Scenario: a paint factory in the inner city receives notice that it falls into the planning-relocation class on environmental grounds. The board asks three things: what land incentives it gets on moving to an industrial park, whether money from the old land can be carried into the new land investment, and how long it has to finish moving. Factory relocation out of inner cities is a clear policy trend in large cities — and the incentive system for relocation projects is scattered across land law and each province’s own policies. This article assembles the full map.
Land incentives at the new site: the statutory part and the local part
The nationwide statutory part sits in Decree 103/2024/ND-CP: a production or business facility that must relocate under planning or for pollution treatment qualifies for 3 years of land-rent exemption after basic construction (point a, clause 3, Article 39) — on par with the incentivised-sector case. Before that, the relocating project still enjoys land-rent exemption during basic construction per the approved project, capped at 3 years from the land lease decision, like every project (clause 1, Article 39). If the new site is also in a disadvantaged socio-economic area, the enterprise cross-checks the whole of Article 39 to apply the most favourable exemption case (cases do not stack mechanically). Note the formal condition: “relocating facility” status must be proven by competent-authority documents (the relocation decision, the relocation-class list, the People’s Committee’s confirmation) — and every incentive becomes money only through the determination procedure in Article 48 of the same decree. The local part comprises support under each province’s relocation programme: equipment-moving cost support, worker support, and priority land allocation in the receiving park. This support group differs between localities and between mandatory and encouraged relocation classes, so the programme of the exact province hosting the factory must be consulted.
Cash flow from the old site: the self-financing design of relocation
Relocation policy is designed on one financial logic: land value in the inner city (where land prices are high) funds the construction of the new factory in an industrial park (where land cost is lower). The enterprise realises that value through the legal form matching the old land’s status: lump-sum State-leased land or enterprise-owned assets are handled by transferring the lease right and attached assets when eligible under the Land Law 31/2024/QH15; land under State recovery for planning implementation yields compensation and support under the approved compensation plan. Two notes make this cash flow commonly miscalculated: one, the receipt from handling the old land is taxed by the transaction’s nature (real-estate transfer income determined separately under the Law on Corporate Income Tax 67/2025/QH15) and is not automatically exempt; two, the timing of receipts at the old site and payments at the new site rarely matches — a relocation project needs its own bridge-financing plan, in which the new park sub-lease should carry a payment schedule tied to the old site’s handling progress.
Relocation schedule and the risks of moving slowly
Unlike land incentives (which have a unified statutory frame), the relocation deadline is each locality’s own decision: the provincial People’s Committee’s relocation decision fixes the completion deadline for each facility group, usually synchronised with the inner-city plot’s re-planning timeline and the receiving park’s readiness. A relocating enterprise must govern three dates in parallel: the completion deadline in the province’s decision; the end of lawful operation at the old site (operating beyond it exposes a polluting relocating facility to environmental-law sanctions and licensing restrictions); and construction and acceptance milestones at the new site so production is not interrupted. The safe strategy is negotiating a phased relocation schedule (line by line) from the moment of notice, and locking its own schedule commitments into documents with the province and the receiving park’s developer — because all relocation support is disbursed against the committed schedule, not against spontaneous actual progress.
Frequently Asked Questions
What land incentives does an inner-city factory get when relocating to an industrial park?
Three main land-incentive groups for planning-relocation projects: (1) land-rent exemption: a production or business facility that must relocate under planning or for pollution treatment qualifies for a 3-year land-rent exemption after basic construction under point a, clause 3, Article 39 of Decree 103/2024/ND-CP (plus exemption during basic construction for up to 3 years like every project), and if the new site is in a disadvantaged area or an incentivised sector, the higher exemption frames of the same Article 39 should be cross-checked; (2) support under the locality’s relocation policy: moving-cost support, worker retraining support and other support under the provincial People’s Committee’s relocation decisions for each facility group; (3) priority access to land in the receiving industrial park (land fund, procedures) under the province’s relocation programme. Verify for your own project whether its relocation decision is mandatory or encouraged — support policies for the two classes differ materially.
Can proceeds from transferring the old land be used to invest in the new land?
In principle, the value obtained from returning or transferring the land use rights and assets at the old site is the enterprise’s lawful financial source and may be used to invest at the new site — the relocation policy is designed to encourage exactly this self-financing of conversion costs. But the use must run through the correct legal forms: if the old land is State-leased, the enterprise does not ‘sell’ the land but handles it in the statutory forms (returning land with asset compensation, or transferring the lease right and assets when eligible); if the facility falls under State land recovery for planning implementation, the compensation and support under the approved plan is the main receipt. This receipt is taxed by the transaction’s nature (real-estate transfer income determined separately if it is a transfer) — the enterprise should structure the relocation cash flow with tax advice attached rather than assuming the receipt is tax-free.
What is the procedure for claiming relocation incentives?
A two-layer sequence. Old-site layer: confirm the facility is on the relocation list/class under the provincial People’s Committee’s decision; run the old-site land procedures (recovery, land return, asset compensation under the plan) and close outstanding financial obligations. New-site layer: establish or adjust the investment project at the receiving industrial park, sign the land sub-lease, then run the land-rent exemption/reduction determination procedure under Article 48 of Decree 103/2024/ND-CP with a dossier including the decision or confirmation that the facility is a planning/pollution relocation case — this is the decisive evidence for the point a, clause 3, Article 39 exemption case. Other local support (moving, labour) is filed separately under the province’s programme. Missing the relocation-class confirmation document is the most common reason a relocating project gets assessed with ordinary-project incentives.
How long does the relocation have to be completed?
There is no single relocation deadline in land law for all facilities: the completion deadline is fixed in the provincial People’s Committee’s relocation decision or policy for each wave and facility group (usually synchronised with the planning timeline and the receiving park’s readiness). The legal consequences of that date are very practical: relocation incentives and support are designed around the committed schedule — a facility relocating late past its deadline can lose the province programme’s support amounts, while still facing legal pressure at the old site (a polluting facility under a relocation class is restricted from expansion and change, and may be sanctioned under environmental law if it keeps operating against its commitments). The enterprise must take the deadline of the very wave applying to it from the province’s document, not another wave’s date.
