A first-generation FDI factory in an industrial park is approaching year thirty of its land lease, while its production line was upgraded only two years ago and export orders stretch years ahead. Management is unsettled because three clocks do not agree: the sub-lease term in the contract with the infrastructure company, the project operation term in the investment registration certificate, and the term printed on the land use right certificate. The question is what rights the enterprise still holds as the land term runs out, and how early it must start preparing.
The legal framework: Article 172 of the 2024 Land Law ties the land term to the project term
The Land Law No. 31/2024/QH15, effective from 1 August 2024, provides in Article 172 that the term of land allocation or lease for an organisation implementing an investment project is considered and decided on the basis of the project operating term, ordinarily no more than fifty years; for projects with large capital but slow capital recovery, or projects in areas with difficult or especially difficult socio-economic conditions needing a longer horizon, the term may reach seventy years. When the term expires and the land user wishes to continue using the land, the State considers granting an extension, but the extension may not exceed the corresponding maximum term for that project type. The land term is therefore not a fixed immutable number but a mechanism bound tightly to the legal life of the investment project.
On the investment side, the Investment Law No. 143/2025/QH15, replacing the Investment Law No. 61/2020/QH14 and effective from 1 March 2026, governs the project operating term and the procedures for adjusting or extending it in the investment registration certificate. Practice shows the two procedures must move together: land extension is considered only while the investment project remains valid or its operating term is extended correspondingly, and extending the project term does not by itself prolong land use rights if the enterprise never files for a land extension. For land sub-leased inside an industrial park there is one more layer: a tenant sub-lease term cannot outlast the term for which the infrastructure company itself leases the whole park land from the State.
Applying the rules: why disputes flare up at the end of the term
End-of-term disputes usually grow out of three gaps. The first is between expectation and text: many enterprises assume the land will simply be renewed as before because the factory runs well, whereas extension is a matter the State considers based on project performance, current planning and compliance with land and financial law throughout the lease. A project that once fell behind schedule, owes land rent or carries an unremedied environmental violation will be examined far more closely when it seeks renewal. The second gap is between the park land term and individual sub-leases: if the whole park term is near expiry and the infrastructure company has not completed its own extension, every tenant, however punctual, must wait. The third gap concerns assets on the land: where no extension is granted, handling of workshops, fixed machinery and any compensation claim depends on the ground for termination of land use rights and on the lease or sub-lease contract terms, not on an automatic compensation right of the kind that arises in public-interest recovery under Articles 91 and 95.
Strategically, an enterprise should start building its extension file at least two to three years before expiry rather than waiting for an official notice. The most persuasive file is an unbroken evidence chain: stable operations, land financial obligations fully discharged, no progress violations, a continuing investment plan and genuine need for the land. In parallel, the legal team should re-read the lease or sub-lease for clauses on extension, priority rights and end-of-term asset handling; if the old contract is silent on these points, now is the time to negotiate an annex while bargaining power has not yet ebbed with the remaining term. Where the project operating term in the investment registration certificate is also ending, the investment adjustment file and the land extension file should be lodged together with matching requested dates.
Checklist for preparing a land use term extension
An FDI enterprise whose project land term is approaching expiry should start the following work early:
- Align the three clocks: the term on the land use right certificate, the term in the lease or sub-lease contract and the project operating term, and build a countdown calendar with an action date for each procedure.
- Audit compliance across the whole lease period: land rent, progress, environment and construction; remedy every outstanding item and file proof of completion before applying for extension.
- Prepare the land extension request under Article 172 of the 2024 Land Law with a project implementation report, a continued land use plan and the investment plan for the next phase.
- If the project operating term is also ending, file in parallel to adjust and extend it under the Investment Law No. 143/2025/QH15 and make sure both requests match in time.
- Review the end-of-term asset clauses in the lease or sub-lease; negotiate an annex on dismantling rights, asset transfer or priority to re-lease if the full area is not extended.
Frequently Asked Questions
What should we do when the project land use term expires?
The enterprise may keep using the land while a duly filed extension request is under consideration, but in principle once the term on the certificate ends without an extension decision, there is no basis for maintaining long-term operations. The step to take is filing for a land use term extension under Article 172 of the 2024 Land Law before expiry, while checking the project operating term because the two are linked. Starting only after expiry surrenders all initiative to the authorities.
Can the land use term be extended?
The law allows the State to consider an extension where the land user needs to continue using the land, under Article 172 of the 2024 Land Law, with the extension capped at the fifty-year or seventy-year ceiling for the corresponding project type. Extension is not an automatic right: the competent authority weighs project performance, fulfilment of financial and land-law obligations, and current land use planning. A clean, well-run project negotiates from a far stronger position.
What is the extension procedure?
The enterprise prepares an extension dossier filed with the natural resources and environment authority or the local one-stop shop where the land is located, including the application form, the land use right certificate, the investment registration certificate and a project implementation report. If the project operating term is also expiring, it must be extended in parallel under the Investment Law No. 143/2025/QH15. Once approved, the enterprise signs or amends the land lease contract, discharges financial obligations for the new period and registers the change on the certificate.
If no extension is granted, how are assets on the land handled?
Where no extension is granted and land use rights terminate, the enterprise must hand the land back to the State under the decision and deadline notified. Assets on the land are handled according to the termination ground and the lease or sub-lease contract: typically the enterprise may dismantle and remove workshops and equipment within the prescribed period, or transfer the assets to the next land recipient if the two sides agree. Ordinary expiry does not attract the compensation mechanism for public-interest recovery under Articles 91 and 95, so the end-of-term asset clauses in the contract are the most important text to review early.
This article has been quality-reviewed by the FLAW AI Legal Council
