How long can an FDI enterprise lease land in Vietnam? When can the lease be extended and under what conditions? This article explains in detail under the Land Law 2024 (No. 31/2024/QH15, effective 1 January 2025) and the Law on Investment 2025 (No. 143/2025/QH15, effective 1 March 2026) — the two statutes that determine the “land lifecycle” of every FDI project.
1. Principle: land-lease term follows the project operation term
Point c, Clause 1, Article 172 of the Land Law 2024 provides: the term of land allocation or land lease for land-using investment projects is considered and decided according to the operation term of the investment project or the land allocation/lease application, but not exceeding 50 years.
For projects with an operation term of over 50 years under the Law on Investment, the allocation/lease term follows the project term but does not exceed 70 years.
In short: land-lease term = project operation term, capped at 50 years (70 years for special projects). To know how long land may be leased, first determine the operation term stated on the Investment Registration Certificate.
2. Project operation term under the Law on Investment 2025
Article 31 of the Law on Investment 2025 provides:
- Inside economic zones: not more than 70 years.
- Outside economic zones: not more than 50 years; may be longer but capped at 70 years for: projects in difficult/extremely difficult areas; large-capital projects with slow capital recovery; infrastructure projects in high-tech parks, high-tech industrial parks or concentrated digital-technology parks; projects eligible for special investment incentives and support.
- During implementation, investors may adjust the operation term upward or downward (Clause 4), subject to the above ceilings.
- Time lost due to the State’s late land handover is excluded from the operation term and project schedule (Clause 3) — an important basis when explaining delays.
3. Conditions for extending the land-lease term
Upon expiry, land users wishing to continue use shall be considered for extension by the State, within the ceilings of Clause 1, Article 172. In practice, extension requires “3 NOs + 1 YES”:
- NO violations: land used for the proper purpose, in compliance with land and environmental law throughout the lease.
- NO planning conflict: continued use conforms to land-use planning at the time of extension.
- NO outstanding financial obligations: land rental, taxes and other financial obligations to the State fully settled.
- YES demand + timely filing: extension is processed in the final year of the land-use term; the application must be filed no later than 6 months before expiry (Clause 3, Article 172).
4. Extension procedure: the golden timeline
Under Article 64 of Decree 102/2024/ND-CP, the dossier comprises: the extension application (Form No. 08); the land-use-right certificate or land allocation/lease decision; and the document permitting extension of the investment project’s operation term or documents evidencing the project operation term under investment law.
Key note: to extend the land lease, the investor must first obtain the extension of the project’s operation term (procedure under Article 61 of Decree 96/2026/ND-CP). The two procedures go hand in hand — completing one while forgetting the other will stall the process.
Recommended timeline:
- 12 months before: review compliance status, financial obligations and planning; prepare the project-term extension dossier.
- No later than 6 months before expiry: file the land-use extension application.
- Missed deadline (except force majeure): no extension — the competent authority will recover the land.
5. Annual rental payment or lump-sum payment?
The Land Law 2024 (Article 120) allows land lease with annual or lump-sum rental payment. The choice directly affects cash flow and lessee rights:
- Annual payment: lower upfront pressure, rent adjusted periodically; but more restrictions on transferring/mortgaging land-use rights.
- Lump-sum payment: large upfront outlay but long-term cost stability; fuller rights to transfer, mortgage or contribute land-use rights as capital.
FDI enterprises should model this carefully — lump-sum rental for 50 years is a significant capital commitment.
6. Risks of letting the lease expire
- Loss of land-use rights: no extension means State land recovery; on-land assets handled under the law.
- Project termination: expiry of the operation term without extension is a ground for investment-project termination (Article 36 of the Law on Investment 2025).
- Production disruption: an operating factory entangled in land procedures may have to suspend operations, affecting customer contracts.
7. Recommendations for FDI enterprises
- Upon receiving the IRC, record two milestones: the project operation term and the land-use term — and build them into the compliance calendar.
- Align the land-lease term with the project lifecycle; if the project may run long, plan the extension from around year 40.
- Maintain environmental, fire-safety and financial compliance — the “ticket” to extension.
For advice on land-lease and extension procedures for FDI projects, enterprises may contact us. See more in our Foreign Investment section.
Prepared and reviewed by the FLAW AI Legal Council — now submitted to the owner for approval prior to publication. This content is for reference only and does not constitute legal advice for any specific case.