After a long freeze caused by the pandemic, Vietnam Government has initiated policies to restore the economy, particularly through restoring investment projects and creating favorable conditions for investors. Stemming from this policy, the Ministry of Planning and Investment issued Official Dispatch No. 2541/VC-TCT (dated 18th April 2022) to remove some difficulties for investors during the implementation of investment projects, especially for projects related to land use. The following article will summarize some answers from competent authorities on the said topic.

1. Whether investors are required to carry out procedures for approving investment policies

Question:

Does the project require the State to assign land, lease land through auctions or bidding must carry out procedures for approving investment policies of provincial-level People’s Committees?

Official Dispatch 2541 responds:

According to Article 29.2 of the Law on Investment, the selection of investors to implement the project as prescribed in Point a and Point b Clause 1 of this Article shall be carried out after approving the investment policy, unless the investment project is not subject to approval of the investment policy.

Under Article 29.2 of Decree No. 31/2021/ND-CP (dated 26th March 2021) detailing and guiding the implementation of the Law on Investment, for investment projects subject to approval of investment policies specified in Articles 30, 31 and 32 of the Law on Investment, the competent authority shall consider approving the investment policy and decide on the method to select the investor, such as a through auction of land use rights, and bidding.

Based on Article 32.1.a of the Law on Investment, the Provincial-level People’s Committees shall approve investment policies for investment projects that requests the State to assign land, lease land not through auction, bidding or receiving transfer and investment projects with proposals to allow the transfer of land use purposes.

Based on the above provisions, investment projects that request the State to assign land, lease land through auction of land use rights, bidding for selection of investors not in the cases specified in Articles 30, 31 and Points b, c, d of Article 32.1 of the Law on Investment shall not have to carry out procedures for approving the investment policies before auctioning land use rights or bidding for investor selection.

2. Whether there is a contradiction in the Law on Investment and the Land Law

Question:

According to Article 29.5 of Decree No. 31/2021/ND-CP, before the investment policy is approved, a written consent allowing  transfer receipts, contributing capital, and leasing agricultural land use rights to implement non-agricultural investment projects under the Land Law must have been issued.

Article 73 of the Land Law stipulates that for production and business projects, the investor may receive the transfer, contribute capital, lease land use rights to implement the project after its investor is determined (after approving the investment policy, the investor) implements the project).

So does Article 29.5 of Decree No. 31/2021/ND-CP contradict Article 73 of the Land Law?

Official Dispatch 2541 responds:

Article 29.5.b of Decree No. 31/2021/ND-CP provides that “competent authority can allow the transfer, receive capital contributions, lease agricultural land use rights to implement the project of investment in non-agricultural production and business under the Land Law.

This content is under Article 193 of the Land Law on conditions for receiving transfer, receiving capital contributions, renting the right to use agricultural land for the implementation of non-agricultural production and business investment projects. Accordingly, economic organizations, households and individuals shall be allowed to receive transfers, receive capital contributions, lease agricultural land use rights for the implementation of non-agricultural production and business investment projects when a corresponding written approval is issued by competent authority.

Article 73 of the Land Law provides only general provisions on the use of land through the form of transfer, lease of land use rights, receiving capital contribution by land use right for production and business (the conditions for receiving the transfer of agricultural land use rights for the implementation of production investment projects, non-agricultural business has not been stipulated).

Thus, Article 29.5.b of Decree No. 31/2021/ND-CP complements Article 193 and does not contradict Article 73 of the Land Law.

3Investors and golf course projects

Question:

For investment projects with land use (large area, multi-purpose, including: urban, service, commercial, sports, golf course, etc.); is it necessary to separate a  golf course project into an independent project to be implemented?

Official Dispatch 2541 responds:

The requirement for proposing a golf course project as an independent project within resort projects, entertainment services, and integrated entertainment with golf courses under Article 10.2 of Decree No. 52/2020/ND-CP on investment in construction and business of golf courses  was abolished through  Article 107.1 of Decree No. 31/2021/ND-CP.

Question:

What other documents are required to determine the right to use the project execution location as prescribed in Article 33.1. of the Law on Investment?

Official Dispatch 2541 responds:

According to Article 33.1 of the Law on Investment, the dossier for approval of the investment policy of the investment project of the investor includes a copy of document on land use rights or other documents determining the right to use the location for the implementation of the investment project in case the investment project does not request the State to assign land, land lease, or allows to change the purpose of land use.

Article 189 of the Civil Code has stipulated that the right to use is the right to exploit the use, benefit and income from property. To others by agreement may transfer this right to others or under Law. Accordingly, the right to use the location may be expressed through forms such as contracts donated to real estate (Article 459), lease contracts (Article 472), contracts for loan of property (Article 494), land use right contract (Article 500), etc.

Based on the above provisions, the right to use the location will be expressed by different types of documents determined on an individual basis. Therefore, the investor should base documents as prescribed by the Civil Code to consider the right to use the intended location.

Investors often face complex situations in the process of implementing investment projects related to land use, as mentioned above, yet the Official Dispatch also helps investors to avoid hassles about financial capacity and status of investors, business sectors, etc. This will serve as a basis for the competent authorities along with investors to shorten implementing administrative procedures.

The article is based on laws applicable at the time noted as above and may no longer be appropriate at the time the reader approaches this article as the applicable laws and the specific cases that the reader may wish to apply may have changed. Therefore, the article is for referencing only.

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