“Can land be leased before the investment certificate is granted?” — the answer depends entirely on which “land leasing” is meant. For State land leasing: no, the lease decision cannot precede an approved investment project. For private premises serving the preparatory phase: yes, and it is standard practice for every FDI project. This article separates those two worlds and introduces the lawful land-securing tools for the waiting period.
1. State land leasing: the lease decision always follows the investment project
The land allocation and leasing bases in Article 116 of the Land Law No. 31/2024/QH15 tie leasing to an investment project already approved for policy and/or granted an investment registration certificate by the competent authority. Sequentially, therefore, there is no possibility for a provincial People’s Committee to issue a lease decision for a project without investment documents: the natural resources authority will return the file for lack of foundational legal basis. Roadmap consequence: every State-lease milestone (Article 122 demand appraisal, Article 123 decision, contract, hand-over, certificate) sits after the investment certification milestone. Some preparatory activities remain possible beforehand: site survey and measurement, planning information collection, in-principle arrangements with the provincial People’s Committee on the intended location, and site legal diligence — these create no LUR but let the land file be filed the moment the investment certificate issues. Note also: an in-principle arrangement with the locality is not a lease decision and does not guarantee the plot will not be given to another project during the wait — this risk is managed by file speed, not by paper.
2. Private premises for the preparatory phase: leasable and advisable
Leasing premises from private parties (offices, warehouses, commercial space of private developers) is an ordinary civil-commercial transaction, not a State land leasing formality, and is therefore not blocked by the certification status of a future manufacturing project. In the pre-certification phase, investors are usually present through: a representative office of the foreign investor (which may lease office space as its operating seat), an established project company whose expansion project certification is incomplete, or an authorised service company surveying and leasing premises. Private leases signed in this phase need three cautions: the signing entity must have legal presence in Vietnam at signing (a representative office may sign a lease for its own seat-serving activities); keep the term short with a termination clause tied to project milestones to avoid holding unused space; and if this premises is itself the future project site, the private lease does not convert into a State land lease right — once the project is certified, the two legal relationships remain separate and must be handled in parallel.
3. Special case: industrial-park land sublease before the project’s IRC
In industrial parks, infrastructure investors and secondary investors commonly work through principle contracts/site-reservation agreements for land subleasing before the secondary project completes investment certification — a commercially feasible mechanism because the sublessor is the infrastructure enterprise (not the State), and the official sublease is usually signed once the project is certified, with certification as a condition precedent. Similarly, for land in the Article 127 agreement channel, the investor may sign a framework agreement/principle contract on LUR acquisition with current land users, with a deposit under Article 328 of the Civil Code 2015, and effect conditions attached to project approval — the only lawful way to lock a land fund without violating land sequencing. The common feature of these tools: they create contractual rights (the right to require signing/performance once conditions are met), not land use rights — the investor may not build, and may not register rights over land, on these principle agreements alone.
4. Risks of “leasing land” too early by shortcuts
Three whispered shortcuts are all dangerous. One, signing a long-term “land lease” with households/individuals on agricultural land and building a factory awaiting regularisation: this is land use for the wrong purpose, unlicensed construction on unconverted land — risking sanctions, forced demolition and non-recognition when the official project file is made. Two, having a Vietnamese individual “lease/buy on behalf” of the project (nominee): nominee structures over land are void under civil law and create a total-loss risk of control over the plot. Three, large deposits with no refund condition tied to the investment certification milestone: if the project is not approved, a deposit under Article 328 of the Civil Code defaults to the deposit-holder where the fault is the depositor’s — deposit design must attach objective conditions (project not certified for planning/defence reasons → refund) right in the document. The through-line principle: every pre-certification land-securing step must be a conditional contractual tool with a clear end point, creating no works on the land.
Frequently asked questions
Can the land lease decision be sought “simultaneously” with the investment file to save time?
As files, the two procedures can be prepared in parallel, and many localities run interlinked “one-door” mechanisms for investment projects — the investor files and completes the land dossier while awaiting certification. But as to effect, the lease decision issues only after the investment approval/certification document exists, because that is the Article 116 legal basis. Parallel preparation is the right way to shorten the roadmap; expecting the land decision before the investment certificate is impossible.
May a representative office lease a warehouse as a distribution centre?
Not within its functions: a foreign trader’s representative office may operate only within representative and promotion functions — it may not directly conduct commercial distribution/warehousing business. Leasing an office as the representative seat is fine; operating a distribution warehouse requires an established and licensed enterprise in Vietnam. Confusing these two functions is a common error when investors use a representative office as an operating “springboard”.
Is a deposit to hold land with residents before the project exists lawful?
A deposit is a lawful civil transaction under Article 328 of the Civil Code 2015, and a deposit agreement attached to future LUR acquisition is an accepted pre-project land-securing tool — provided: the agreement content violates no prohibition (no commitment to transfer land the law does not allow transferring, no construction on land before conditions are met), and there is a clear deposit-handling mechanism if the project is not approved. The deposit document should be notarised/certified where the law requires for underlying LUR transactions, and always legally reviewed before large sums are paid.
Can an expanding FDI project (scaling up on adjacent land) lease more land before adjusting its investment certificate?
Not for the expansion part: the additional land area must sit within the project as adjusted-approved/certified (the area and location in the adjusted investment document are the demand-appraisal basis for the additional land). The correct sequence is adjusting the investment registration certificate for the expansion first or in parallel as files, then completing the supplementary lease formalities — privately securing the adjacent land during the wait can still be done with the conditional contractual tools in section 3.
This article has been quality-reviewed by the FLAW AI Legal Council