Table of contents:
- 1. What is an Industrial Zone?
- 2. Who is allowed to rent IZ land in Da Nang?
- 3. What are forms of renting IZ land in Da Nang?
- 4. Conditions for renting IZ land in Da Nang
- 5. How long is the lease term for IZ land in Da Nang?
- 6. What does the file for renting IZ land in Da Nang include?
- 7. Procedure for renting IZ land in Da Nang
Industrial Zones (IZ) in Da Nang play an important role in promoting the comprehensive economic development of the city. Many investors choose to rent IZ land in Da Nang to take advantage of geographical location, investment incentives and to help businesses easily access the market and quality labor force.
So what issues should be noted in the procedure of renting IZ land in Da Nang?
1. What is an Industrial Zone?
According to the regulation at Clause 16, Article 3 of Investment Law 2020, an IZ is a geographical area with defined boundaries, specializing in industrial production and providing services for industrial production.
IZ include various forms, including: Export Processing Zone, Supporting IZ, Ecological IZ (hereinafter collectively referred to as IZ, except for specific regulations for each form).
In addition, there are some other areas outside the IZ such as industrial clusters, high-tech zones, economic zones…
2. Who is allowed to rent IZ land in Da Nang?
Based on Article 149 of Land Law 2013, the subjects allowed to rent land in IZ are divided into two groups below.
- Group of direct investors renting land from the state (Primary investors) for the purpose of investing in infrastructure construction and business in IZ, including:
- Economic organizations;
- Foreign-invested enterprises;
- Vietnamese residing abroad.
- Group of investors subleasing land from infrastructure construction investment units (secondary investors) to carry out production and business activities according to the license granted by the competent authority, including:
- Economic organizations;
- Households, individuals, Vietnamese residing abroad;
- Foreign-invested enterprises.
Within a limited scope, this article only refers to the object of the group of secondary investors.
3. What are forms of renting IZ land in Da Nang?
Currently, there are 02 forms of renting IZ land in Da Nang: Renting land with annual payment and Renting land with one-time payment.
- For the part of land area that Development and Exploit For Infrastructure Of Industrial Zones Company rents directly from the State in the form of annual payment, the Investor can only sublease in the same form of annual payment.
- For the part of land area that Development and Exploit For Infrastructure Of Industrial Zones Company rents directly from the State in the form of one-time payment for the entire lease term, the investor can choose one of the two forms of renting IZ land above, depending on the financial capacity of the Investor and the agreement between the two parties.
4. Conditions for renting IZ land in Da Nang
To rent land in IZs, the following conditions must be strictly complied with:
- Firstly, the IZ must have clear legal status, full and correct documents as prescribed by law.
- Secondly, the investor renting IZ land must use the land/factory that is suitable for the characteristics of the IZ; must be correct with the purpose of production, business registered in the Investment Registration Certificate, Enterprise Registration Certificate, and at the same time meet the conditions of each locality and satisfy the requirements of Exploit For Infrastructure Of Industrial Zones Company , IZ management board…
- Thirdly, the investor must have financial capacity to ensure the use of land according to the project’s progress.
- Fourthly, the investor must are one of the following three subjects:
- Economic organizations, households, individuals;
- Vietnamese residing abroad;
- Foreign-invested enterprises.
- Fifthly, the investor must ensure to fully meet the conditions of construction safety, labor safety, environmental sanitation, fire prevention and fighting… during the production and business process.
5. How long is the lease term for IZ land in Da Nang?
According to Article 10 of Land Law 2013, land is classified as follows:
Non-agricultural land group includes the following types of land:
…
Non-agricultural production and business land includes industrial park land, industrial clusters, export processing zones; commercial land, services; non-agricultural production base land; land used for mineral activities; land for production of construction materials, pottery making;”
Clause 3, Article 126 of Land Law 2013 stipulates: “The term of land allocation, land lease for organizations to use for agricultural production, forestry, aquaculture, salt making; organizations, households, individuals to use for commercial purposes, services, non-agricultural production bases; organizations to implement investment projects; Vietnamese residing abroad, foreign-invested enterprises to implement investment projects in Vietnam are considered and decided based on the investment project or land allocation application, land lease but not more than 50 years.
For projects with large investment capital but slow capital recovery, investment projects in areas with difficult socio-economic conditions, areas with particularly difficult socio-economic conditions that need a longer term, the term of land allocation, land lease is not more than 70 years”.
Clause 1, Article 51 of Decree 43/2014/ND-CP, as amended and supplemented by Clause 36, Article 2 of Decree 01/2017/ND-CP, stipulates: “The term of land use in industrial parks, export processing zones, industrial clusters, craft villages according to the term of the investment project.”
Based on the above regulations, IZ land is classified as production land in the non-agricultural land group. The term of lease of industrial park land is determined according to the term of the investment project but not more than 50 years. For projects with large investment capital but slow capital recovery that need a longer term, the term of land allocation, land lease is not more than 70 years.
6. What does the file for renting IZ land in Da Nang include?
With the form of renting land directly from infrastructure exploitation companies, the file for renting IZ land in Da Nang will follow the regulations of each industrial park. Basically, it can include some documents as follows:
Land lease proposal file:
- Application for/Request to lease IZ land;
- Summary outline of the investment project into the IZ;
- Extract of cadastral map or cadastral extract of the land plot to be leased.
File proving the investor’s capacity:
- Enterprise registration certificate, establishment decision or similar documents;
- Enterprise registration certificate of economic organizations established in Vietnam (for foreign investors);
- Investment Registration Certicate of the project with the project implementation location in the IZ in Da Nang issued by the competent authority of Vietnam;
- Personal papers of the legal representative, capital contributors;
- Documents proving financial capacity, project implementation capacity of the investor.
Documents from abroad need to be consular legalized and notarized translation to be used in Vietnam to ensure accuracy and legality when submitted to the competent authority.
7. Procedure for renting IZ land in Da Nang
Depending on each IZ, there are different procedures for renting IZ land, but basically, the procedure for renting IZ land in Da Nang includes the following steps:
Step 1: Register investment in the IZ, determine the project location and sign the preliminary land lease agreement
After considering the suitability of the Project with the planning, function of the industrial park, the investor directly negotiates with the infrastructure exploitation company about the selected location to implement the investment project, the expected land area to be leased and the location of the land plot. Right after that, the Investor needs to sign the Preliminary Land Lease Agreement and deposit money to reserve the place.
Step 2: Apply for the Investment Registration Certificate, Enterprise Registration Certificate, and procedures related to business conditions
In case the project needs approval for investment policy, the IZ Management Board (a specialized agency under the Provincial People’s Committee) receives the application for the decision on investment policy from the company leasing the IZ land and prepares the application to get the appraisal opinion of the relevant state agency to carry out the procedure for deciding on the investment policy. After receiving the Decision on Investment Policy, the Management Board grants the Investment Registration Certificate to the investor. In case the project does not need approval for the investment policy, the IZ Management Board will directly review the project and grant the Investment Registration Certificate to the investor leasing land in the IZ. In case the investor has not established a business, the investor needs to carry out the procedure for business registration and other procedures related to business conditions.
Step 3: Sign the official land lease contract and receive the handover of the land
After having all the necessary licenses as prescribed, the investor and the infrastructure exploitation company sign the official Land Lease Contract, at the same time, both parties pay the land rent according to the progress and hand over the actual land.
Step 4: Grant the Land Use Right Certificate
From the date of signing the official Land Lease Contract, the IZ infrastructure exploitation company will be responsible for completing the necessary procedures, land administration documents related to subleasing land, Land Use Right Certificate. At the end of this process, the Investor will receive the Land Use Right Certificate for their leased land, which is the basis for establishing rights to the leased land as prescribed by law.
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