Buying a ready-built factory from an enterprise leasing the land is the fastest route into production — but this transaction is not “buying land with a building” as many imagine. You buy ownership of the factory (assets attached to land) and step into the land-lessee position in place of the seller, with the term and lease conditions inherited from the original lease. This article presents the transaction’s nature, the title-transfer sequence and the diligence points that decide whether the deal can complete.
1. Transaction nature: buying assets, inheriting the lease
Article 46 of the Land Law No. 31/2024/QH15 governs the sale of assets attached to State-leased land: the asset buyer is continued by the State as land lessee for the determined purpose and the remaining lease term. The seller’s foundation conditions depend on the rent-payment form: a one-off-payment lessee holds full rights to transfer assets and the leasehold under Article 33; an annual-payment lessee may sell only its own assets attached to the land under Article 34 — a buyer from an annual lessee is still continued as State land lessee for the remaining term, but all diligence must confirm the sold assets are the seller’s lawful property (a factory with registered ownership or eligible for ownership confirmation). The vital distinction: you cannot buy a “new lease term” — your land use term is the remainder of the original lease, so a cheap factory on a plot with only 8 lease years left can be an expensive deal across your project’s life.
2. Title-transfer sequence
Five standard steps: (1) diligence — check the seller’s Certificate (land use rights and factory ownership registered on the same certificate or corresponding file), the State land lease contract and land financial-obligation completion, the asset’s mortgage status, and planning/purpose fit with the buyer’s project; (2) negotiate and sign the contract for sale of assets attached to leased land — this contract is in the group of LUR/attached-asset transactions that must be notarised or certified under clause 3, Article 27 of the 2024 Land Law (save statutory exceptions); (3) perform arising financial duties: the seller’s income tax on the transfer, the buyer’s registration fee on registering asset ownership under Decree No. 10/2022/ND-CP; (4) file change registration at the land registration office: registering factory ownership to the buyer and recording the buyer as continuing land lessee; (5) re-sign/establish the land lease relation with the State authority (a new land lease contract or an inheritance annex per local natural-resources guidance) and complete handover of the factory, technical files, construction permit and the factory’s fire acceptance. If the buyer’s project requires an Investment Registration Certificate or investor adjustment, investment procedures must run before or in parallel so the land file matches the project entity.
3. Special case: factories on industrial-park subleased land
Most factories offered for sale sit on land subleased from an industrial park (IP) infrastructure investor, not directly State-leased land — and the procedure differs entirely. The relation is three-party: the buyer takes transfer of assets on the land and simultaneously must obtain the IP investor’s approval to continue subleasing that plot under a new sublease contract (or take assignment of the existing sublease if its terms allow), at the sublease rent and infrastructure fees per the park’s current price list — not automatically at the seller’s price if a new contract is signed. The IP investor may diligence the buyer on zoning-fit business lines and financial capacity; a buyer business line unfit for the functional zoning is the most common refusal reason. Therefore, for in-park deals, the infrastructure investor’s in-principle approval letter must come before any large deposit — depositing for assets without land-sublease approval is the classic way to lose a deposit unjustly.
4. Technical and documentary diligence of the factory: the often-skipped part
Unlike buying vacant land, buying a factory means buying the seller’s construction-compliance history: the construction permit and as-built file (unpermitted construction becomes the buyer’s risk when inspectors find it), fire acceptance minutes and appraisal status for the buyer’s intended industry (a factory accepted for warehousing does not thereby qualify for chemical production), the facility’s environmental file (the environmental licence attaches to the facility owner and activity — a buyer with a different activity must redo its own environmental dossier), and maintenance condition of structure and power/water systems per an independent technical inspection. On price: the purchase price should split into the construction asset price and amounts relating to the leasehold (if any rent-differential deal exists) so accounting and tax/fee duties are correct per part. One important protective clause: the seller’s warranty and indemnity for land financial obligations and construction violations arising before the handover date.
Frequently asked questions
Is a Certificate issued in the buyer’s name when buying a factory on leased land?
Yes. After change registration, the buyer is recorded with ownership of the factory and continuing-lessee status on the Certificate of land use rights and ownership of assets attached to land for that plot. The recorded term is the original lease’s remaining term, not a new term.
The seller is mortgaging the factory at a bank — can we still buy?
Only when the mortgage is dealt with: either the seller settles and releases the mortgage before notarised signing, or the three parties (buyer — seller — bank) agree a mechanism paying directly into the loan to release the mortgage simultaneously with the transfer. Never sign a notarised contract and pay while the asset remains frozen by a mortgage with no written bank release plan.
What taxes and fees does this transaction carry?
The seller bears corporate income tax (or personal income tax if an individual) on income from the asset/real-estate transfer under current tax rules; the buyer bears the registration fee when registering factory ownership under Decree No. 10/2022/ND-CP (0.5% for houses and land on the fee-calculation price per regulations) plus notarisation and change-registration charges. Parties often reallocate the economics in the price, but the statutory payer does not change by price agreement.
Must a newly-formed FDI buyer obtain an Investment Registration Certificate before buying?
If the factory purchase implements an investment project at that location, the project must be registered/approved under investment law and the Investment Registration Certificate (where issuable) should complete before or in parallel so the project entity, location and business lines match the land change registration file. Buying assets before holding project status at the location is a reversed sequence that snags at title transfer.
This article has been quality-reviewed by the FLAW AI Legal Council
