DECREE

DETAILING THE IMPLEMENTATION OF THE ORDINANCE ON THE RIGHTS AND OBLIGATIONS OF DOMESTIC ORGANIZATIONS WITH STATE-ASSIGNED OR LEASED LAND

THE GOVERNMENT

Pursuant to the Law on Organization of the Government on the 30th of September, 1992;
Proceeding from the Land Law on the 14th of July 1993;
Proceeding from the Ordinance on the Rights and Obligations of the Domestic Organizations with State-Assigned or Leased Land on the 14th of October 1994;
At the proposal of the General Director of the General Administration of Land,

DECREES:

Chapter I

GENERAL PROVISIONS

Article 1.- This Decree details the rights and obligations of the domestic organizations with State-assigned or leased land. The allotment of State-assigned land by State-owned businesses for agricultural production, forestry and aquaculture, is regulated by a separate Government decree.

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1. The land used for public or national interests (not for profit), including:

Public traffic roads, bridges, culverts, pavements, water supply and drainage systems, rivers, lakes, dikes, dams, schools, hospitals, market places, parks, flower beds, children's playgrounds, squares, stadiums, airports, harbors, water reservoirs, wells for use by many families, garbage dumps at residential quarters, reservoirs at hydro-electric power plants, electric power grids, power-generating stations, power-transformer stations, infrastructure works, cemeteries, water conservancy works, grounds for scientific research, office buildings (headquarters of State and socio-political organizations), and the special cases decided by the Prime Minister.

2. The land assigned for national defense and security purposes shall comply with Government provisions.

Article 3.- The organization, to which the State leases land, shall pay rent to the State in accordance with the following provisions:

1. The land rent is remitted to the State Budget.

2. The land rent is accounted into the cost of production and business of the leasing organization.

3. The land rent is paid annually. In case of payment in installments over many years or in package, discount is applied in accordance with the provisions of the Ministry of Finance.

4. The Ministry of Finance sets the price brackets for land rent. The People's Committees of the provinces and cities directly under the Central Government shall, on the basis of these brackets, set the detailed brackets to be applied at their localities.

5. The land rent shall not change for at least 5 years. Each increase shall not exceed 15%.

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Article 4.- The agency with authority in land assignment (as provided for in Article 23 of the Land Law) is also the authorized agency in land leasing. Based on the nature and purpose of the project in using the leased land, the authorized agency shall decide the lease period which shall not exceed 50 years. Leases for over 50 years shall be decided by the Prime Minister, but in any case shall not exceed 70 years.

Article 5.- State-owned enterprises, enterprises of political and social organizations, defense and security enterprises, joint-stock companies, limited liability companies, private enterprises, and collective economic organizations which use land for production and business outside agriculture, forestry, aquaculture or salt production (except for special cases decided by the Prime Minister), shall shift to leasing land from the State in the following forms:

1. If the organization, which has not paid the State the fee for land use or has paid it with capital taken from the State budget, shall now pay land lease to the State, starting from the 1st of January, 1995.

2. If it has paid the State its land-use fee not from the State budget, the money shall now be accounted for as land rent, starting from the 1st of January, 1995.

Chapter II

PROVISIONS ON VALUE OF THE LAND-USE RIGHT AS CAPITAL CONTRIBUTION TO JOINT VENTURES, COLLATERAL AND IN TRANSFER OF PROJECTS ON LAND

Article 6.- State-owned enterprises, enterprises of the political and social organizations, defense and security enterprises, joint-stock companies, limited liability companies and collective economic organizations, which are assigned land by the State for use in agriculture, forestry, aquaculture and salt production, may, within the period of their land assignment, use the value of their land-use right as capital contribution to joint ventures in accordance with the following provisions:

1. Joint venture with domestic organizations and individuals:

a/In case the purpose of land use is unchanged, the party having the land-use right shall continue to be assigned with the land by the State. The People's Committee of the province or city directly under the Central Government shall determine the value of the land-use right to be contributed to the joint venture.

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2. The capital contribution with the value of the land-use right to a joint venture with foreign organizations and individuals must have the approval of the authorized State agency as provided for in Decree No. 191-CP of the 28th of December 1994, of the Government. The party which contributes capital in the form of the value of land-use right, must shift to leasing the land, and be registered as owing to the State budget an amount of money equal to its land rent during the period of the joint venture. The value of the land-use right to be contributed to the joint venture is equal to the land rent to be paid during the period of the joint venture, which is set at the rent rate for foreign organizations and individuals.

Article 7.- State-owned enterprises, enterprises of political and social organizations, defense and security enterprises, joint-stock companies, limited liability companies, private enterprises and collective economic organizations, which use the assigned land for agriculture, forestry, aquaculture and salt production, may use the value of their land-use right as collateral, in association with their other properties, at the Bank to borrow capital for their production and business in accordance with the following provisions:

1. The value as collateral shall be determined by the Bank, and shall not exceed the value of the existing properties on that piece of land.

2. By the time the loan expires, if the borrowing organization fails to pay it back, or if it is dissolved before the payment term, the Bank has the right to request the authorized State agency to auction the properties on the piece of land to recover the loan's principal and interest, and assign the land to the purchaser of the properties for continued use.

3. The placement and displacement of the collateral must be registered at the Land Administration Service.

Article 8.- Regarding organizations which were assigned with land by the State prior to the 1st of January, 1995 for use not in agriculture, forestry, aquaculture and salt production, if they have built up projects with capital from the State budget, when these projects are assigned along with the land-use right, they shall remit the money earned from the assignment to the State budget. The price of the assignment shall be determined by the authorized State agency.

Article 9.- Organizations, which lease land from the State, may use the value of the land lease, in association with their own properties which have been built on that piece of land, as collateral at the Vietnamese Bank to borrow capital for production within the lease tenure, in accordance with the following provisions:

1. The value of the collateral shall be determined by the bank, and shall not exceed the combined value of the properties and the land rent which has been paid.

2. By the time the loan expires, or if the organization is dissolved before the payment deadline and the borrowing party fails to pay back its loan, the Bank has the right to request the authorized State agency to auction the properties located on the piece of land to recover the loan's principal and interest; the authorized agency, which leases the piece of land, shall provide the procedure to let the buyer of the properties continue the lease.

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Chapter III

REGULATIONS FOR LAND-LEASING ORGANIZATIONS BUILDING INFRASTRUCTURE FOR SUB-LEASE AT EXPORT-PROCESSING ZONES AND INDUSTRIAL PARKS

Article 11.- Organization, which lease land from the State to build infrastructure works for sub-lease at export-processing zones and industrial parks, include: State-owned enterprises, joint-stock companies and limited liability companies established in accordance with the provisions of law.

Article 12.- The land to be leased for infrastructure construction must lie within the export-processing zones and industrial parks already approved by the authorized State agency.

Article 13.- The People's Committees of the provinces and cities directly under the Central Government shall decide the leasing of land to organizations to build infrastructure by way of tendering. The General Administration of Land, together with the Ministry of Construction, shall issue the regulation on tendering.

The General Administration of Land shall define the procedure for leasing land for infrastructure construction and sub-lease in export-processing zones and industrial parks.

Article 14.- Organizations and individuals, that have the need to sub-lease land plots with ready-built infrastructure projects, must apply for the sub-lease in writing, complete with the economic-technical blue-prints for use of the land and infrastructure, and send them to the land-leasing organizations which will build the infrastructure.

Article 15.- The organizations which lease land to built infrastructure projects, shall sign contracts with the sub-leasing parties, and register with the local Land Administration Service.

The General Administration of Land shall design the form of the land-lease contract and the procedure for registration and maintenance of the sub-lease files.

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1. To use the value of lease of the land plots which are not yet sub-leased, as collateral at the Vietnamese Bank during the lease period, in order to borrow capital for construction in accordance with the provisions of Article 7 of this Decree.

2. To sub-lease the land after completing construction of the infrastructure for each plot, at mutually agreed prices.

3. To make complaints or denunciations when their land-use right is violated or their leased land is affected.

4. To benefit from the utility of public works during the process of investment in the construction and utilization of infrastructure projects.

5. To be compensated for real losses incurred by the State's recovery of the land before the expiry of the lease tenure.

6. To benefit from the fruit of labor and the results of the investment in the leased land; the organizations, which lease land to build infrastructure projects in export-processing zones and industrial parks, are entitled to preferential treatment in accordance with the provisions of law.

Article 17.- The organizations, which lease land from the State to build infrastructure projects, have the obligations:

1. To maintain the infrastructure projects during the whole period of the lease.

2. To pay the land rent in full and in time, as provided for in the land-lease contract.

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4. To return the leased land and the infrastructure on it to the State when the lease expires.

5. To carry out the retrieval decision issued by the authorized State agency for defense and security purposes, or for the national and public interests.

6. Not to harm the environment or damage the land.

7. Not to do harm to the interests of the other land users in the neighborhood.

8. To pay tax and land-use fee, in accordance with the provisions of law.

Chapter IV

IMPLEMENTATION PROVISIONS

Article 18.- The organizations, which are assigned land by the State, must register their use of land in accordance with the provisions of the General Administration of Land.

Article 19.- This Decree takes effect as from the 1st of January, 1995.

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Article 21.- The Minister of Finance, the Minister of Construction, the Governor of the State Bank, the General Director of the General Administration of Land and the Chairman of the Pricing Committee of the Government shall, within the jurisdiction of their service management functions, be responsible for guiding and monitoring the implementation of this Decree.

The Presidents of the People's Committees of the provinces and cities directly under the Central Government shall organize the implementation of this Decree.

Article 22.- The ministers, the heads of the agencies at ministerial level, the heads of the agencies attached to the Government, the presidents of the People's Committees of the provinces and cities directly under the Central Government, and the heads of the land-using organizations are responsible for the implementation of this Decree.

ON BEHALF OF THE GOVERNMENT
PRIME MINISTER




Vo Van Kiet