Land Use Rights as Capital: Checklist for Foreign Investors

Contributing Land Use Rights as Capital: A Legal Checklist for Foreign Investors

For foreign investors, accessing land use rights in Vietnam is a narrow game: the law opens only a few channels. Contributing land use rights as capital is one of the few lawful routes for a foreign-invested enterprise to hold land use rights — but also the one with the most traps if each condition is not carefully checked. This article is the 10-point checklist FLAT's lawyers use when reviewing a land-use-rights contribution deal for FDI clients.

Contents

• 1. Get the parties right: who may contribute, who may receive
• 2. Check the contributor's eligibility: is the land qualified
• 3. Land category and use form: annually-paid leased land does NOT qualify
• 4. Valuing the contributed land use rights
• 5. Drafting the capital contribution contract
• 6. Land change registration: re-issuing the certificate
• 7. Registering the charter capital increase
• 8. Mapping tax and fee obligations
• 9. Checking project deposit duties (if the land is tied to an investment project)
• 10. FDI-specific risks: 7 common traps
• FAQ
• When to work with a lawyer
• References

1. Get the parties right: who may contribute, who may receive

Why: Not everyone may receive capital contributions in land use rights. Point dd, Clause 1, Article 28 of the Land Law 2024 provides that economic organizations, including foreign-invested ones, may receive capital contributions in land use rights — one of five channels through which a foreign-invested economic organization may obtain land use rights (alongside: assignment within industrial parks/clusters/high-tech zones; assignment of investment capital representing land use right value; state allocation for housing projects; state land lease).

How: Confirm the receiving party qualifies as a foreign-invested economic organization under the Land Law 2024, and that the contributor (typically a domestic individual or organization) holds lawful land use rights with the right to contribute them. Note: a foreign-invested economic organization may not lease land directly from individual land users (per the Ministry of Agriculture and Environment's 2026 guidance) — structuring around this with a long-term "lease" instead of a contribution has no legal basis.

Basis: Article 28, Land Law 2024.

2. Check the contributor's eligibility: is the land qualified

Why: Land use rights may only be contributed where the land user holds a certificate (or is eligible for one) and satisfies the conditions for exercising land user rights.

How: Review: (a) a valid land use right certificate with correct parcel data; (b) no disputes (check with the commune-level People's Committee and the Land Registration Office); (c) the rights are not distrained for judgment enforcement; (d) the land use term has not expired. Any failure here can void the contribution contract or block registration.

Basis: Article 45, Land Law 2024.

3. Land category and use form: annually-paid leased land does NOT qualify

Why: The most common trap. Only land use rights the law permits to be transferred or contributed qualify — in practice, land allocated with land use fees paid or land leased with a one-off payment for the entire term. Annually-paid leased land does not qualify for capital contribution.

How: Read the certificate and the allocation/lease decision carefully to identify the land use form and financial obligations performed. If it is annually-paid leased land, the contribution cannot proceed — restructure instead (e.g., convert to one-off lease payment if eligible, or contribute other assets).

Basis: Articles 28 and 45, Land Law 2024.

4. Valuing the contributed land use rights

Why: The contributed value determines ownership ratios and recorded charter capital, and is the basis for tax. Overvaluation inflates phantom capital; undervaluation risks tax re-assessment.

How: Under Article 36 of the Law on Enterprises 2020, contributed assets must be valued by consensus of founding members/shareholders or by a professional valuation organization. For high-value land use rights, engage an independent valuer and obtain a valuation certificate — it protects all parties and supports dealings with the tax authority. Record the value in the contribution contract and the contribution minutes.

Basis: Articles 35 and 36, Law on Enterprises 2020.

5. Drafting the capital contribution contract

Why: The contribution contract is the foundation of the entire deal; missing key clauses makes later disputes very hard to resolve.

How: At a minimum the contract must cover: parcel details (parcel number, map sheet, area, purpose, term); the contributed value and valuation method; the corresponding capital ratio; the timing of rights transfer; the contributor's warranties on the land's legal status (no dispute, no distraint, valid term); cooperation duties for change registration; allocation of tax and fee obligations; penalties and damages; dispute resolution. Notarization is recommended.

6. Land change registration: re-issuing the certificate

Why: A land contribution is only legally complete once the change is registered and the certificate is re-issued in the receiving enterprise's name. Before that, the enterprise is not the lawful land user.

How: File the change dossier with the Land Registration Office where the land sits: contribution contract, original certificate, parties' legal documents. Track processing and collect the re-issued certificate. Dossier details vary by locality — check with the local office first to avoid repeated supplements.

Basis: Land Law 2024 (land registration, change registration).

7. Registering the charter capital increase

Why: Receiving an asset contribution increases charter capital — the enterprise must register the change of enterprise registration contents. Late registration risks administrative penalties.

How: Prepare the dossier (application for change per Form No. 12 under Circular 121/2026/TT-BTC, owner/board/shareholders' resolution, contribution minutes, valuation certificate) and file with the provincial business registration authority within the statutory deadline after the contribution is completed.

Basis: Articles 30–31, Law on Enterprises 2020; Circular 121/2026/TT-BTC.

8. Mapping tax and fee obligations

Why: Contributing land use rights does not mean "no tax". The contributor may incur income tax (personal or corporate) on the transfer, and the change registration triggers registration fees.

How: Before signing, have a tax adviser compute: the contributor's income tax, registration fees on re-issuance, and any outstanding land financial obligations (unpaid land use fees, rentals). Allocate each item in the contract. No specific rates are stated here as they vary by case — compute on the actual dossier.

9. Checking project deposit duties (if the land is tied to an investment project)

Why: If the land is tied to an investment project proposing state land allocation/lease or purpose conversion, the investor must also make a project implementation deposit under Article 30 of the Law on Investment 2025 (effective 01/3/2026) — a deposit or bank guarantee thereof, except in five excluded cases.

How: Determine whether the project falls within the deposit scope; verify the deposit/guarantee made; reconcile capital contribution and mobilization progress against the timeline in the investment policy approval or investment registration certificate. Delays can lead to deposit forfeiture or project termination — directly eroding the contributed land's value.

Basis: Article 30, Law on Investment 2025.

10. FDI-specific risks: 7 common traps

1. Using a long-term "lease" with an individual to bypass the rules — no legal basis; foreign-invested organizations may not lease land from individual users.
2. Contributing annually-paid leased land — ineligible; the change registration will be refused.
3. Land without a certificate or under dispute — fails Article 45, Land Law 2024 conditions.
4. Verbal agreed valuation, no certificate — exposure at tax finalization and in shareholder disputes over ratios.
5. Forgetting the charter capital change registration — administrative penalties and mismatched corporate records.
6. Not pre-computing the contributor's tax — disputes over who bears tax after the title has transferred.
7. Ignoring the project deposit duty — project termination wipes out the contributed land value with it.

FAQ

The full FAQ (5 Q&A pairs on eligibility, annually-paid land, valuation, tax, and certificate re-issuance) is in this article's `faq_items` frontmatter.

When to work with a lawyer

Work with a lawyer when: structuring a deal for a foreign investor to lawfully access land use rights; conducting legal due diligence on the parcel before contribution (planning, disputes, financial obligations); drafting the contribution contract and valuing assets; or when disputes have arisen over ownership ratios or post-contribution tax. FLAT Law Firm supports investors in every asset-contribution deal — contact our hotline 0988424851 for a tailored plan.

References

• Land Law 2024 (No. 31/2024/QH15), effective 01/8/2024 — Article 28 (receiving land use rights), Article 45 (conditions for exercising land user rights).
• Law on Enterprises 2020 (No. 59/2020/QH14), effective 01/1/2021 — Article 35 (contributed assets), Article 36 (valuation of contributed assets).
• Law on Investment 2025 (No. 143/2025/QH15), effective 01/3/2026 — Article 30 (project implementation assurance).
• Circular 121/2026/TT-BTC (21/8/2026) — enterprise registration forms (Form No. 12: change of enterprise registration contents).
• Ministry of Agriculture and Environment guidance on channels for foreign-invested enterprises to obtain land use rights (2026).
• Cross-checked via thuvienphapluat.vn and the Official Gazette at the time of writing (28/9/2026).

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