The same site can be allocated by the State in three different ways: auction (whoever pays the highest land price), investor-selection bidding (whoever has the best dossier and plan on a score scale), or direct investor approval in statutory cases. For an FDI project, identifying the correct route is the first strategic decision — because preparing a bid dossier is an entirely different campaign from preparing auction money. This article identifies the bidding-scope projects under Article 126 of the Land Law No. 31/2024/QH15, the Bidding Law No. 22/2023/QH15 and Decree No. 115/2024/ND-CP.
1. Routing logic: why some projects bid instead of auction
The core boundary lies in the land fund’s status and the decision’s nature. LUR auctions (Article 125) apply to land the State has created into “clean land” — where price is the only remaining variable. Investor-selection bidding (Article 126) applies to projects whose land fund has not been pre-cleared by the State, or projects with composite requirements on capacity, plan and efficiency beyond land price: the State selects upfront an investor committed to advancing compensation and site-clearance money and implementing the project per the approved plan. Practical identification: if the locality’s notice is an “invitation for interest/bids to select an investor for a project” with an approved project catalogue, the investor is on the bidding route; if it is a “land use rights auction notice for a plot/land area” with a starting price, that is the auction route. Confusing the route makes the enterprise prepare the wrong dossier, budget and even expectations about the land rights received.
2. Bidding-scope projects under Article 126 and Decree 115/2024
Article 126(1) of the 2024 Land Law identifies land-using investment projects that must bid to select investors under bidding law, the central group comprising: urban-area construction investment projects; rural residential-area construction projects; and housing construction projects (commercial and housing projects per the housing/bidding catalogue) — where these projects use land funds not yet recovered and compensated by the State. Decree No. 115/2024/ND-CP (Article 4) systematises the investor-selection project catalogue into two large groups: the land-law project group (Article 4(1) — urban-area, housing and similar projects evaluated by land use efficiency), and the other-sector project group (Article 4(2) — integrated commerce/services, education, healthcare, sports, environment, energy, industrial parks/clusters and other statutory fields) where the project is in the mandatory investor-selection catalogue and is approved by the competent authority for bidding. For FDI, common projects on this route are: foreign-invested new urban areas, large commercial housing projects, mixed commercial-service complexes on uncleared land funds, and energy/infrastructure projects in the locality’s investor-selection catalogue. The final determinant is not the project’s name but the catalogue approval document and the competent authority’s invitation for interest.
3. The bidding route’s special finance: advancing compensation money
Article 126(2) of the Land Law places the winning bidder’s signature obligation: the investor advances compensation, support and resettlement money for the locality to clear the project site; the provincial People’s Committee is responsible for completing compensation and site clearance within 36 months from the statutory milestone tied to the land allocation/lease decision for the winning investor. The advance is credited against the land use fee/land rent payable under land finance rules. Consequence for FDI investors: a bidding project’s capital equation has three layers — the compensation advance (very large, spent before clean land exists), the official land money (net of the credited advance), and construction capital — plus site-clearance schedule risk outside the investor’s direct control. This is the fundamental financial difference from the auction route (land already clean, price the only variable) and the reason financial capacity is a heavily weighted bid component.
4. FDI projects outside the bidding scope, and confirming a project’s route
Many FDI projects do not take the bidding route: manufacturing projects inside industrial parks (subleasing from infrastructure investors under Article 202); projects using land via Article 127 LUR agreements; projects on clean land put to Article 125 auction; and direct investor approval cases under investment law where conditions are met (e.g. the investor already holds lawful LUR for the project, or other statutory cases). To confirm a specific project’s route, take three steps: (i) check the approved project catalogue and invitations for interest/bids on the National Bidding Network System and the province’s portal — a bidding-scope project must be in the published catalogue; (ii) reconcile the land fund’s status (cleared or not) and the locality’s planning/preliminary approval documents; (iii) seek written opinion/confirmation from the competent authority (the Department of Planning and Investment/the body assigned investor selection) where the file is in a grey zone — e.g. a complex with both an urban-area component and an independent commercial component. Early route confirmation is the cheapest investment in the project’s entire land strategy.
Frequently asked questions
Is a foreign-invested industrial park project in the investor-selection bidding scope?
It can be: industrial park infrastructure construction and business projects sit in the sector project group selected under Decree No. 115/2024/ND-CP where the locality places the project in the bidding catalogue. Distinguish this from secondary enterprises subleasing land inside an existing industrial park — those do not bid but sublease under Article 202 of the Land Law. The bidder here is the new park’s infrastructure investor, not each factory entering the park.
Are foreign investors equity-capped in investor-selection bidding as in some service sectors?
Investor-selection bidding is open to foreign investors on bidding principles, but projects in conditional sectors for foreign investors still apply that sector’s conditions (equity caps, market conditions per international commitments) at dossier evaluation and at post-win investment certification. The bid dossier must therefore show a sector-compliant ownership structure from the start — winning with a sector-invalid capital structure risks result cancellation at the contracting step.
If a project could be auctioned or bid, which route applies?
There is no investor free choice: the allocation route is decided by the competent authority in the catalogue/plan approval for the specific site and project, based on land fund status and project nature. If the site is clean land created by the State and the objective is price, the route is auction; if land is uncleared and the project needs an investor selected on capacity/plan, the route is bidding. Investors should monitor both notice types of the province to not miss the applicable access door.
Does the winning bidder receive “clean land” immediately?
Not immediately: the Article 126(2) mechanism is that the investor advances compensation money and the locality completes site clearance within the 36-month frame from the statutory milestone. The actual site hand-over schedule is therefore a variable to govern in the project contract and implementation plan — entirely unlike the auction route where land is clean before the session opens.
This article has been quality-reviewed by the FLAW AI Legal Council
