Scenario: an FDI group decides to withdraw production from Vietnam and offers its factory — with 15 years of land lease left — at 20% below market rent. The discount has a reason: the lessor is in exit mode, and every risk of that exit can travel to the tenant. This article analyses the lawful exit routes, the tax–mortgage–arrears chokepoints, and a safe contract structure for the incoming tenant.
Three exit routes and the lessor’s standing on each
Route one, investment project transfer: under the Law on Investment 143/2025/QH15, an investor may transfer all or part of a project when conditions are met (the project is not in a termination case, the transferee satisfies investment conditions, related financial obligations are completed); the transferee steps into the land sub-lease with the park developer. If the FDI’s “sub-lease offer” is really a prelude to project transfer, the tenant should position itself as the prospective transferee rather than a mere lessee. Route two, project termination and liquidation: the investor decides to end the project under investment law, must complete tax obligations, liquidate assets and return the leased land under its contract with the developer — here, “sub-leasing” from it is safe only on a short horizon and with the developer’s confirmation. Route three, downsizing while keeping the project: sub-letting surplus factory space is an ordinary asset lease under Article 202 of the Land Law 31/2024/QH15 and civil law — the healthiest scenario, still requiring the developer’s consent under the head sub-lease.
Four chokepoints that break deals mid-way
The exiting party’s taxes head the list: on cessation, the tax authority finalises accounts, locks the tax code and stops invoice use in sequence — if the tenant depends on the lessor’s monthly rent invoices for cost deduction, a break in that document flow creates tax risk for the tenant itself. Second, bank mortgages: the lessor’s factory is very often collateral for its own loans; on default during exit, the bank enforces the security, and a tenant whose lease was never registered or notified to the bank has almost no standing to keep the premises. Third, arrears to the park developer: unpaid sub-lease rent and fees are why developers refuse to confirm any later transaction on the plot. Fourth, signatories and seals: exit phases come with legal-representative changes, seal withdrawals and the local team dissolving — the tenant may find no counterparty left when supplementary documents are needed.
A safe transaction structure for the incoming tenant
The governing principle: design the deal as if the lessor will vanish within 12 months. Concretely: (1) tripartite confirmation with the park developer from the start — recognising the sub-lease, confirming no arrears, and committing that the tenant may contract directly (or stay on equivalent terms) when the lessor’s lease ends through exit; (2) short payment cycles monthly or quarterly, a modest deposit, and never multi-year prepayments; (3) exit-event clauses (investment certificate revoked or surrendered, tax code locked, assets enforced, lessor dissolved) giving the tenant immediate termination, full recovery of unused money and a minimum 90–180-day relocation window for production lines; (4) an asset condition record with photos, confirming the lessor’s ownership of each leased asset; (5) for large values and long terms, consider restructuring the deal as a project transfer — a transferee’s legal standing is far stronger than that of a tenant of a disappearing lessor.
Frequently Asked Questions
An exiting FDI company transfers its land lease contract to me — what are the steps?
Five steps in an order that must not be reversed: (1) appraise the transfer conditions in the head sub-lease — prohibition or consent conditions for assignment, and whether the transferee’s business lines fit the park’s planning; (2) obtain the park developer’s written consent, with the transferee’s capacity file; (3) sign the contract assignment agreement (tripartite if the developer requires) or a new sub-lease, closing with a handover record of the site, assets and debt figures at the transfer date; (4) handle the investment-project layer: the transferee establishes a new project or adjusts the Investment Registration Certificate for operations at the location, and if the deal is a project transfer, run the project-transfer procedure under the Law on Investment 143/2025/QH15; (5) register the land and attached-asset changes into the transferee’s name at the land registration authority if the lease right was certified. Skipping step (2) is the error that lets the developer deny the whole transaction’s effect.
What are the transferor’s tax obligations (project transfer tax), and who bears them?
Tax obligations rest by law on the transferor and follow the transaction’s nature: selling assets (the land lease right, the factory) makes real-estate transfer income subject to 20% corporate income tax on separately determined income under the Law on Corporate Income Tax 67/2025/QH15; transferring capital in the project company is taxed on capital transfer income. But ‘who bears it by law’ and ‘who bears it economically’ are different questions: the purchase agreement must fix whether the price is inclusive or exclusive of the seller’s taxes, and the buyer should hold back part of the price until the transferor completes the tax settlement for the transaction — because the buyer’s practical risk is the deal stalling at registration while the seller’s tax obligations remain open, especially where the seller is winding down and dissolving its Vietnamese entity.
Do I inherit the outgoing tenant’s unpaid fees and rent arrears?
In principle, not automatically: the outgoing tenant’s financial obligations to the zone developer belong to the outgoing tenant, and so do their tax debts to the State — the incoming tenant does not become a substitute payer merely by taking over the premises. But ‘not automatically’ does not mean ‘not your problem’, for two reasons. First, the developer’s confirmation power: developers typically confirm a completed handover only once the old tenant’s balances are settled — without a tripartite balance-closing record at handover, the developer can suspend services or confirmations your operation needs to pressure payment of the old debt, and the incoming tenant is the one practically stuck. Second, voluntary assumption: if you agree to shoulder part of the old tenant’s arrears in exchange for a better price, that part must be quantified in the transfer agreement and deducted directly from the price — never accepted verbally. Standard practice: obtain the developer’s written confirmation of the old tenant’s balance status at the handover date, and lock a clause that the incoming tenant bears no liability for anything arising before that date.
Do the old project’s investment incentives transfer to me?
Two kinds of incentives must be separated. Corporate income tax incentives and incentives attached to the investment project: if the deal is structured as a proper transfer of the investment project (the new investor is approved by the investment registration authority to receive the project and the investment registration certificate is amended), the project continues to enjoy its incentives for the remaining period on the project’s conditions — incentives follow the project, not the person. Incentives and financial terms attached to the outgoing tenant’s sub-lessee position (the locked rent, the benefit of the developer’s land-rent incentive the old tenant enjoyed through pricing) do not transfer automatically: they are contents of the old tenant’s sublease, and the incoming tenant’s new sublease is negotiated afresh with the developer. In a share deal (acquiring the project company), the project entity is unchanged, so all of its incentives and obligations remain intact — in exchange, the buyer also inherits the entity’s entire historical risk. Practical conclusion: never price a deal on the assumption that ‘incentives just transfer’ — verify each incentive against the exact transaction structure you will use.
