Legal News

[Investment] New provisions for delays in land use accompanying the implementation of investment projects under the 2024 Land Law

2024/11/15

On January 18, 2024, the Vietnamese National Assembly promulgated the revised “Land Law of 2024,” adding provisions regarding land use periods. This revision will have a significant impact on investment projects by foreign companies, including Japanese companies, in Vietnam.

Compared to the 2013 Land Law, the 2024 version has tightened regulations on land use in connection with the implementation of investment projects. Article 81, Paragraph 8 stipulates the following conditions for land used in investment projects:
• If the land is not used continuously for 12 months from the date of handover, or if the progress of the registered investment project is delayed by 24 months, the investor may request an extension of up to 24 months, but during this period, the investor is obligated to pay additional land use fees or rent to the state.
• After the extension period ends, if the land is not used, the government may expropriate the land without compensation.

The purpose of this amendment to the Land Law is to clarify the provisions regarding delays in land use and to apply them more strictly. Additionally, by aligning with the 2020 Investment Law, it is expected that transparency in the progress of investment projects will be enhanced.

Investors are required to appropriately understand the land use term and progress of investment projects to avoid expropriation risks.

References:
・2024 Land Law
・2020 Investment Law
・Decree No. 102/2024/ND-CP (issued on July 30, 2024)