Acquiring an operating FDI project has two legally fundamental routes from a land perspective: buying capital in the project company (land does not change holder) or buying assets/the project (land use rights and attached assets move to the buyer’s entity). This article focuses on the second route — receiving assets on leased land in a project acquisition — where land, investment and tax issues intersect most complexly.
1. Two acquisition structures with opposite land consequences
In a share deal, the project company keeps its legal personality: land use rights, the land lease/sublease and all company-attached licences do not change holder — the buyer only changes capital ownership, so no land change registration arises and no title registration fee on land, but the buyer inherits the company’s entire obligation and risk history (tax debts, past land/construction violations). In an asset deal or investment project transfer, land use rights and attached assets must be re-registered to the recipient — triggering full land procedures (transfer conditions by rent-payment form under Articles 33/34 of the Land Law No. 31/2024/QH15, notarisation, change registration, registration fee) and project-transfer procedures under investment law: the transferring investor must meet statutory conditions (completed land financial obligations, the project not in a terminated state) and the recipient must qualify to continue the project. Structure choice therefore turns on three variables: whether the project’s land form permits transfer, how much history risk the buyer will inherit, and each structure’s tax cost.
2. Land conditions decide whether an asset deal is feasible
The first check of any asset deal is the target project’s land form: if the project leases land with one-off payment (or subleases in an industrial park with corresponding rights), the land use rights/sublease rights are transferable to an eligible recipient and the deal proceeds through ordinary steps. If the project leases State land with annual payment, the transferor has no land use rights to transfer — only assets attached to land can be sold under the Article 46 Land Law mechanism (the asset buyer is continued by the State as lessee for the remaining term), and the “project” part is handled via the corresponding investment-project transfer procedures; the document structure must therefore split two layers: an asset sale contract for assets on land, and the project-transfer file/new project establishment of the recipient at that location. If the project sits in an industrial park, add the infrastructure investor’s consent for the recipient to continue subleasing and to meet the zoning’s business-line conditions. If any layer fails, the deal must revert to a share deal or stop — which is why land diligence must precede deal pricing.
3. Sequence of a land-attached asset deal
A six-step sequence in dependency order: (1) overall diligence — land legality (Certificate, payment form, remaining term, mortgages), project legality (Investment Registration Certificate, project implementation status and financial obligations), construction/environment/fire compliance of assets; (2) structuring and signing — a framework project/asset transfer agreement with conditions precedent (investment registration authority approval of project transfer where required, IP investor consent, mortgage release); (3) investment procedures — the recipient registers a new investment project or receives the project transfer under the Law on Investment No. 143/2025/QH15 to become the project’s investor at the location; (4) notarisation of the LUR/asset transfer contract (in the must-notarise group under clause 3, Article 27 of the 2024 Land Law) and performance of tax and fee duties; (5) land change registration to the recipient and re-signing of the land lease/sublease relation; (6) operational handover — the facility’s environmental file is redone/adjusted for the new facility owner, and activity sub-licences are reviewed one by one because not every licence “follows” the assets. Steps (3) and (5) are the two most common timeline bottlenecks; the closing schedule must leave margin for both rather than assuming they run fully in parallel.
4. Tax and risk allocation in the transaction documents
On tax, an asset deal usually generates: the transferor’s corporate income tax on income from project/real-estate transfer under current rules (with withholding/declaration mechanics for foreign transferors per the foreign-investor transfer rules), value added tax on the goods/equipment component transferred alongside (separated from the LUR component, which is outside VAT scope as prescribed), and the recipient’s registration fee on registering assets/land. Unlike a share deal — where capital-transfer tax concentrates on the capital seller — an asset deal spreads duties across component transactions, so the contract needs clear tax clauses per component. On risk: the asset-deal recipient is “cleansed” of most of the seller’s history (not inheriting debts beyond obligations attached directly to land and assets, such as unfinished land financial obligations and construction/environment violation remediation attached to the facility) — but those asset-attached obligations are exactly what must be diligenced deepest, because they follow the land regardless of the parties’ contractual allocation (the State claims from the current land holder; the buyer only has recourse against the seller under indemnity).
Frequently asked questions
Does a share-deal acquisition require any land notification?
No land change registration arises because the land user does not change. However, the investor change in the project may require Investment Registration Certificate adjustment procedures and — for foreign investors buying capital in controlled sectors/locations — capital-purchase approval procedures under investment law before execution. The seller’s capital-transfer tax still arises normally.
The target project owes land rent — must the asset-deal recipient bear it?
Toward the State, land financial obligations attach to the plot and the land user: when the recipient registers the change and becomes land user, the project’s unfinished land obligations usually must be settled completely as part of transaction completion (in practice the registration authority requires confirmation of financial-obligation completion before transfer). Between the parties, this debt is allocated by price and indemnity clauses — but no inter-party agreement can stop the State from requiring settlement before permitting registration.
Do the plant’s environmental licence and fire acceptance transfer with the assets?
Fire acceptance attaches to the work and its appraised design, so in principle it follows the assets (the recipient continues using on the existing acceptance file, unless function/design changes). The environmental licence attaches to the facility’s organisation and activity: when the facility owner changes, the recipient must perform adjustment/re-issuance procedures under environmental management rules. Transaction diligence must list each licence and handle each individually, never assuming automatic transfer.
Does an asset deal lose the project’s investment incentives?
Possibly: investment incentives attach to the project and to an investor meeting conditions at grant time; on project transfer, the recipient continues remaining incentives if it meets those incentives’ conditions and follows transfer/adjustment procedures under investment law. Location/sector incentives usually persist because they attach to the project, while incentives tied to specific entity conditions need reassessment — a mandatory diligence item before deal pricing, because losing incentives fundamentally changes project economics.
This article has been quality-reviewed by the FLAW AI Legal Council