How is receiving the transfer of investment capital as the value of land use rights regulated?

Receiving the transfer of investment capital as the value of land use rights is an important method in investment activities, especially in the real estate sector. Understanding the regulations on the value of land use rights when transferring helps investors determine the correct value of assets, reduce legal risks and optimize profits. The following article will provide detailed information on procedures and notes when receiving the transfer of investment capital as the value of land use rights.

Can businesses receive transfer of investment capital for the value of land use rights?

According to the provisions of Point d, Clause 1, Article 28 of the Land Law 2024, economic organizations with foreign investment capital are entitled to receive transfer of investment capital which is the value of land use rights according to the Government’s regulations. This regulation creates conditions for the transfer of investment capital in the form of land use rights value and important opportunities for FDI enterprises to expand operations in the Vietnamese market.

Decree 102/2024/ND-CP has specified this condition in Clause 1, Article 9, thereby stipulating: “Economic organizations with foreign investment capital are allowed to receive transfer of investment capital which is the value of land use rights of economic organizations that are using land originating from land allocated by the State with land use fees collected, land leased with a one-time payment for the entire lease period and the value of land use rights has become the charter capital of the economic organization.”

Therefore, FDI enterprises are allowed to receive the transfer of investment capital as the value of land use rights when simultaneously meeting the following conditions:

• The transferor is the economic organization that is using the land.
• The origin of the transferor’s land is that the State allocates land with land use fees, or leases land with a one-time payment for the entire lease period.
• The value of land use rights has been calculated into the charter capital of the economic organization.

In case of transfer of investment capital, it is the value of land use rights in special areas such as communes, wards, border towns; coastal communes, wards and towns; island; or areas affecting national defense and security, the transfer must additionally comply with the provisions of investment law and other relevant regulations.

Rights and obligations of enterprises when receiving the transfer of investment capital as the value of land use rights

Enterprises, after receiving the transfer of investment capital as the value of land use rights, will have specific rights and obligations according to the law. According to Clause 1, Article 41 of the Land Law 2024, enterprises receiving the transfer of investment capital as the value of land use rights have specific rights and obligations as follows:

• General rights and obligations of land users according to the provisions of Article 26 and Article 31 of the Land Law 2024;
• Transfer of land use rights and assets attached to the land within the term of land use;
• Lease or sublease land use rights and assets attached to the land during the land use term;
• Mortgage your land use rights and assets attached to land at credit institutions licensed to operate in Vietnam;
• Contribute capital with land use rights and assets owned by you attached to land.

These rights allow businesses to take full advantage of the value of land use rights in business activities, from direct use to exploitation through transactions such as transfer, lease or mortgage. In addition to rights, FDI enterprises must also fulfill all financial obligations to the state such as paying land use fees, land rent, land-related taxes, fees and charges according to the provisions of law.

Procedures for receiving the transfer of investment capital as the value of land use rights

Procedures for businesses to receive the transfer of investment capital that is the value of land use rights include specific steps according to the provisions of land law. According to the provisions of Article 37, Decree No. 101/2024/ND-CP, the procedure for receiving investment capital transfer as the value of land use rights includes the following main steps:

Step 1: Establish a capital contribution agreement and prepare a transfer contract

• The transferor and transferee agree on the content of transferring the capital contribution through a transfer contract, which specifically describes the asset value as land use rights.
• Enterprises need to re-evaluate the legal conditions of the land: term of use, land purpose, type of use (land lease or land allocation with payment), and review the company charter and agreements between members to ensure the transfer is valid.

Step 2: Notarize and authenticate the transfer contract

According to the provisions of Point a, Clause 3, Article 27 of the Land Law 2024, contracts for capital contribution using land use rights, land use rights and assets attached to land must be notarized or authenticated.

Documents for contract notarization include:

• Notarization request form;
• Draft capital contribution contract;
• Minutes of asset valuation being land use rights;
• Legal documents of the individual/organization contributing capital and IRC of the FDI enterprise, personal legal documents of the legal representative of the enterprise;
• Relevant documents such as residence confirmation, authorization to carry out procedures (if any);
• Certificate of land use rights (original).

Step 3: Change the content of enterprise registration receiving capital contribution

After reaching an agreement on capital contribution, the enterprise carries out procedures to adjust the Investment Registration Certificate and Business Registration Certificate.

Step 4: Submit application for land change registration

After receiving the transfer of investment capital as the value of land use rights, it is necessary to carry out procedures for registering land changes at the One-Stop Department according to the regulations of the Provincial People’s Committee on receiving documents and returning results of administrative procedures at the provincial, district and commune levels.

Necessary documents are submitted at the Land Registration Office or District Registration Office Branch (if within jurisdiction). Ingredients specified in Article 29, Decree No. 101/2024/ND-CP include:

• Change registration application according to form No. 11/DK issued with Decree No. 101/2024/ND-CP;
• Certificate of land use rights (original);
• Capital contribution transfer contract or document on transfer of land use rights and ownership of assets attached to land;
• Minutes of asset valuation;
• Documents of payment of financial obligations (if registration fees or income tax arise);
• 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.

>>> See more: Land change registration procedures updated in 2024.

Step 5: The competent authority evaluates the dossier

The competent authority checks the conditions for exercising rights according to regulations. In case the conditions for exercising rights according to regulations are not met, they will notify the reason and return the dossier to the registration requester:

• When dealing with land change registration procedures where the land plot has been granted a Certificate according to the cadastral map or cadastral map measurement of the land plot, the Land Registration Office is not required to measure or re-determine the area of ​​the land plot, unless the land user or owner of assets attached to the land so wishes.
• In case of performing land change registration procedures but the issued Certificate has not used the cadastral map or extracted cadastral map of the land plot, the land user has a need to issue a new Certificate of land use rights, ownership of assets attached to land or is in a case where a new Certificate of land use rights, ownership of assets attached to land must be issued, the Land Registration Office shall carry out the extraction of the cadastral map or extracted cadastral map of the land plot for places where there is no cadastral map or there is only a paper cadastral map that is torn, damaged and cannot be restored and cannot be used for digitization according to regulations to show the diagram of the land plot on the Certificate of land use rights, ownership of assets attached to land.

Note: In cases where financial obligations must be fulfilled, the Land Registration Office shall carry out the work specified in this Point after receiving notification from the tax authority on the completion of financial obligations.

Step 6: Notify the tax authority and the registered entity to fulfill tax obligations

After evaluating the dossier, the Land Registration Office sends the Information Transfer Form to determine financial obligations related to land to the tax authority to determine and notify the collection of financial obligations in cases where financial obligations must be fulfilled according to the provisions of law.

Step 7: Update the database and issue a new land use right certificate

After receiving confirmation that the organization or individual registering land changes has completed their financial obligations, the competent agency shall adjust and update changes in cadastral records and land database; Issue a new Certificate of land use rights, ownership of assets attached to land or confirm changes on the issued Certificate in cases where financial obligations are not required.

At the same time, hand over the Certificate of land use rights and ownership of assets attached to land or send it to the document receiving agency to give to the grantee.

Important notes when carrying out the process of receiving the transfer of investment capital as the value of land use rights

When receiving the transfer of investment capital as the value of land use rights, enterprises should pay special attention to certain issues to ensure that the process is both legally compliant and effective. These notes help businesses avoid legal risks and optimize the transfer process. Here are some specific notes:

• First, carefully check the legality of the land: Before receiving the transfer, businesses need to clearly determine the origin of the land, specifically whether the land is allocated by the State with land use fees collected or leased with a one-time payment. At the same time, it is necessary to review the remaining land use term, ensure that the land use purpose is consistent with the expected business line and check whether the land is subject to recovery planning or not. In addition, it is necessary to determine whether the land belongs to a restricted or prohibited area for foreign investment.
• Second, verify that the value of land use rights has been included in charter capital: According to Decree 102/2024/ND-CP, the value of land use rights must be included in the charter capital of the transferring economic organization. Therefore, businesses need to request the transferor to provide documents such as the company charter showing capital contribution by land use rights, financial statements recording the value of land use rights as an asset of the business, and land use rights valuation records when contributing capital.
• Third, pay attention to financial and tax obligations: Enterprises need to evaluate and estimate arising financial obligations such as corporate income tax that the transferor must pay, registration fees if there is a change in land use, as well as fees and charges related to land change registration procedures. In particular, in cases where foreign elements are involved, it is necessary to consider the provisions of the Double Taxation Avoidance Agreement (if applicable).

The above notes will help businesses prepare well and effectively implement the transfer of investment capital as the value of land use rights, ensuring full compliance with current legal regulations.

In-depth consulting services on procedures for receiving the transfer of investment capital as the value of land use rights at Long Phan Consulting Company

To ensure that the process of enterprises receiving the transfer of investment capital as the value of land use rights takes place smoothly and quickly. We provide comprehensive solutions for businesses during this complex procedure. With a team of experienced experts, we are always ready to support our customers.

Long Phan Consulting Company provides professional consulting services, including:

• Consulting on conditions for transferring investment capital is the value of land use rights;
• Consulting on the rights and obligations of businesses when receiving transfer of investment capital equal to the value of land use rights;
• Instructions for fully and accurately preparing necessary documents for transfer procedures;
• Representing customers to carry out application procedures and work with competent state agencies;
• Consulting and support in resolving problems that arise during the transfer process;
• Drafting documents related to the transfer of investment capital and the value of land use rights;
• Update the latest legal regulations related to land and foreign investment;
• Consulting on related issues after completing transfer procedures.

With in-depth experience and a team of experts knowledgeable about land and investment law, Long Phan Consulting Company commits to accompanying customers throughout the transfer process, ensuring all procedures are carried out in accordance with regulations, efficiency and legal safety.

Frequently asked questions

Below are frequently asked questions about procedures for receiving investment capital transfer using the value of land use rights.

In what cases can foreign-invested enterprises receive transfer of investment capital equal to the value of land use rights?

Enterprises with foreign investment can receive a transfer of investment capital equal to the value of land use rights if the transferor is an economic organization that is using land that was allocated by the State with land use fees or leased land with a one-time payment for the entire lease period, and the value of this land use right has been included in the charter capital of that economic organization.

What types of documents are needed to notarize a contract to transfer capital contribution using land use rights?

The dossier includes a notarization request form, draft capital contribution contract, asset valuation record that is land use rights, legal documents of the capital contributor and investment registration certificate (IRC) of the FDI enterprise, legal documents of the legal representative of the enterprise, related documents (residency confirmation, authorization if any), and original land use rights certificate.

After completing the capital contribution agreement, what registration procedures do businesses need to carry out?

Enterprises need to carry out procedures to adjust the Investment Registration Certificate and Business Registration Certificate, then carry out land change registration procedures.

What does a land change registration dossier include?

The dossier includes the change registration form, original land use right certificate, capital contribution transfer contract or document on land use right transfer, asset valuation record, financial obligation payment documents (if any), and authorization document (if any).

Which agency has the authority to receive land change registration documents?

Documents are submitted at the One-Stop Department according to regulations of the Provincial People’s Committee or at the Land Registration Office or District Registration Office Branch.

Does the land registration office need to re-measure the land area when carrying out change registration procedures?

The land registration office is not required to re-measure if the land plot already has a Certificate according to the cadastral map or extracted cadastral map measurements, except in cases where the land user needs it or the old Certificate does not have a cadastral map.

When must an enterprise fulfill financial obligations related to receiving the transfer of investment capital which is the value of land use rights?

Enterprises must fulfill their financial obligations when incurring registration fees or income tax from the transfer.

After completing financial obligations, how does the process of issuing a new land use right certificate take place?

After receiving notice of completion of financial obligations, the competent authority will revise and update changes in cadastral records, land database and issue a new Certificate of land use rights or confirm changes on the issued certificate.

What legal elements of the land need to be carefully checked before transferring investment capital?

It is necessary to check the origin of the land, remaining terms of use, land use purpose, recovery planning, and consider whether the land is in an area restricted or prohibited for foreign investment.

Conclude

Procedures for receiving investment capital transfer equal to the value of land use rights require investors to understand the procedures and implementation order. Our consulting services not only help customers save time and effort but also minimize legal risks that may arise during this procedure. If you need in-depth advice and answers, please contact Long Phan Consulting Company immediately via the hotline: 0906735386 to receive support from us.