory and appraisal body.
• For Households and Individuals: The dossier is submitted to the Commune People’s Committee where the land is located. Alternatively, it can be submitted to the Land Registration Office or its branch if the locality has this arrangement for direct reception.

Legal Basis: Article 9 and Article 5, Decree No. 151/2025/ND-CP.

Critical Dossier Documents

Two types of documents are essential for the validity of a land use conversion application:

• Application for Land Use Conversion: This must be completed using the official template from Appendix I of Decree 151/2025/ND-CP. It must clearly state the current and proposed land types, area, location, post-conversion purpose, and a commitment to comply with the law.
• Certificate of Land Use Rights (Red Book or Pink Book): This is the legal document proving the applicant’s lawful right to use the land parcel. A copy is submitted with the dossier, and the original is presented for verification.

Legal Basis: Appendix I, Decree No. 151/2025/ND-CP.

Calculation of the Land Use Levy

In principle, the land use levy for conversion is based on the difference in land value:

The land value after conversion is calculated based on the price of residential, commercial, service, or other new land type according to the provincial price framework or a specific land price decision. The land value before conversion is based on its existing land type.

The formula is: $LandUseLevy=Post-ConversionLandValue-Pre-ConversionLandValue$

The tax authority will determine the exact amount payable based on the land valuation results and the decision of the Provincial People’s Committee.

Legal Basis: Article 8, Decree No. 103/2024/ND-CP.

Conclusion

Land use conversion for projects not requiring investment policy approval demands a firm grasp of specialized land regulations. For expert consultation, please contact Long Phan Consulting Company at our hotline: 1900 636 389. We guarantee absolute information confidentiality and provide professional liability insurance for our services.

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