“State land leasing procedure” for a foreign investor is not a single formality but a chain of linked decisions: the investment project must exist first, land demand must be appraised, only then is the lease decision issued, followed by the contract, rent and the LUR certificate. Understanding this order helps investors build a roadmap that does not stall at intermediate gates. This article presents the full chain under the Land Law No. 31/2024/QH15 and Decree No. 102/2024/ND-CP.
1. The opening condition: investment project and lease bases
The State leases land only for a specific project. Article 116 of the 2024 Land Law prescribes the bases for land allocation, leasing and purpose conversion permission — for investment projects, the central basis is the project’s investment policy approval/investment certificate document (or project approval decision under corresponding law) together with the district-level annual land use plan where the land sits, for statutory cases. For foreign investors, the project implementer is a foreign-invested economic organisation — a land user under Article 4 of the Land Law. On form: foreign-invested organisations are mainly leased land by the State (one-off or annual payment); allocation with land use fee is open only in statutory cases (typically housing projects for sale or sale combined with leasing). This is a structural difference from domestic investors that many foreign files wrongly assume from the project-preparation step.
2. Land-use demand appraisal and identifying the land-access method
Before the lease decision, Article 122 of the 2024 Land Law requires land-use demand appraisal for projects in the appraisal scope: the natural resources authority appraises the land demand’s fit with planning, project scale, investor capacity and corresponding environmental and defence-security conditions. In parallel, the file must identify which land-access method group the project falls in: (i) LUR auction where the State allocates with fee/leases one-off on cleared land under Article 125; (ii) investor-selection bidding for projects in the bidding scope under Article 126; (iii) allocation/lease without auction or bidding under Article 124 (statutory cases: specially incentivised projects, projects in hi-tech zones/economic zones under their own mechanisms, projects via Article 127 land-rights agreements, etc.). Misidentifying the method group is the most common reason files are returned at this step — especially for projects on land with lawful current users where the investor keeps filing for direct leasing.
3. The main step chain: from approval to lease decision
The practical sequence under Decree No. 102/2024/ND-CP comprises linked steps: (1) the investor completes investment formalities (investment policy approval and/or investment registration certificate under the Investment Law) for the project tied to the intended site; (2) prepare and file the land lease application at the province’s receiving body (public administration service centre/natural resources authority) with components on the project, land-use demand, and compensation — support — resettlement plan if the project requires land recovery; (3) the natural resources authority organises demand appraisal, field inspection and inter-agency consultation, and submits to the provincial People’s Committee for decision; (4) the provincial People’s Committee issues the land lease decision (stating area, location, purpose, term, rent-payment form); (5) the finance/tax authority determines land rent and financial obligations (per the land price table/specific prices under Decree No. 103/2024/ND-CP), and the investor pays rent and related fees; (6) the land lease contract is signed between the authorised body and the investor; (7) the land is handed over on site with boundary markers; (8) the LUR and attached-asset ownership certificate is issued to the investor. Each step has an administrative time limit under local rules; total actual time depends most on whether the project requires land recovery and site clearance.
4. Variations that change the route, and common errors
Three variations investors should identify early. One, projects inside industrial parks/economic zones: the investor does not complete State-lease formalities with the provincial People’s Committee but subleases from the infrastructure investor under the Article 202 mechanism (industrial parks) or the economic-zone mechanism — a much leaner file because the land is already “clean” with a decision held by the infrastructure investor. Two, projects requiring land recovery: compensation and clearance steps insert between appraisal and the lease decision, and the project-bidding mechanism (Article 126) carries local clearance-progress commitments. Three, projects using land via Article 127 agreements: the investor self-negotiates with land users first; the State file then comprises only purpose conversion (if any) and change registration — there is no lease decision in this case. Common errors: filing the land application before the investment project is approved (missing the Article 116 basis); choosing a rent-payment form mismatched with transaction rights needed later; and letting the area/location in the land file diverge from the investment file — every small divergence must be amended synchronously in both files.
Frequently asked questions
Are foreign investors allocated land with a fee, or only leased?
Mainly leased. Under the 2024 Land Law’s structure, a foreign-invested economic organisation is leased land by the State (one-off or annual payment) to implement projects; allocation with land use fee applies only in statutory cases, typically investment projects building housing for sale or for sale combined with leasing. Project files should therefore be designed on a lease basis from the start, unless squarely in an exception group.
From when is the land lease term counted?
Under Article 172 of the 2024 Land Law, the lease term runs from the date of the competent authority’s land lease decision — not from contract signing or on-site hand-over. Practical consequence: the gap between decision and hand-over (usually due to site clearance or financial-obligation completion) “eats into” the project term; investors should press the post-decision steps and negotiate a clear hand-over milestone in the file.
Can land formalities start before the investment registration certificate?
Not at the decision step: the Article 116 lease basis attaches to an approved/certified investment project. Investors may do preparatory work (surveys, in-principle arrangements with the locality, project-file preparation), but the lease decision issues only once the investment project has its corresponding legal document. Leasing private premises (warehouses, offices) for preparatory activities does not pass through State land leasing formalities and is not blocked by this condition.
How is land rent determined after the lease decision?
Land rent is determined by the competent authority under Decree No. 103/2024/ND-CP: for one-off leases, the unit rent is set on specific land prices under the Article 158 valuation methods; for annual-payment leases, the unit price is a percentage of the land price in the price table/specific price as applicable, and is stabilised on the prescribed adjustment cycle. The investor pays rent together with any required advance and fees before signing the contract and receiving hand-over.
This article has been quality-reviewed by the FLAW AI Legal Council
