The industrial park land sublease is the single most important legal document of an in-park FDI project — but its nature must be understood correctly: this is a sublease with the infrastructure developer (the enterprise leased the land by the State under clause 2 of Article 202 of Land Law No. 31/2024/QH15), not a land lease with the State. The tenant’s rights are therefore limited by two layers: the Article 202 framework and the contract itself. Below are the clauses that must be present and how to negotiate each.
1. Subject matter, purpose and term
The contract must identify the plot precisely (plot number under the 1/500 detailed planning, area, boundaries), the use purpose (the specific production sector — cross-checked against the park’s admitted sector list) and the term. Under clause 4 of Article 202, the land use term of a project inside an industrial park follows the operating term of the investment project; the sublease cannot outlast the developer’s remaining head-lease term with the State. The clause must state the extension mechanism if the project’s operating term is extended, and the developer’s duty to support the extension procedure.
2. Payment form and infrastructure fees
Clause 3 of Article 202 sets a mirror rule: land the developer leases from the State on annual payment may only be sublet on annual payment; land leased on one-off payment may be sublet either one-off or annually. The contract must disclose which form applies to your plot — it determines your asset rights later. Beyond the sublease rent, the contract must itemise separately: infrastructure usage/management fees (unit price, adjustment cycle, adjustment cap), wastewater treatment fees, and utility prices under the service mechanism. The price-adjustment clause needs a clear formula and cycle; avoid unlimited “adjusted per the developer’s notice” wording.
3. Infrastructure, handover and operating conditions
The contract must describe the handover standard: graded site level, power connection point (committed capacity), water supply (flow), wastewater (the pre-treatment standard required before discharge into the common system, commonly column B of the applicable environmental technical regulation), roads and telecoms. Attach: the completion schedule for any missing infrastructure, sanctions if the developer hands over sub-standard infrastructure late, and the tenant’s rights when infrastructure fails commitments (fee reduction, suspension of corresponding payment obligations, or termination). The site handover minutes are primary evidence and must be an inseparable annex to the contract.
4. Transfer, sub-sublease and exit treatment
Three clause groups determine the liquidity of the investment: (i) the right to sell assets attached to land and assign the sublease to a third-party investor — typically conditioned on the developer’s consent and the assignee meeting the park’s sector requirements; (ii) the right to mortgage assets attached to land for financing (note: the subtenant holds no land use rights in its own name, so security can only cover the assets and contractual property rights); (iii) exit treatment: time limits for dismantling and returning the site, the developer’s buy-back option over assets, refund of deposits and unused prepayments. The contract also needs a clause for State recovery of park land or recovery of the developer’s land — allocating risk and compensation between the parties, because the tenant has no direct relationship with the State in that scenario.
Frequently asked questions
Does an IP subtenant receive a land use rights certificate?
Not for the original plot. The infrastructure developer is the certificate holder for the park land; the subtenant keeps the sublease contract and may register and be certificated for assets attached to land that it owns (the factory buildings) under the land and asset registration rules.
Is it valid for the developer to sublet on one-off payment while it leases annually from the State?
It does not fit clause 3 of Article 202: annually-leased area may only be sublet annually. To sublet on a one-off basis, the developer must first convert its State lease to one-off payment. Tenants should ask to see the developer’s land lease decision and its land lease contract with the State to verify the form.
Can the sublease term exceed the investment project’s operating term?
It has no legal meaning: under clause 4 of Article 202, the land use term of an in-park project follows the project’s operating term. If the project terminates, the basis for land use ends with it; a sublease term written longer than the project term is capped by this rule.
Must we pay infrastructure fee increases announced unilaterally mid-term?
Only within the limits of the signed contract. If the contract has an adjustment formula/cycle, increases must follow it; a clause letting the developer set new prices without a cap is a risk to eliminate in negotiation. Fee disputes follow the contract’s dispute-resolution clause, usually arbitration or court in Vietnam.
