RIGHTS OF ENTERPRISES RECEIVING CAPITAL CONTRIBUTION AS LAND USE RIGHTS

Contributing capital through land use rights not only helps optimize asset value but also opens up numerous opportunities for project development and business collaboration. However, to ensure legality and effectiveness, it is essential to have a clear understanding of the legal regulations regarding the necessary conditions for capital contribution through land use rights, as well as the rights of enterprises receiving capital contribution as land use rights.

Who is eligible to contribute capital as land use rights?

Contributing land use rights as capital essentially refers to an agreement between the parties to transfer land use rights by contributing them as part of the capital of an economic organization. “Capital contribution” in this case includes both the contribution to the establishment of a new organization or the increase of the charter capital of an already established economic organization.

However, in order to ensure the intended use of land and effective land management, only certain restricted entities have the right to contribute land use rights as capital, including:

– Domestic economic organizations that are allocated land by the State with land use fees, or leased land with a one-time rental payment for the entire lease period;

– Individuals using agricultural land allocated by the State within the land allocation limit; land allocated by the State with land use fees, or leased land with a one-time rental payment for the entire lease period, with legal recognition of land use rights by the State; land received through land conversion, transfer, donation, or inheritance;

– Overseas Vietnamese individuals, and foreign-invested economic organizations using land to carry out investment projects in Vietnam;

– Overseas Vietnamese individuals who are allowed to own houses in Vietnam; foreigners or overseas Vietnamese who are not permitted to own houses attached to land use rights in Vietnam.

Noted that, the land use rights as contribution asset must meet the requirements for valuation feasibility and the legal ownership rights of the contributing party.

Rights of enterprises receiving capital contribution as land use rights

Enterprises or economic organizations receiving capital contribution as land use rights from individuals or other economic organizations, in cases where they are allocated land with payment for land use rights or leased land with a one-time payment for the entire lease term, have the following rights:

– Common rights of land users, such as to be granted a Land Use Rights Certificate, ownership rights over assets attached to the land, and other related rights…;

– To convey LURs and privately owned property affixed to the land;

– To lease rights to use land and privately owned property affixed to the land in case where the State allocates land on which land levies are imposed; to sublease rights to use land and privately owned property affixed to the land in case where the State leases out land under one-off arrangement;

– To donate LURs to the State; to donate LURs to populations for construction of works serving the common interests of populations or expansion of roads according to planning; to donate LURs for building gratitude houses, charity houses, and great solidarity houses affixed to land according to the law;

– To mortgage rights to use land and privately owned property affixed to the land at credit institutions permitted to operate in Vietnam, other business organizations or individuals according to the law;

– To contribute rights to use land and privately owned property affixed to the land as charter capital of Vietnamese organizations, individuals, persons of Vietnamese descent residing overseas or foreign-invested business organizations according to the law.

>> IS IT PERMITED FOR FOREIGN-INVESTED ENTERPRISES CONTRIBUTING LAND USE RIGHTS AS CAPITAL? https://linconlaw.vn/is-it-permited-for-foreign-invested-enterprises-contributing-land-use-rights-as-capital/

>> ARTICLE NUMBER, BARCODE – RESPONSIBILITIES OF DISTRIBUTION ORGANIZATIONS? https://linconlaw.vn/article-number-barcode-responsibilities-of-distribution-organizations/