Conditions for transferring annual land lease investment projects

Conditions for transferring annual land lease investment projects is a key factor to help ensure transparency and legality in the process of transferring rights and obligations between investors. Understanding these conditions helps the transferor and transferee minimize legal risks, protect legal rights, and promote the process of continuing to exploit and use land effectively and for the right purpose leased by the State.

Current investment project transfer conditions

According to the provisions of Clause 1, Article 46 of the Law on Investment 2020, investors have the right to transfer all or part of a land lease investment project annually when specific conditions are met. These conditions ensure the legality and effectiveness of the investment project transfer. Include:

• The investment project or portion of the transferred investment project is not subject to termination of operation according to the provisions of Clauses 1 and 2, Article 48 of the Law on Investment 2020;
• Foreign investors receiving transfer of investment projects, part of investment projects must meet the conditions specified in Clause 2, Article 24 of the Law on Investment 2020;
• Conditions according to the provisions of land law in case of transfer of investment projects associated with transfer of land use rights and assets attached to land;
• Conditions according to the provisions of housing law and real estate business law in case of transferring housing construction investment projects or real estate projects;
• Conditions specified in the investment policy approval document, Investment registration certificate or other relevant laws (if any);
• When transferring investment projects, in addition to complying with the provisions of this Article, state-owned enterprises are responsible for complying with the provisions of law on management and use of state capital invested in production and business at the enterprise before making adjustments to the investment project.

Fully meeting the above conditions is an important legal basis for the transfer of investment projects to take place transparently, in accordance with regulations and to limit risks arising for related parties.

Can annual land rental investment projects be transferred?

According to Point c, Clause 1, Article 46 of the Law on Investment 2020, it is clearly stipulated that the right to transfer all or part of an investment project to another investor.

In addition, based on the provisions of Point c, Clause 1, Article 34 of the Land Law 2024, economic organizations, public service units, religious organizations, and affiliated religious organizations using land leased by the State with annual rental payments can only sell assets owned by them attached to land, assets owned by them attached to land and lease rights in land lease contracts when meeting the conditions specified in Article 46 of this Law.

In other words, the investor implementing an annual land lease investment project is only allowed to transfer part or all of the investment project as assets attached to land and rental rights in the land lease contract. Project transfer does not include the transfer of land use rights for which the state leases land with annual payment.

In addition to the conditions specified in Clause 1, Article 46 of the Land Law 2024, the annual transfer of investment projects on leased land must also meet the following conditions:

1. Economic organizations, individuals, people of Vietnamese origin residing abroad, and economic organizations with foreign investment capital may sell assets that are projects attached to land leased by the State with annual land rental payment when the following conditions are met:

• Assets attached to leased land are legally created and registered according to the provisions of law;
• The construction has been completed in accordance with the detailed construction planning and the investment project has been approved and approved (if any), except in cases where it must be carried out according to an effective court judgment or decision, an enforcement decision of a civil judgment enforcement agency or a conclusion of a competent state agency on inspection and examination.

2. Economic organizations, individuals, people of Vietnamese origin residing abroad, economic organizations with foreign investment capital that are leased land by the State with annual land rent payment may sell assets attached to land and lease rights in the lease contract when the following conditions are met:

• Conditions specified in Section 1;
• Compensation, support, and resettlement money has been advanced but has not been fully deducted from the land rent payable.

3. The recipient of a project transfer of assets attached to land or purchase of assets attached to land and lease rights in a land lease contract may continue to use the land for the right purpose during the remaining land use term, continue to deduct the advance money that has not been deducted as prescribed in Point b, Clause 2, Article 46 of the Land Law 2024 and must carry out land registration procedures according to the provisions of the Land Law 2024.
4. In case of selling assets attached to land that are construction works that meet the conditions for separating the plot, the plot will be divided to issue a Certificate of land use rights and ownership of assets attached to the land.
5. In case the State leases land with annual land rental payment to carry out infrastructure construction and business projects, you may sell assets attached to the land when meeting the conditions specified in Clause 1, Article 45 of the Land Law 2024 and other conditions according to the provisions of the Law on Real Estate Business.

Procedures for transferring annual land lease investment projects

After the parties sign the investment project transfer contract, for investment projects subject to investment policy approval under the provisions of Article 29 of the Law on Investment 2020 and investment projects granted an Investment Registration Certificate, the investor must also carry out the investment project adjustment procedures under the provisions of Article 41 of the Law on Investment 2020 guided by Article 31 of Decree 29/2021/ND-CP. Specifically:

Negotiating, agreeing and signing the investment project transfer contract

The first thing to do when transferring an investment project is that the parties must negotiate, agree and sign the investment project transfer contract in accordance with the provisions of civil law.

The contract must clearly state the following basic information:

• Information of the parties;
• Detailed information on the project implementation results up to the time of transfer;
• Transfer value;
• Payment method and term;
• Project delivery and acceptance deadline;
• Rights and obligations of the parties;
• Responsibilities of the parties;
• Penalty clause for breach of contract;
• Termination cases;
• Effective date of the contract.

In addition, the contract may include other terms depending on the agreement between the parties.

Investment project adjustment procedures

Transferring an investment project or a part of an investment project will lead to changes in a number of issues related to the project such as changing the investor, project implementation capital, project implementation time,… This leads to the project investor being forced to adjust the investment project in accordance with the changed content. Below are the basic steps to carry out this procedure:

1. For investment projects under the Prime Minister’s authority to approve investment policies:

Based on the provisions of Article 44 of Decree 31/2021/ND-CP, the adjustment procedure includes the following steps:

Step 1: The investor submits 08 sets of documents to the Ministry of Planning and Investment.

Step 2: The competent authority proceeds to obtain opinions:

Within 03 working days from the date of receiving valid documents, the Ministry of Planning and Investment shall send the documents to the competent state agency as prescribed in Clause 3, Article 32 of Decree 31/2021/ND-CP to obtain opinions on the contents of investment project adjustments;

Within 15 days from the date of receipt of valid dossiers, the consulted agencies shall provide comments on the contents of the project adjustment within the scope of state management of that agency;

Step 3: Within 35 days from the date of receipt of valid dossiers, the Ministry of Planning and Investment shall prepare an appraisal report on the contents of the investment project adjustment to submit to the Prime Minister.

Step 4: Within 05 working days from the date of receipt of the appraisal report of the Ministry of Planning and Investment, the Prime Minister shall decide to approve the adjustment of the investment policy. The decision to approve the adjustment of the investment policy shall be sent to the Ministry of Planning and Investment, the Investment Registration Agency and the investor, the ministries, agencies related to the implementation of the investment project, and the agency approving the investor (if any).

Note: For investment projects in construction and business of infrastructure of industrial parks and export processing zones, investors submit dossiers to the Management Board of industrial parks, export processing zones, high-tech zones, economic zones or the provincial investment registration agency in case the Management Board of industrial parks, export processing zones, high-tech zones, economic zones has not been established.

2. For investment projects under the investment policy approval authority of the Provincial People’s Committee

Pursuant to the provisions of Article 45 of Decree 31/2021/ND-CP, adjustment procedures include the following steps:

Step 1: Investors submit 04 sets of documents to the Department of Finance.

Step 2: The investment registration agency processes the documents:

• Within 03 working days from the date of receiving the valid dossier, the Investment Registration Authority sends the dossier to the competent state agency as prescribed in Point b, Clause 4, Article 33 of Decree 31/2021/ND-CP to get opinions on the contents of investment project adjustments;
• Within 15 days from the date of receipt of valid documents, the consulted agencies shall have opinions on the content of adjusting the project within the scope of state management of that agency;
• Within 25 days from the date of receiving valid documents, the Investment Registration Authority prepares an appraisal report on the adjusted contents of the investment project to submit to the Provincial People’s Committee;
• Within 07 working days from the date of receiving the documents and appraisal report from the Investment Registration Authority, the Provincial People’s Committee decides to approve the investment policy adjustment. The decision to approve the investment policy adjustment is sent to the Investment and Investor Registration Authority, the Investor Approval Authority in case of investor approval according to the provisions of Clause 3, Article 29 of the Law on Investment, Departments and agencies related to the implementation of investment projects.

3. For investment projects subject to investment policy approval of the Management Board of industrial parks, export processing zones, high-tech parks, and economic zones

Pursuant to the provisions of Article 46 of Decree 31/2021/ND-CP, adjustment procedures include the following steps:

Step 1: The investor submits 04 sets of documents to the Management Board of industrial parks, export processing zones, high-tech parks, and economic zones.

Step 2: Competent agency processes documents:

• Within 03 working days from the date of receiving valid dossiers, the Management Board of industrial parks, export processing zones, high-tech zones, and economic zones shall send dossiers to competent state agencies as prescribed in Point b, Clause 7, Article 33 of Decree 31/2021/ND-CP to get opinions on the contents of investment project adjustments;
• Within 15 days from the date of receipt of valid documents, the consulted agencies shall have opinions on the content of adjusting the project within the scope of state management of that agency;
• Within 25 days from the date of receiving valid documents, the Management Board of industrial parks, export processing zones, high-tech zones, and economic zones decides to approve the investment policy adjustment. The decision approving the investment policy adjustment is sent to investors and agencies related to the implementation of the investment project.

4. For investment projects that have been granted an Investment Registration Certificate and are not subject to approval to adjust investment policies

Pursuant to the provisions of Article 47 of Decree 31/2021/ND-CP, procedures for adjusting investment projects that have been granted Investment Registration Certificates and are not subject to approval to adjust investment policies are as follows:

• In case of adjusting an investment project related to changing the name of the investment project, the name of the investor in the Investment Registration Certificate, the investor submits a written request to adjust the investment project to the Investment Registration Authority with documents related to changing the name of the investment project and the name of the investor. Within 03 working days from the date of receiving the written request to adjust the Investment Registration Certificate, the Investment Registration Authority shall adjust the Investment Registration Certificate for the investor.
• If the investment project adjustment does not fall into the above cases, the investor submits 01 set of documents as in the above cases to the Investment Registration Authority. Within 10 days from the date of receipt of valid documents, the Investment Registration Authority will adjust the Investment Registration Certificate for the investor.

After completing the investment project adjustment procedures, the transfer of the investment project is basically completed.

Note: For investment projects not falling under the above cases, the transfer of the investment project or transfer of property ownership to the investor receiving the investment project after the transfer shall be carried out in accordance with the provisions of the law on civil affairs, enterprises, real estate business and other relevant provisions of law.

>>> See more: What documents are included in the application for investment policy approval?

In-depth consulting services on transferring annual land lease investment projects at Long Phan Consulting Company

Long Phan Consulting Company provides in-depth consulting services on transferring annual land lease investment projects. With a team of highly specialized and practical experience in the field of land and investment law, Long Phan Consulting Company has supported many domestic and foreign investors in successfully implementing investment project transfer transactions.

Long Phan Consulting Company’s in-depth consulting services include:

• Consulting on conditions for transferring annual land lease investment projects;
• Support drafting project transfer contracts, representing customers to carry out project transfer procedures and project adjustments at competent state agencies;
• In-depth consulting and providing comprehensive solutions suitable to the specific needs of each customer;
• Regularly update the latest changes in file status, ensuring accuracy and efficiency for customers.

With a professional service provision process, Long Phan Consulting Company is always ready to support investors to ensure legality, efficiency and safety in all annual land lease investment project transfer transactions.

Frequently asked questions

Below are frequently asked questions about the conditions for transferring annual land lease investment projects.

What conditions do foreign investors need to meet when receiving annual land lease investment projects?

Foreign investors need to meet market access conditions as prescribed in Clause 2, Article 24, Law on Investment 2020.

What types of investment projects require project adjustment procedures when transferred?

Investment projects approved according to the provisions of Article 29 of the Law on Investment 2020 and investment projects granted Investment Registration Certificates need to carry out adjustment procedures.

What does a dossier requesting adjustment of an investment project include?

The dossier includes a written request for adjustment, proposed adjustment project, documents on the investor’s legal status and financial capacity, documents on land use rights (if any), explanation of technology used, BCC contract (if any), and other related documents.

How long does it take to evaluate investment project transfer documents?

The appraisal period is 90 days from the date of the decision to establish the State Appraisal Council.

What happens if the investment project is terminated?

Investment projects whose operations are terminated according to Clauses 1 and 2, Article 48 of the Law on Investment 2020 will not be allowed to be transferred.

What financial obligations does the transferee of an annual land lease investment project have to accept?

The transferee will take over financial obligations related to land to the state.

What changes does the Land Law 2024 have related to the transfer of annual land lease projects?

The transfer must comply with the conditions prescribed by land law in case of transfer of investment projects associated with transfer of land use rights and assets attached to land as prescribed in Point d, Clause 1, Article 28, Land Law 2024 guided by Article 9, Decree 102/2024/ND-CP.

Conclude

Conditions for transferring annual land lease investment projects require investors to strictly comply with regulations. When there is a need to transfer an annual land rental investment project, customers should consult with experts to ensure compliance with legal regulations. Please contact Long Phan Consulting Company immediately via the hotline: 0906735386 to receive in-depth advice from our team of experienced lawyers.