This amount is divided into two parts: annual land lease payment and a one-time payment for infrastructure lease for the entire lease period. Mr. Whuang T. asks whether splitting the lease into these two components complies with Vietnam's laws on land and investment. If the developer splits the infrastructure lease payment, what rights does his company have regarding this component (e.g., transferring the right to lease this infrastructure to another enterprise)?

The Ministry of Natural Resources and Environment responds to this issue as follows:

According to Article 149 of the Land Law 2013, which regulates industrial zones, export processing zones, industrial clusters, and craft villages:

"1. The use of land for construction of industrial zones, export processing zones, industrial clusters, craft villages must comply with land use planning, land use plans, detailed construction plans approved by competent state authorities.

When planning and establishing industrial zones, export processing zones, plans must simultaneously include residential areas, public works outside industrial zones, export processing zones to serve the living needs of workers working in industrial zones, export processing zones.

2. The State leases land to economic organizations, Vietnamese residing abroad, foreign-invested enterprises for investment in construction and business infrastructure of industrial zones, industrial clusters, export processing zones. For the part of the leased land area subject to annual land lease payment, the lessee has the right to sublease the land with annual land lease payment; for the part of the leased land area subject to one-time land lease payment for the entire lease period, the lessee has the right to sublease the land with either one-time land lease payment for the entire lease period or annual land lease payment. Investors are exempt from land lease payments for land areas used for shared infrastructure construction within industrial zones, industrial clusters, export processing zones."

Thus, according to Vietnamese law, the splitting of the lease into annual land lease and one-time infrastructure lease payments is permissible, and Mr. Whuang T.'s company has the right to sublease the infrastructure lease to another enterprise if the lease terms allow.

3. Economic organizations, households, individuals, Vietnamese residing abroad, and foreign-invested enterprises investing in production and business activities within industrial zones, industrial clusters, and export processing zones may lease land attached to infrastructure of other economic organizations, Vietnamese residing abroad, and foreign-invested enterprises investing in the construction and business operations of infrastructure. They have the following rights and obligations:

a) In the case of leasing land with a one-time land lease payment for the entire lease term, they have rights and obligations as stipulated in Article 174 of this Law;

b) In the case of leasing land with an annual land lease payment, they have rights and obligations as stipulated in Article 175 of this Law.

4. Land users within industrial zones, industrial clusters, and export processing zones must use the land for its designated purpose as determined, issued with the Certificate of Land Use Rights, ownership of residential houses and other property attached to the land, and have rights and obligations as stipulated by this Law.

5. Economic organizations, households, individuals, Vietnamese residing abroad investing in production and business within industrial zones, industrial clusters, and export processing zones, having been allocated land by the State, receiving the transfer of land use rights attached to infrastructure of other economic organizations, Vietnamese residing abroad, and foreign-invested enterprises investing in the construction and business operations of infrastructure within industrial zones, industrial clusters, and export processing zones prior to the effective date of this Law, may continue to use the land for the remaining project term without converting to land lease. Upon project completion, if there is a need, the State will consider leasing the land as stipulated by this Law.

6. The Government shall detail this Article.

In Article 56 (Clause 1) of the Land Law 2013, the State leases land and collects annual land lease payments or one-time land lease payments for the entire lease term in the following cases:

"... d) Economic organizations, Vietnamese residing abroad, foreign-invested enterprises using land for agricultural production, forestry, aquaculture, non-agricultural production and business; land for construction of public works for business purposes; land for investment projects in residential housing for lease;

e) Economic organizations, autonomous public financial institutions, Vietnamese residing abroad, foreign-invested enterprises using land for construction of public works projects;

g) Foreign organizations with diplomatic functions using land for construction of office headquarters."

In Article 23 (Clause 3) of the Land Law 2013, the responsibilities of state management regarding land are stipulated:

"3. People's Committees at all levels are responsible for state management of land in their respective localities according to the authority prescribed in this Law."

Therefore, it is recommended that Mr. Whuang T. contact the local Department of Natural Resources and Environment for specific guidance.