Vietnam: Land Law 2024 and its draft guiding decrees

Toward a more robust and transparent market

In brief

On 18 January 2024, the National Assembly of Vietnam approved Land Law No. 31/2024/QH15 ("Land Law 2024"), which will take effect from 1 January 2025 to replace Land Law No. 45/2013/QH13 ("Land Law 2013"). Encouragingly, the Government has proposed to the National Assembly for the Land Law 2024 to take effect from 1 July 2024.

The Land Law 2024 aims to address the shortcomings of the Land Law 2013 and to introduce important changes to encourage the growth of the real estate market, while ensuring the robustness and transparency of the land regulations. The first draft of the relevant guiding decrees have also been made available to the public for discussion.


Contents

Key takeaways

In summary, the Land Law 2024 provides the following key updates:

  • Land users' right to choose land rental payment method, i.e., upfront land rental payment or annual land rental payment, is limited due to revised provisions narrowing the land users eligible for upfront land rental payment.
  • The rights of the land users paying upfront land rental seems to be extended to the case of land rental exemption.
  • Land expropriation process is established to (i) reflect transparency and (ii) be applicable to "strictly necessary" cases. Investors will have some room to propose their own land acquisition method (within the limits of the law) and consider the different risks involved.
  • Local authorities would have more power to formulate project tendering and land auction criteria, in particular in relation to commercial residential and mixed-use residential projects.
  • Land prices (for the purposes of arriving at land rental and land compensation figures) are calculated based more on market prices instead of mandated limits from the central Government.
  • Foreign-invested enterprises (FIEs) is defined and with more guidance on their land usage rights.
  • Commercial arbitration is recognized as a method of dispute resolution for land and property related disputes in Vietnam.

Click here to access the full alert.


Copyright © 2024 Baker & McKenzie. All rights reserved. Ownership: This documentation and content (Content) is a proprietary resource owned exclusively by Baker McKenzie (meaning Baker & McKenzie International and its member firms). The Content is protected under international copyright conventions. Use of this Content does not of itself create a contractual relationship, nor any attorney/client relationship, between Baker McKenzie and any person. Non-reliance and exclusion: All Content is for informational purposes only and may not reflect the most current legal and regulatory developments. All summaries of the laws, regulations and practice are subject to change. The Content is not offered as legal or professional advice for any specific matter. It is not intended to be a substitute for reference to (and compliance with) the detailed provisions of applicable laws, rules, regulations or forms. Legal advice should always be sought before taking any action or refraining from taking any action based on any Content. Baker McKenzie and the editors and the contributing authors do not guarantee the accuracy of the Content and expressly disclaim any and all liability to any person in respect of the consequences of anything done or permitted to be done or omitted to be done wholly or partly in reliance upon the whole or any part of the Content. The Content may contain links to external websites and external websites may link to the Content. Baker McKenzie is not responsible for the content or operation of any such external sites and disclaims all liability, howsoever occurring, in respect of the content or operation of any such external websites. Attorney Advertising: This Content may qualify as “Attorney Advertising” requiring notice in some jurisdictions. To the extent that this Content may qualify as Attorney Advertising, PRIOR RESULTS DO NOT GUARANTEE A SIMILAR OUTCOME. Reproduction: Reproduction of reasonable portions of the Content is permitted provided that (i) such reproductions are made available free of charge and for non-commercial purposes, (ii) such reproductions are properly attributed to Baker McKenzie, (iii) the portion of the Content being reproduced is not altered or made available in a manner that modifies the Content or presents the Content being reproduced in a false light and (iv) notice is made to the disclaimers included on the Content. The permission to re-copy does not allow for incorporation of any substantial portion of the Content in any work or publication, whether in hard copy, electronic or any other form or for commercial purposes.