ACQUISITION OF PUBLIC LAND IN VIETNAM

Background
There are several ways to acquire land use rights (“LUR”) for developing a project in Vietnam, but for local real estate developers, “being appointed” as an exclusive investor for the project would be the preferred way.

An investor is often “appointed” by a decision of the relevant governmental body without going through an auction or tendering process. Most of these decisions have been made by the provincial people’s committee, which has the authority to allocate or lease land in its province. Once appointed, an investor has the exclusive right to acquire the LUR from existing land users holding the LUR under private ownership or state ownership. However, the acquisition of LUR under state ownership has recently been subject of examination by the central government. Several dozens of real estate projects have been reported to be under audit or inspection for accusations of failing to comply with the auction/tendering regulations and causing financial losses to the State. As a result, some executive officials in Ho Chi Minh City and Da Nang have been dismissed or arrested for wrong doing. Notably, the State Inspectorate has been reported to have instructed one provincial people’s committee to recover land from a developer, who was conferred with the LUR without an auction, in order to conduct the auction.

In this article, we will discuss the relevant laws on the acquisition of LUR under state ownership and comment on the recent developments.

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