This Decree provides detailed regulations on the implementation of the Ordinance on rights and obligations of foreign organizations and individuals renting land in Vietnam.

Chapter I

GENERAL PROVISIONS

Article 1: This Decree provides detailed regulations on the implementation of the Ordinance on rights and obligations of foreign organizations and individuals renting land in Vietnam.

Article 2: Foreign organizations and individuals who are permitted to rent land in Vietnam (hereinafter referred to as land renting party) include:

1. Diplomatic representative offices, consul offices and other representative offices having diplomatic functions of foreign countries.

2. Representative offices of the UN organizations in Vietnam, intergovernmental bodies and organizations, representative office of intergovernmental organizations;

3. Foreign organizations and individuals, Vietnamese residing overseas, investing in Vietnam in accordance with the Law on Foreign Investment in Vietnam.

If the Vietnamese party can use the value of rented land as its contribution to the joint venture with foreign partners or cooperative business constra cts with foreign partners, the Vietnamese party will be considered the land renting party.

If a joint venture enterprise rents land, the competent representative of the joint venture enterprise is the land renting party.

Article 3: The land renting party has to observe regulations of Law on Land, the Ordinance on rights and obligations of foreign organizations and individuals renting land in Vietnam, this Decree and other existing stipulations of Vietnamese Law on land management and use.

Article 4: The land renting party stipulated in Points 1 and 2 of Article 2 is to be based on bilateral treaties and "mutual benefit" principles to sign contracts on land renting in accordance with the stipulations of this Decree. The land renting party enjoys priority regulations, exemptions and reductions, according to bilateral or multilateral treaties that are taken the Socialist Republic of Vietnam and the Land renting party.

If there are no international treaties, the Vietnamese Government will regulation treaties, the Vietnamese with the Ordinance, for each concrete case.

Article 5: The land renting party has to pay land rent to the State of Vietnam; the land - using party has to give compensation to those whose land is collected to lease; to pay real-estate tax while making procedures on land renting. The Ministry of Finance prices the land for foreign organizations and individuals.

Article 6: The General Department of Real Estate in combination with concerned Ministries and Branches appraises and reports to Sate - competent bodies mentioned in Decree 191/CP dated 28th December 1994 of the Government, who will make decisions on land lease.

Chapter II

REGULATIONS ON LAND RENTING CONTRACTS

Article 7: Contract on land renting is a document signed by the competent bodies of the State of Vietnam and the law renting party, in accordance with the stipulation in Article 8 of this Decree.

Article 8: Pursuant to the Decision on land lease of state competent bodies, within 15 days, the People's Committee of provinces and cities under the direct management of the Central Committee delegate the Real Estate Council to sign contracts with the land renting party

Article 9: Major contents of a contract on land renting are:

1. Name in full, nationality and address of authoritative representatives of land leasing and land renting parties.
2. Purpose of the rented land and its existing conditions.
3. Area of the rented land its existing conditions
4. Land rents
5. Term of land renting
6. Mode and term of payment.
7. Responsibilities of each party in the implementation of the contract.
8. Effectiveness of the contract.

Pursuant to the contract's content, the General Department of Real Estate issues contract forms, assuring a unified application throughout the country and appropriateness for each type of organization; renting land for business production and otherwise.

Article 10: A land renting party wishing to extend the rental contract has to send an application form to competent bodies who decide the land lease, at least 6 months before the contract comes to an end. Within 1 months of receiving the application form, the land leasing party must inform the land renting party of its decision.

Article 11: If the land renting party is allowed by the Vietnamese Government to transfer tenants, the new tenant must a new contract on renting land.

Article 12: When the contract comes to an end, the contract signing parties have to carry out procedures on contract settlement.

If the land renting party return the rented area after the contract deadline, it has to pay rent for the extra period and compensation for the losses incurred.

If the land renting party return the rented area after deadline, the land leasing party has the right to ask the renting party to pay rent for the extra period and compensation for losses caused by the lateness.

Chapter III

STIPULATIONS ON MORTGAGE OF VALUE OF RIGHT TO LAND USE

Article 13: The land renting party stipulated in Point 3 Article 2 of this Decree can mortgage the value of assets belonging to it in connection with its right on land use, in Vietnam's Banks in order to borrow capital for production according to the following regulations:

1. The amount of borrowed capital is agreed to by the Bank and the mortgaging party.

2. When the deadline comes, if the mortgaging party does not pay the debt, the Bank has the right to ask the competent state bodies to announce the sale of the mortgage assets, in order to recoup its capital and interest. Those who buy assets have the right to rent land and use land for the purposes under regulations, or the bank has the right to own shares to the value of the debt and to retransfer the shares in order to recoup capital

3. If the mortgaging party has to depart before the debt - payment deadline comes, the Bank has the right to ask for an announcement to sell the assets in order to recoup capital and interest, and the buyers have the right to rent and use the land for lawful purposes.

Article 14: In order to mortgage, the mortgaging party and the Bank have to sign on mortgage contracts.

The State Bank of Vietnam in combination with the General Department of Real Estate provides forms of contracts on mortgage.

Article 15: The mortgaging party has to register for mortgage right of land use at the Department of Real Estate. When the mortgage contract comes to an end, the mortgaging party has to complete procedures on mortgage elimination.

Chapter IV

REGULATIONS ON LAND RENTING TO INVEST IN INFRASTRUCTURE CONSTRUCTION AND THE RE-LEASING OF LAND AT THE EXPORT PROCESSING AND INDUSTRIAL ZONES.

Article 16: The renting of land to investment in infrastructure construction and for re-lease is implemented under the regulations as follows:

1. Those who rent land to invest in infrastructure construction must have investment licences for infrastructure construction granted by the Committee for Cooperation and Investment.

2. The rented area for infrastructure construction must be located in the export processing and industrial zones planned by the competent state bodies.

3. The Prime Minister of the Government decides to lease land for infrastructure construction.

4. Investors-in chief bear the responsibility for the quality of infrastructure construction during the use period.

Article 17: Organizations and individuals wishing to re-rent land already used for infrastructure construction have to handle the following dossiers:

1. Application forms for land rerenting
2. Feasibility projects or investment projects

These dossiers are sent to the land renting organization for infrastructure construction.

Article 18: There leasing of land in export processing and industrial zones is carried out through contract on land re-renting stipulate term of retail and provisions concerning both parties, and those must be registered at the Real Estate Department.

The General Department of Real Estate provides forms of contracts on land re-renting.

Article 19: Those who re-rent land must use the land for lawful purpose, and must not exchange transfer, or re-lease their land use right of area rented by them.

Article 20: Foreign organizations and individuals investing in Vietnam to construct infrastructure of export processing and industrial zones have to pay tax when re-leasing the land, in accordance with Vietnamese Law.

Chapter V

PROVISIONS OF IMPLEMENTATION

Article 21: This Decree comes into effect from 1st January 1995.

Article 22: Minister of Foreign Affairs, Minister Chairman of the State Committee for Cooperation and Investment, Minister of Finance, Minister of Construction, Governor of the State Bank of Vietnam, Head of the General Department of Real Estate are responsible for guidance on the implementation of this Decree within their power and functions.

Chairman of People's Committees of provinces and cities under Central Management are to organize the implementation of this Decree.

Article 23: This Decree also applies to Vietnamese residing overseas and investing in Vietnam; Joint venture enterprises with foreign countries in which the Vietnamese partner contributes land-use right; and joint venture enterprises with foreign partners renting land in Vietnam.

Article 24: Ministers, Heads of Ministerial - ranking bodies, of provinces and cities under Central Management and Heads of the above - mentioned land using organizations bear the responsibility of implementing this Decree.

On behalf of the Government Prime Minister

VO VAN KIET

Source: Tuoi Tre