Land use rights as in-kind capital contribution in Vietnam

We are setting up a joint-stock company in Da Nang. The company shall be owned by 03 shareholders, one of them shall contribute capital in the form of land use rights. Can an entity contribute land use rights as capital to form a new company in Vietnam ?

DMS Lawyers in Danang, Vietnam advises about provisions of law about land use rights contributed as capital ?

Assets contributed as capital:

Assets contributed as capital may be Vietnamese Dong, freely convertible foreign currency, gold, value of land use rights, value of intellectual property rights, technologies, technical know-how and other assets which can be valued in Vietnamese Dong (Clause 1 Article 35 Law on Enterprises No. 68/2014/QH13 dated 11/26/2014).

Transferring ownership of assets contributed as capital:

In respect of assets with registration of ownership or value of land use rights, the person contributing capital must carry out the procedures to transfer the ownership of such assets or the land use rights to the company at a competent State agency. Registration fees shall not be payable in respect of a transfer of ownership of assets contributed as capital. (Point a Clause 1 Article 36 Law on Enterprises No. 68/2014/QH13 dated 11/26/2014).

Receiving land use rights as in-kind capital contribution:

The State shall adopt policies to encourage the lease of land use rights or receiving land use rights contributed as capital of economic organizations, households and individuals to implement the projects or facilities for production and business (Article 73 Law on Land No. 45/2013/QH13 dated 11/29/2013).

Conditions to contribute land use rights as capital:

Land users may exercise the rights to exchange, transfer, lease, sublease, inherit, donate or mortgage land use rights and contribute land use rights as capital when meeting the following conditions:

Having the certificate, except the case prescribed in Clause 3, Article 186 and the case of receiving inheritance prescribed in Clause 1, Article 168 of this Law;

The land is free of disputes;

The land use rights are not seized to secure judgment enforcement;

Within the land use term.

In addition to the conditions specified in Clause 1 of this Article, when exercising the rights to exchange, transfer, lease, sublease, inherit, donate or mortgage land use rights and contribute land use rights as capital, land users must also be eligible under Articles 189, 190, 191, 192, 193 and 194 of this Law.

The exchange, transfer, lease, sublease, inheritance, donation or mortgage of land use rights or contribution of land use rights as capital must be registered with the land registration agency and will take effect from the time of registration in the cadastral book (Article 188 Law on Land No. 45/2013/QH13 dated 11/29/2013).

Order and procedures for contribution as capital of land use rights:

A land user shall submit 1 dossier set for exercise of rights of land users and owners of assets affixed to land.

For exercising the rights of land users on part of a land parcel, before submitting dossiers for exercise of rights of land users, land users shall request the land registration office to measure and divide the land area on which land users need to exercise their rights (Article 79 Decree No. 43/2014/NĐ-CP dated 05/15/2014).

Notarization and authentication of contracts:

Contracts on transfer, donation, mortgage or contribution of land use rights as capital or the rights to use land and assets affixed to land must be notarized or authenticated, except the case of real estate business prescribed at Point b of this Clause (Point a Clause 3 Article167 Law on Land No.45/2013/QH13 dated 11/29/2013).

Registration of change:

Change registration is conducted in the cases the land user or the owner of   assets affixed to land exercises the right to exchange, transfer, lease, sublease, inherit, donate; mortgage or contribute as capital land use rights or assets affixed to land (Point a Clause 4 Article 95 Law on land No. 45/2013/QH13 dated 11/29/2013).

Related topics:

Conditions for transferring all or a portion of a real estate project in Vietnam;

May an overseas Vietnamese acquire houses associated with land use rights in Vietnam ?

Term of land allocation or land lease to FDI enterprises in Vietnam;

Forms of land use applicable to a foreign invested company in Vietnam.

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DMS LAW LLC
Director
(Signed)
Lawyer Do Minh Son