Legal Pathways to Acquire Land Use Rights in Vietnam for Foreign Enterprises

Foreign investors entering Vietnam must navigate a land system unlike that of most other countries. In Vietnam, all land is owned by the state and cannot be privately owned. Instead, the government grants land use rights, which allow businesses to occupy, develop, and benefit from land, functioning similarly to long-term leases.

These rights are essential for operating in sectors like manufacturing, logistics, and tourism, but they are only available to specific types of legal entities. Foreign-owned companies and joint ventures with local partners are eligible to hold land use rights, while representative offices and foreign branches are not.

As a result, structuring the right entity and securing the necessary investment approvals are critical first steps in any land acquisition strategy.

Legal pathways for foreign enterprises to access land in Vietnam

Foreign companies can obtain land use rights through several legal pathways, each suited to different investment models, sectors, and project scales.

The most direct option is leasing land from the government, typically for approved investment projects. This process requires securing an Investment Registration Certificate (IRC), followed by a land lease agreement issued by the state, often valid for up to 50 years with the possibility of renewal. This approach is common in industrial zones and large-scale infrastructure or manufacturing investments.

Alternatively, foreign enterprises may lease land from existing land use rights holders. These are often Vietnamese companies or industrial park developers that already possess state-issued land rights and are authorized to sublease. This route enables quicker access but requires careful due diligence to confirm legal clarity, compliance with zoning regulations, and the validity of the lessor’s land rights.

A third route involves participating in government auctions of land use rights. While less common due to qualification restrictions and a lengthier process, this pathway may offer access to premium sites in major cities or economic zones. Investors must be pre-approved and demonstrate project viability.

Foreign companies may also acquire land use rights indirectly by purchasing or merging with a Vietnamese entity that already holds them. This M&A approach is particularly useful in sectors or areas with foreign ownership limits. However, investors must ensure that the target company is in good legal standing, that the land rights are transferrable, and that the intended use aligns with the registered project scope.

Forming a joint venture with a local partner provides another avenue, especially when the Vietnamese side contributes land as a capital asset. This is often used in the tourism, agriculture, and education sectors where foreign involvement is capped or restricted.

While joint ventures introduce questions of control and profit-sharing, they can unlock access to locations and licenses that would otherwise be unavailable to foreign investors alone.

For example

A European automotive parts manufacturer seeking to establish operations in central Vietnam entered a joint venture with a Vietnamese logistics company that held land use rights in an industrial zone near Da Nang. The local partner contributed the land as capital, while the foreign investor brought in equipment and expertise. This structure allowed the foreign company to access land without going through a state lease process and enabled faster setup by leveraging the partner’s existing permits and local knowledge.

Licensing and compliance requirements

Regardless of the chosen land access pathway, all foreign-invested enterprises must comply with Vietnam’s licensing regime. The process typically begins with the issuance of an Investment Registration Certificate, which outlines the scope and purpose of the project. This is followed by the incorporation of the legal entity via the Enterprise Registration Certificate.

For land-intensive projects, additional approvals are often necessary, such as zoning confirmation, construction permits, and environmental impact assessments.

Once land access is granted — whether through lease, sublease, or acquisition — the company must register the land use rights with the local land authority. This registration results in the issuance of a Land Use Rights Certificate, commonly known as the “Red Book,” which formally recognizes the company’s legal right to use the land under defined conditions.

Licensing is managed at either the provincial or central level, depending on the project’s size and strategic significance. Large-scale or nationally important investments may fall under the jurisdiction of ministries or central investment review boards.

Financial and tax implications of land use

The financial obligations attached to land use rights vary by method of acquisition, location, and land category. When leasing land from the state, companies may pay a one-time lease fee or opt for annual payments. Rates are influenced by factors such as location, zoning classification, and whether the land is in an incentivized economic zone.

Tax liabilities may include land rental tax, value-added tax on construction, and corporate income tax on profits derived from land-based activities. When land use rights are acquired through secondary transfer or corporate acquisition, transfer taxes and notarial fees may also apply.

Vietnam offers several incentives for foreign investors, particularly in high-tech, export-oriented, or underdeveloped regions. These may include reduced lease fees, tax holidays, or full exemptions for a fixed period. Incentives are generally contingent upon capital investment thresholds, job creation, and project timelines.

Investors must negotiate these concessions during the licensing phase and ensure that all terms are reflected in the IRC and supporting documents.

Managing legal risks and strategic challenges

While Vietnam’s regulatory environment is steadily improving, land access carries legal and operational risks that foreign enterprises must manage proactively. One of the most significant is the risk of revocation if a project fails to meet its implementation timeline or strays from the approved land use purpose.

Incomplete development or idle land use can trigger state review and potential reclamation.

Regulatory amendments, especially those tied to land law reform, foreign investment caps, and zoning policies, can alter the landscape mid-project. This is particularly relevant for long-term ventures, where compliance strategies must adapt to evolving policy. Investors should also be cautious of unclear land titles, which remain a problem in certain regions and can delay registration or expose the business to claims and disputes.

Limitations on the transferability of land rights should be factored into exit strategies. Not all land use rights can be freely sold or subleased, and resale restrictions may apply based on the method of initial acquisition.

Early-stage planning should account for asset liquidation, project handover, or share transfer mechanisms to ensure business continuity and capital repatriation when the project ends.

Market trends influencing land strategy

Vietnam is undergoing a wave of legal modernization, including the introduction of digital land registries, longer lease terms, and stricter zoning enforcement. These changes aim to reduce bureaucratic friction and create a more transparent environment for foreign investors. In parallel, demand for industrial and logistics land is surging, especially in northern provinces such as Bac Ninh and Hai Phong, driven by supply chain diversification from China.

Tourism-related land in coastal provinces continues to attract interest from international developers, often through joint ventures with local landholders. Meanwhile, land for renewable energy and infrastructure projects is being prioritized under national development plans, offering a mix of strategic opportunity and regulatory complexity.

These shifts suggest that the landscape for land use rights in Vietnam is becoming more dynamic and more competitive.

Building a land strategy that works

A successful land acquisition strategy in Vietnam begins with aligning your business model with the legal structures that enable land access. From entity formation and licensing to due diligence and negotiation, every step must be calibrated to ensure compliance and long-term security.

Choosing the right legal pathway depends on your project size, sector, location preferences, and tolerance for complexity.

Investors who approach the process reactively — only engaging legal advisors after identifying a property — often face delays, missed incentives, or regulatory challenges. Those who plan early and engage local expertise are better positioned to acquire land efficiently, protect their investment, and take advantage of Vietnam’s rapid economic growth.

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