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… 

 

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:

- 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:

 

Currently, there are 02 forms of renting IZ land in Da Nang: Renting land with annual payment and Renting land with one-time payment.

 

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:

- 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.

 

According to Article 10 of Land Law 2013, land is classified as follows:

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.

 

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:

File proving the investor’s capacity: 

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.

 

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: 

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.

 

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.

 

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.

 

 

8. Sample contract for industrial park land lease, industrial park land lease in Da Nang

Industrial park land lease contract form: Download here

 

9. What is the rental price of industrial park land in Da Nang?

When renting land in an industrial park, investors are required to pay fees, including land use rights rental fees and infrastructure usage fees. Below is some information regarding land rental prices in industrial parks in Da Nang.​

• Price list for land rental and infrastructure usage in Hoa Cam Industrial Park:

	PAYMENT METHOD	UNIT OF CALCULATION	UNIT PRICE (VND)	NOTE
Land rental fee	Lump-sum payment	VND/m2 / entire land lease period	2,500,000	Land lease term expires on August 8, 2054 (The above price does not include VAT)
	Annual Payment	VND/m2 / year	92,000
Industrial Park Infrastructure Usage fee	Annual income	VND/m2/year	17,200

 

• Price list for land rental and infrastructure use in Hoa Khanh Industrial Park:

	PAYMENT METHOD	UNIT PRICE (VND)	NOTE
Land rental fee	Lump-sum payment	100 USD/m2/entire land lease period	Land lease term expires on 2048 (The above price does not include VAT)
	Annual Payment	Rates are subject to the regulations of Da Nang City People's Committee
Industrial Park infrastructure Usage fee	Annual income	100 USD/m2/year

 

*The above is the reference price updated until March 2024. To get the exact price, please contact Phong & Partners for consultation and the latest prices..

In addition to the above-mentioned land use right and infrastructure usage rental fees, the investor must also pay various service fees when conducting business and production activities in the industrial park according to the service provider's price, including:

• Management fee;
• Wastetreatment fee;
• Environmental sanitation fees;
• Electricity, water, telephone, Internet usage fees;
• Other fees when Investors use other utility services in the Industrial Zone.

 

10. Where to find a lawyer for Industrial zone land lease procedures in Da Nang?

To ensure that legal issues related to land lease in industrial zones in Da Nang are handled comprehensively, finding an experienced, reputable and dedicated lawyer is not easy for Investors, especially foreign Investors and those investing in large-scale, specialized projects.

Phong & Partners Law Firm provides services guiding procedures for leasing land in industrial parks in Da Nang, including the following specific services:

• Consulting on legal processes and procedures related to industrial zone land lease.
• Analyzing and explaining legal regulations related to industrial zone land lease.
• Guiding on the specific steps and requiments for completing the land lease process.
• Instructing and introducing to investors rental locations that suit the investor's requirements, conditions, and projects.
• Drafting and editing documents related to the industrial zone land lease process.
• Drafting industrial zone land lease documents;
• Drafting and editing necessary documents, including applications, deposit contracts, official land lease contracts and other related documents.
• Carrying out administrative procedures on investment.
• Drafting documents for investment registration, business registration, and applying for licenses for conditional industries;
• Representing investor carry out legal procedures at the Industrial Park Management Board, People's Committees and other competent authorities to obtain Investment Registration Certificates, Business Registration Certificates, Environmental Licenses, Fire Prevention and Fighting Licenses, etc.
• Representing in the negotiation process.
• Participating and representing clients during negotiations with industrial zone infrastructure operators or other stakeholders.
• Supporting in negotiating and achieving favorable terms in land lease contracts, ensuring the legitimate rights and interests of investors.
• Protecting rights and resolving disputes related to industrial zone land lease.
• Participating in negotiations, mediations or legal proceedings to resolve disputes effectively and fairly.
• Representing and/or protecting the interests of clients during complaint or dispute resolution processes at state administrative agencies such as the District People's Committee, the Provincial People's Committee in Da Nang, and the Da Nang Industrial Park Management Board.
• Representing and/or protecting the rights of clients to complain and resolve issues arising from industrial zone land lease.
• Representing and/or protecting clients' interests throughout the litigation process for industrial zone land lease disputes at both trial and appellate court.

 

11. Some of Phong & Partners' clients operating in Industrial Zones

• Central Power Project Management Board – National Power Transmission Corporation
• Ha Giang Phuoc Tuong Mechanical Joint Stock Company
• Saigon Central Mechanical Joint Stock Company
• Ducksan Vina Co.,Ltd
• HAVGROUP Joint Stock Company
• Thanh Loi Investment Joint Stock Company
• Thuong Thang Dat Single-member LLC.
• Zhongdaxiang Plastic Mold Technology Co., Ltd. (Vietnam) - Chinese Investor
• Makitech Vietnam Co., Ltd. - Japanese investor
• Arena Technologies (Vietnam) Co., Ltd. - Singaporean Investor
• Intex Industries (Vietnam) Co., Ltd. - Hong Kong, China Investors

 

12. Related questions

a. List of Industrial zones in Da Nang

• ​Danang Industrial Zone

Address: An Hai Bac ward, Son Tra district, Da Nang city​

• Danang Seafood Service Industrial Zone

Address: Tho Quang ward, Son Tra district, Da Nang city​

• Hoa Cam Industrial Zone

Address: Hoa Tho Tay ward, Cam Le district, Da Nang city

• ​Hoa Khanh Industrial Zone expansion

Address: Hoa Khanh Bac ward and Hoa Hiep Nam ward, Lien Chiieu district, Da Nang city​

• Lien Chieu Industrial Zone

Address: Hoa Hiep Bac ward, Lien Chieu district, Da Nang city​

• Hoa Khanh Industrial Zone

Address: Hoa Khanh ward, Lien Chiieu district, Da Nang city​

• Thanh Vinh Industrial Zone

Address: Hoa Lien commune, Hoa Son, Hoa Vang district, Da Nang city​

• Phuoc Ly Industrial Zone

Address: Hoa Minh ward, Hoa Khanh Nam, Lien Chiieu district, Da Nang city

b. What should be considered when renting industrial zone land in Da Nang?

In addition to the usual terms in a land lease contract, when leasing industrial park land in Da Nang, investors also need to pay attention to some important contents as follows:

Note 1: Progress of State land allocation, construction progress and completion of Industrial Zone infrastructure

• Checking the progress of State land allocation, ensuring there are planning and land allocation- related issues.
• Checking the completion status of infrastructure in industrial parks such as roads, electricity, water, telecommunications, and other facilities.
• Ensuring the infrastructure is fully completed and meets the production requirements of the business.

Note 2: Production and business lines must be consistent with the planning and functions of the Industrial Zone

• Reviewing the planning and function of the industrial park to ensure that the business's industry is consistent with the area's development goals and strategies.
• Checking environmental regulations, occupational safety and support initiatives from local goverment.

Note 3: Rental fee calculation and adjustment mechanisms and other fees

• Ensuring clarity regarding the terms of the land lease agreement, including rental fees, service charges, and provisions for future price adjustments.
• Clarifying the methodology for rental fee calculation and the conditions for rental fee adjustments during the contractual term.
• Ensuring that payment terms and rental fee adjustment clauses are clearly defined to prevent potential disputes.

Note 4: Progress and procedures of obtaining Land Use Right Certificate

It is necessary to agree and clearly stipulate the progress and procedure forthe industrial park infrastructure company to carry out the necessary steps with the competent state agency to issue the Land Use Rights Certificate to the investor; additionally, clearly stipulate the responsibilities and settlement of consequences if not complied with. This is one of the important contents to ensure the rights of the Investor throughout the land lease process in the Industrial Zone.

Adhering to these considerations will help businesses to lease industrial zone land in Da Nang effectively and ensure their production and business processes.

c. Are subleases of industrial park land in Da Nang permitted?

The investor's sublease of industrial zone land in Da Nang depends on the agreement between the investor and the industrial zone infrastructure company. However, the investor has the right to lease assets on the land (factories) owned by it to other entities.

To exercise this right, the investor must comply with the regulations and conditions stipulated by the local management agency and the industrial zone infrastructure exploitation company, including adjusting the investment certificate to match the permitted business lines and complying with the planning of the industrial zone.

d. Is Investment Registration Certificate mandatory for industrial zone land lease?

According to the Investment Law, all foreign investors are required carrying out investment registration certificate (IRC) procedures before investing in Vietnam, while domestic investors are generally exempt.

However, in practice, when operating in industrial zones, both foreign and domestic investors must comply with the regulations on applying for an IRC.

This requirement is made to ensure that the business and production activities of investors are consistent with the planning and functions of the industrial zone, to ensure consistency in the management and development of the area, and to ensure transparency and fairness in the management of investment capital as well as to protect the interests of both investors and localities.

e. Is a Land Use Rights Certificate issued for land lease in an industrial zone?

Clause 1, Article 99 of the Land Law 2013 stipulates cases in which the State issues Land Use Rights Certificates, house ownership rights and other assets affixed to land, including the following cases: “e) Land users in industrial parks, industrial clusters, export processing zones, high-tech zones, economic zones;”

At the same time, Clause 3, Article 19 of Decree 43/2014/ND-CP stipulates that land lessees and sub-lessees of land users in cases where a Land Use Rights Certificate, house ownership rights and other assets affixed to land is not obtained. However, there are exceptions for cases of land lease or sub-lease from investors in construction and business of infrastructure in industrial zones, industrial clusters, export processing zones, high-tech zones and economic zones.

Thus, when leasing land in an industrial zone, the land lessee is obtained a the Land Use Rights Certificate, house ownership rights and assets affixed to the land by a competent state agency.

f. Can a business transfer the industrial zone land use right during a lease period?

In many cases, businesses can lease land for the entire usage period in an industrial zone and make a lump-sum payment for the duration. But then they do not need to use the land and seek to transfer or sublease it  another party to recoup costs or receive a benefit.

According to the provisions of Point a, Clause 3, Article 149 of the Land Law 2013, if the lessee of land from an infrastructure business enterprise has made a lump-sum payment for the entire lease term, they can also transfer the land use rights similar to the infrastructure business entity.

Thus, an enterprise has the right to transfer the right to use industrial zone land during the lease period when the enterprise leases land from an infrastructure business enterprise in the form of a one-time payment for the entire lease period.

g. Does selling mortgaged assets affixed to leased land in an industrial zone land constitute land subleasing?

Following the sale of mortgaged assets affixed to the land by a business to a buyer, the buyer may continue to lease the industrial zone land for the remaining term of the lease agreement. In this process, the relationship between the land lessor and the land lessee is formed, in which the industrial zone infrastructure company and the buyer play the main role. After the enterprise sells the mortgaged assets affixed to the land to the buyer, the buyer can continue to lease the industrial zone land for the remaining term of the lease contract. Therefore, the enterprise's sale of the mortgaged assets affixed to the land is not a form of sub-leasing by the enterprise, but in fact a form of transferring the land lease relationship to a third-party investor.

h. What are the rights and obligations of land lessees in industrial zones?

For investors who lease land with annualland rental payment, the following rights and obligations apply:

• Possessing common rights and obligations of land users;
• Mortgaging owned assets affixed to leased land at credit institutions licensed to operate in Vietnam;
• When meeting all conditions prescribed by law, the land lessee has the right to resell the owned assets affixed to the leased land;
• Contributing capital with owned assets affixed to the leased land;
• Subleasing land use rights in the form of annual land rental payment.

For investors who lease land with a lump-sum payment for the entire lease term, the following rights and obligations apply:

• Possessing common rights and obligations of land users;
• Transferring of land use rights and owned assets affixed to the land;
• Subleasing land use rights and owned assets affixed to the land during the land use term;
• Mortgaging land use rights and owned assets affixed to land at credit institutions licensed to operate in Vietnam;
• Contributing capital with land use rights and owned assets affixed to land to cooperate in production and business with organizations, individuals, overseas Vietnamese, and foreign-invested enterprises in accordance with the provisions of law;
• Donating land use rights to the State.