An FDI enterprise subleasing land inside an industrial park typically pays two amounts: prepaid land rent (for the lease period) and infrastructure/management fees (annual or lump-sum). Upon early liquidation these are treated very differently — and the answer lies in the sublease contract, not in general legislation.
Distinguishing the two payments
Prepaid land rent for the unused period: in principle this was paid without the corresponding service being enjoyed, so there are grounds to claim a pro-rata refund on liquidation — unless the contract provides otherwise. Infrastructure, management and service fees: these pay for services already being provided (power, water, wastewater treatment, security, maintenance) — the used portion is non-refundable; only amounts collected in advance for the unused period may be negotiable. In practice, infrastructure developers rarely refund management fees voluntarily absent a clear contractual clause.
Legal framework
Industrial park subleasing is a civil relationship between the enterprise and the infrastructure developer, governed by the 2015 Civil Code on contracts and contract liquidation: parties liquidate as agreed, and a party unilaterally terminating in breach compensates damages. Decree 35/2022/ND-CP on industrial and economic zone management sets the framework for developers but does not dictate fee refunds — the contract decides.
Investor lesson
A 30-year lawyer experience: liquidation clauses must be negotiated when the contract is signed, while the enterprise still has bargaining power. Spell out: (1) the formula for refunding rent pro-rata to unused time; (2) whether infrastructure/management fees for the unused period are refundable and how calculated; (3) refund deadlines and late-refund sanctions; (4) liquidation minutes and site handover. The more detailed the contract, the fewer disputes on exit.
Frequently asked questions
1. Is prepaid land rent in an industrial park refundable on early liquidation?
There are grounds to claim a pro-rata refund for the unused period, as the service was paid for but not enjoyed. The exact amount depends on the sublease liquidation clauses — check them first.
2. Management fees paid for a full year but only 3 months used?
The 3 used months are non-refundable. The 9 unused months may be negotiable if the contract provides; if the contract is silent, recovery prospects are low.
3. What if the infrastructure developer refuses any refund?
Negotiate first on the contract basis. If the contract contains refund clauses the other party ignores, the enterprise may sue civilly for recovery and damages under the 2015 Civil Code.
4. What should we negotiate when signing a park lease for an easy future exit?
Pre-negotiate liquidation terms: the pro-rata rent refund formula, treatment of infrastructure/management fees, refund deadlines, late-refund penalties, and handover procedures. Never read the contract for the first time when exiting.
Key takeaways for investors
- Prepaid rent and infrastructure fees are different payments — refunded differently.
- Refunds inside parks are decided by the sublease contract, not by general legislation.
- Negotiate liquidation clauses at signing, not at exit.
- Service fees for time already used are in principle non-refundable.
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.
