Receiving land but leaving it idle for years, or building slower than the investment project committed — for FDI enterprises, “land sitting idle” wastes lease costs and invites administrative sanctions plus land recovery risk. Current land law strictly targets speculation and land-banking instead of putting land to use.
Penalties for leaving land unused
Decree 123/2024/ND-CP (effective 04/10/2024, replacing Decree 91/2019/ND-CP; amended by Decree 281/2026/ND-CP) provides in Article 24: failure to use annual-crop land or aquaculture land for 12 consecutive months; perennial-crop land for 18 consecutive months; forestry land for 24 consecutive months draws fines of VND 2 million to 20 million depending on area (under 0.5 ha to 01 ha and above). Remedial measures follow: mandatory land use within 60 days (annual crops, aquaculture, perennial crops) and 90 days (forestry land). Under Clause 2, Article 5, organisations pay double the individual fine.
Delayed land use in investment projects: heavier sanctions
For project land, sanctions go beyond fines. The 2024 Land Law provides for land recovery where users delay land use beyond statutory deadlines — one of the cases of recovery for land-law violations. In practice: projects allocated or leased land but still not using it past the statutory deadline, or progressing slowly without an approved extension, may have land recovered by the State without compensation for the land and attached assets. For FDI enterprises that have invested tens of millions of USD in infrastructure, this is an existential project risk — losing the land means losing the entire on-land investment.
Can deadlines be extended? How are objective difficulties handled?
The law allows extensions of land-use timelines for justified reasons — but extensions must be approved by the competent authority before expiry, not applied for after the deadline passes. Objective difficulties (natural disasters, pandemics, policy changes, site-clearance obstacles not caused by the enterprise) ground extension requests or relief — provided the enterprise proves them in writing (emergency declarations, authority documents, site minutes). The practical lesson: as soon as delay signs appear, the enterprise must proactively report in writing to the land management authority and the industrial/economic zone management board, propose remedies and request an extension — silence is the surest way to lose the land.
Frequently asked questions
1. How long can land sit unused before penalties?
Under Article 24 of Decree 123/2024: annual-crop and aquaculture land idle 12 consecutive months; perennial-crop land 18 months; forestry land 24 months — fines of VND 2–20 million (double for organisations) plus mandatory use within 60–90 days.
2. What fines apply for delayed use, and can land be recovered?
Beyond fines under Decree 123/2024, projects delaying land use past statutory deadlines may face State land recovery for land-law violations, without compensation for land and attached assets.
3. Can the land-use timeline be extended?
Yes, with justified reasons approved by the competent authority. Extensions must be sought before expiry — late applications are typically rejected and penalties still apply.
4. How to handle objective difficulties delaying land use?
Gather written proof of objective difficulties (disasters, pandemics, policy changes, clearance obstacles), proactively report in writing to the land authority and zone management board, propose remedies and request an extension.
Key takeaways for investors
- Article 24, Decree 123/2024: farmland idle 12/18/24 months brings VND 2–20 million fines and 60–90-day mandatory use orders.
- Investment projects delaying past statutory deadlines risk land recovery without compensation.
- Extensions must be sought before expiry with competent authority approval.
- Objective difficulties need written proof and proactive reporting — silence guarantees land loss.
This article has been quality-reviewed by the FLAW AI Legal Council. Content is for legal reference only and does not replace lawyer advice for specific cases.
