Through the receiving and answering system of businesses’ recommendations, Mr. Bui Ngoc Ha (in Ho Chi Minh City) made a request that the authorities give opinion on some contents related to land use rights, referring the case of a foreign-invested enterprises using land formed through the purchase of shares of Vietnamese businesses.

Company A, a domestic capital business, was established in Binh Tan District, Ho Chi Minh City on the basis of capital contribution with land use rights (residential land, long-term land lease) of domestic individuals and organizations. The domestic individuals and organizations-the shareholders of company A then transferred their shares to foreign individuals and organizations and company A is now a foreign-invested enterprise through the purchases of shares.

Mr. Ha would like to ask “Is company A eligible to transfer the land use rights in Binh Tan district, Ho Chi Minh City (residential land, long-term land lease) to Vietnamese organizations and individuals?

Regarding this issue, the Ministry of Nature Resources and Environment gives following opinion:

Regarding the capital contribution with land use rights to company A, the value of land use rights was capitalized before transforming into the foreign-invested enterprise, pursuant to Clause 4, Article 183 of Law on Land:

Foreign-invested enterprises that lease land from the State with full one-off rental payment for the entire lease period have the rights to transfer land use rights and land-attached assets under their ownership during the land use term;

Foreign-invested enterprises that lease land from the State with annual rental payment are not entitled to transfer the land use rights. Foreign- invested enterprises may sell assets attached to leased land when fully meeting the conditions prescribed in Article 189 of Law on Land.

Regarding the capital contribution with land use rights which is not capitalized to company A before transforming into foreign-invested enterprise, foreign-invest enterprise has the rights and obligations to use land stated in the capital contribution contract signed when forming company A in accordance with civil laws, the law on enterprises and other related laws.