I. Conditions for capital contribution by land use rights
Land users may exercise the right to contribute capital by land use rights when the following conditions are met:
- Have a land use right certificate, except for the following cases:
- In case all recipients inheriting land use rights, ownership of houses and other assets attached to land are foreigners or overseas Vietnamese who are not eligible to buy housing associated with land use rights in Vietnam:
- The heirs may not be granted a Certificate of land use rights, ownership of houses and other property attached to the land but is transferred or gifted to the inherited land use right.
- In case of inheritance of land use rights, land users may exercise their rights when they have a certificate or are eligible to issue certificates of land use rights, ownership of houses and other assets attached to land.
- The land is not in dispute;
- Land use rights are not marginalized to ensure the execution of judgments;
- During the term of land use.
The conversion, transfer, lease, sub-lease, inheritance, gift, mortgage of land use rights, capital contribution by land use rights must be registered at the land registration office and take effect from the time of registration in the cadastral book.
II. Conditions for receiving capital contribution by land use rights
Economic organizations, households and individuals may transfer, receive capital contributions, or lease agricultural land use rights for the implementation of non-agricultural production and business investment projects when they fully meet the following conditions:
- There is a written approval from a competent state agency for an economic organization to transfer, receive capital contribution or lease the right to use agricultural land for the implementation of the project;
- The purpose of use for the land area to be transferred, contributed capital or leased land use rights must be in accordance with the land use planning and plan approved by a competent state agency;
- For land specialized in rice cultivation, it must comply with the provisions of Clause 3, Article 134 of the 2013 Land Law as follows:
- Persons who are allocated or leased land for non-agricultural purposes by the State from land specialized in rice cultivation must pay a sum of money for the State to supplement the lost land area for rice cultivation or increase the efficiency of using rice land according to the Government’s regulations.
III. Dossier of capital contribution by land use right
Application for registration of land fluctuations or houses associated with land use rights according to form No. 09/DK.
Contracts and documents on capital contribution by land use rights, ownership of assets attached to land (original).
Certificate of land use rights or houses associated with land use rights (original).
Written approval of competent State agencies for economic organizations receiving transfers, capital contributions or leases of agricultural land use rights for the implementation of investment projects;
The land user’s written consent for the owner of the property attached to the land to contribute capital to the property attached to the land in case the capital contribution is equal to the property attached to the land but the owner of the property attached to the land is not simultaneously a land user.
IV. Procedures for capital contribution by land use rights
Order of execution:
Step 1: Valuation of land use rights. Valuation of land use rights or houses associated with land use rights can be set by shareholders, company members and jointly responsible or hired by professional valuation companies.
Step 2: Sign a capital contribution contract with land use rights and perform notarization at a notary office. The parties sign capital contribution contracts (specifying the time limit for capital contribution by land use rights) and carry out notarization procedures at the notary office.
Step 3: Register fluctuations in land use rights, ownership of assets attached to land in case of capital contribution by land use rights, ownership of assets attached to land.
Step 4: Register to change charter capital/investment capital according to the information contributed to relevant authorities.
In case of capital contribution by land use rights to establish a company, individuals/organizations shall carry out procedures within 90 days from the date of obtaining the enterprise establishment license.
In case of additional capital contribution, the charter capital of the established individual/organization shall carry out the procedures from the date of signing the capital contribution contract.
The registration agency for capital contribution to economic organizations is the land registration office at the provincial Department of Natural Resources and Environment or the agency receiving the dossier as prescribed by the People’s Committee of the province or centrally run city.
Tax provisions when contributing capital by land use rights:
- Registration fee: Free registration fee due to capital contribution by land use rights.
- Personal income tax: 2% on the transfer or sublease price. Accordingly, individuals who contribute capital by land use rights and real estate do not have to declare and pay PIT immediately. Only after one of the acts such as capital transfer, capital withdrawal, dissolution of the enterprise will this obligation be fulfilled.
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