Foreign enterprises are allowed to mortgage land use rights.
In the latest draft (draft 12) Resolution on the establishment and operation of financial centers in Vietnam, many policies are proposed, notably regulations on land policy.
Accordingly, the Ministry of Planning and Investment (MPI) proposes: For industries, occupations, and fields that are priority industries and occupations for development of financial centers as prescribed in the Prime Minister's establishment decision, the land use term shall not exceed 70 years; for other industries and occupations, it shall not exceed 50 years.
When the term expires, if the land user has a need to continue using the land, the State will consider extending the land use term, but not beyond the prescribed term.
Economic organizations and enterprises with foreign investment capital have the right to mortgage land use rights and assets attached to land in financial centers at credit institutions licensed to operate in Vietnam to borrow capital to implement investment projects without depending on the form of land rent payment to the State.
Economic organizations and enterprises with foreign investment capital are allowed to mortgage land use rights and assets attached to land at foreign credit institutions to borrow investment capital; in case of disputes, they shall comply with the provisions of Vietnamese law.
Proposal for foreigners working and doing business investment activities in the financial center to be allowed to buy and sell houses in housing projects in the area. Photo: Hoang Ha
When handling mortgaged assets, the mortgagee may only exercise the right to transfer land use rights and assets attached to the land to entities permitted to receive transfers according to the provisions of Vietnamese law.
The drafting unit also proposed that foreigners entering Vietnam to work or conduct business investment activities in the financial center are allowed to receive transfers, assign, and buy and sell houses in housing construction investment projects in the financial center.
Ownership can be carried out through the forms of purchase, hire-purchase, receiving gifts, receiving inheritance from the project investor or organizations, households, individuals owning real estate in the real estate construction investment project. The rights and obligations of investors and owners regarding land are determined in accordance with the form of land allocation and land lease of the real estate construction investment project according to the provisions of the law on land.
Fear of speculation, "pushing" up housing prices
Commenting on the proposal to draft a Resolution, the Ministry of Industry and Trade requested an assessment of the impact on the policy allowing foreigners entering Vietnam to receive transfers, transfer, and buy and sell houses in projects in the financial center.
“Thus, foreigners not in Vietnam can also buy, speculate, and push up prices, leading to unfavorable housing rental for those working in financial centers, reducing cost competitiveness and attracting workers,” the Ministry of Industry and Trade is concerned.
Meanwhile, the Ministry of Natural Resources and Environment proposed reviewing land policies such as land use terms, rights and obligations of land users in financial centers to comply with the law.
Responding to the above proposal, the Ministry of Planning and Investment said that many financial centers in the world have outstanding land policies, including loosening regulations on foreign ownership and transactions such as Dubai, Astana, Abu Dhabi or Singapore.
Therefore, there is a need for some outstanding policies to attract investors in accordance with international practices and actual conditions.
The State Bank of Vietnam recommends a careful assessment of the regulation that "economic organizations and enterprises with foreign investment capital are allowed to mortgage land use rights and assets attached to land at foreign credit institutions to borrow investment capital".
According to the Ministry of Construction, the dossier proposing the National Assembly to draft a resolution needs to clarify the functions of the financial center, distinguish the similarities and differences between the international financial center and the regional financial center to serve as a basis for assessing the implementation of relevant laws on land, housing, real estate business and propose appropriate mechanisms and policies.
In response to this suggestion, the Ministry of Planning and Investment accepted it, but recommended not to distinguish between regional financial centers and international financial centers to ensure synchronous development among financial centers.
Vietnamnet.vn
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