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Vietnam to amend inadequacies in Land Law

It is urgent to amend the Land Law, which has revealed obstacles hindering the business activities of enterprises, according to experts in a workshop in Hanoi.
The amendment of the Land Law should be closer to reality to serve the economy. — Photo baochinhphu.vn

The workshop was held by the Central Institute for Economic Management (CIEM), the National Assembly Economic Committee, and the Vietnam Chamber of Commerce and Industry VCCI, to collect business opinions on amendments to the 2013 Land Law. 

Dang Duc Anh, deputy director of CIEM, said it was a key law having a significant impact on the business investment environment of Vietnam, land was an essential input of production, and a land management mechanism that was transparent and efficient would enhance productivity and competitiveness.

However, he said the Land Law 2013 had gradually revealed inadequacies that hindered the business activities of enterprises, saying it was “urgent to amend the Land Law”.

To serve the amendment, the Vietnam Chamber of Commerce and Industry (VCCI) has surveyed business opinions on the matter.

Dau Anh Tuan, head of the VCCI's Legal Department, said the survey showed 50 per cent of businesses have difficulties with procedures for land and site clearance, 48 per cent have problems with systems for construction planning, and more than 40 per cent have issues with appraisal and approval procedures.

Tuan raised several significant problems such as limited access to and accumulation of land, unfeasible capital contribution with land use rights, and inadequacies in land use rights.

Land valuation and administrative procedures are too troublesome to most businesses, mainly the small and medium-size ones, accounting for more than 80 per cent of the enterprises in Vietnam, he added.

Tuan said: “VCCI has carried out many studies on the issue and found out the most conflicts related to producers of land, construction, real estate investment.”

“Enterprises do not know which procedure goes first, which procedures follow, and there is an overlap of administrative procedures of land in many agencies in Vietnam.”

Chairman of Everland Investment Joint Stock Company, Le Dinh Vinh, said: “There are overlaps and problems between the Law on Land, the Law on Housing and the Law on Investment, which causes huge waste for investors and slows the real estate market.”

A VCCI representative also said the current State land price bracket was only 20-30 per cent of the market land price in the city and about 30 to 60 per cent of the market land price in the provinces, and there was no clear and transparent land price calculation mechanism. This created a risk of disputes in compensation for site clearance.

Nguyen Quoc Hiep, chairman of GP Invest, said his firm has had a real estate project stuck in Phu Tho Province since 2008 because of “entanglement” in regulations on compensation coefficient for site clearance. 

Hiep said that as the compensation coefficient set by Phu Tho was 4-6 times lower than in neighbouring provinces, some people refused to leave their land for the project while the firm was not allowed to raise the coefficient by themselves.

Therefore, GP Invest’s project at a full scale of 50ha has stayed unfinished for 12 years, adding the slowness of the project was not the fault of the provincial government but rather the complicated legal mechanism.

Nguyen Quoc Hung, the Vietnam Bankers Association general secretary, mentioned several problems that need to be solved in the revised Land Law.

Hung said the regulations on land use regime, rights and obligations of investors/transferees in resort real estate projects were not clear enough. 

Hung also said under the law, the properties attached to land had not been recorded on the land use right certificate, so it was difficult for the bank to grant loans to businesses.

Hung proposed to add assets attached to the land on the certificate of land use rights so that the ownership of houses and other properties was attached to land in the revised law.

Tuan from VCCI said: “The amendment of the Land Law this time needs to be closer to reality, and there needs to be coordination in amending related administrative procedures to create consistency and convenience for investment procedures in the future.”

In a recent report at the 9th session of the Standing Committee of the National Assembly, Minister of Natural Resources and Environment, Tran Hong Ha, said that his ministry was completing the revised Land Law while the National Assembly would have a first session in May and a second session in October 2022. 

Source: Vietnam News

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