Content and Form of Implementation of the Right to Transfer, Contribute Capital, and Mortgage Land Use Rights

Fifth, Foreign organizations with diplomatic functions include diplomatic representative agencies, consular agencies, other representative agencies of foreign countries with diplomatic functions recognized by the Government of Vietnam; representative agencies of organizations under the United Nations, intergovernmental agencies or organizations, representative agencies of intergovernmental organizations;

Sixth, Vietnamese people residing abroad according to the provisions of the law on nationality;

Seventh, Foreign-invested enterprises include 100% foreign-invested enterprises, joint-venture enterprises, Vietnamese enterprises in which foreign investors purchase shares, merge, or acquire according to the provisions of the law on investment.

b) Land use rights

Land use rights is a concept that is very commonly used in Vietnamese land law. Land use rights are conceived in two aspects:

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- Subjective aspect: This is the power of land users in exploiting and using the useful properties of land to bring about certain material benefits. This power of land users is recognized and protected by land law. In this aspect, land use rights are conceived in legal documents, books, and newspapers as follows:

According to the Law Dictionary issued by the Institute of Legal Science - Ministry of Justice: Land use rights are the rights of subjects to exploit the utility, enjoy benefits and profits from the use of land assigned by the State, leased or transferred from other subjects through conversion, transfer, lease, sublease, inheritance, donation ... from other subjects having land use rights;

According to the Land Law Textbook of Hanoi Law University: “Land use rights are the right to exploit the useful properties of land to serve the socio-economic development goals of the country;

Thus, from a subjective perspective, land use rights are the power of organizations, households, and individuals to exploit the useful properties of land and bring them certain material benefits.

- Objective aspect: Land use rights are an important institution of land law, including a synthesis of land law norms issued by the State to regulate social relations arising in the process of land use such as relations giving rise to land use rights; relations on the implementation of powers of land use rights; relations on the protection of land use rights (resolving complaints, denunciations, disputes over land use rights);

In this respect, land use rights as a legal institution include regulations as the legal basis for the generation of land use rights; regulations on the implementation of land use rights and regulations on the settlement of complaints, denunciations and disputes over land use rights. The 2013 Land Law has devoted a whole chapter (Chapter XI - From Article 166 to Article 194) to regulate the rights and obligations of land users; including the general rights and obligations of land users and the specific rights and obligations of each group of land users [35].

c) Right of assignment

Transfer of land use rights was first mentioned in the 1993 Land Law and was further recognized in the 2013 Land Law.

- According to the Land Law Textbook of Hanoi Law University: “Transfer of land use rights is a basic form of land use right transfer. Accordingly, the land user (called the transferor of land use rights) agrees to transfer land use rights to the transferee (called the transferee of land use rights) and that person must pay the transferor of land use rights an amount of money corresponding to the value of land use rights. The transferor of land use rights is obliged to pay income tax from the transfer of land use rights” [37].

- According to the Law Dictionary: “Transfer of land use rights: (Land user) transfers land and land use rights to the transferee (called the land use right recipient) for use. The party transferring land and land use rights shall receive an amount of money equivalent to the value of land use rights according to the agreement of the parties” [38].

Land use rights transfer contributes to the formation of the real estate market in general and the land use rights market in particular in our country.

d) Mortgage by land use rights

Mortgage by land use rights is a term that first appeared when the Land Law of 1993 was promulgated. This term continued to be recognized in the Law amending and supplementing a number of articles of the Land Law of 1998; 2000; Land Law of 2003 and now the Land Law of 2013.

According to the Land Law Textbook of Hanoi Law University: "Mortgage by land use rights is understood as an agreement between the parties, according to which the borrower (mortgagor) uses his land use rights as collateral for the performance of debt repayment obligations to the lender (mortgagee)" [36].

According to the Law Dictionary: “Mortgage of land use rights: An agreement between the parties in accordance with the conditions, contents, and forms of transferring land use rights prescribed by the Civil Code and land law; accordingly, the land user uses his land use rights as collateral to ensure the performance of civil obligations” [38].

e) Right to contribute capital using land use rights

The 1993 Land Law did not have any regulations on capital contribution using land use rights value. This provision was first mentioned in the Law amending and supplementing a number of articles of the 1998 Land Law and continued to be recognized in the 2013 Land Law.

According to the Land Law Textbook of Hanoi Law University: “Contributing capital in the value of land use rights is understood as an agreement between the parties; accordingly, households and individuals with legal land use rights have the right to contribute capital in the value of land use rights to cooperate in production and business with domestic organizations, households and individuals or with Vietnamese people residing abroad” [37].

According to the Law Dictionary: “Capital contribution in the form of land use rights: An agreement between the parties in accordance with the conditions, content, and form of land use rights transfer prescribed by the Civil Code and the law on land; accordingly, land users have the right to contribute their capital in the form of land use rights to cooperate in production and business” [38].

1.1.2. Contents and forms of exercising the right to transfer, contribute capital, and mortgage land use rights

a) Transfer of land use rights

The land use rights transfer regime was born with the promulgation of the 1993 Land Law and has undergone many amendments and supplements to date; the 2013 Land Law has been enacted, and this regime continues to be implemented and increasingly improved. Land use rights transfer is a very important right of land users, which is a form of land relations in a market economy . In terms of legal nature, this is a type of land transaction through a contract, according to which the land user voluntarily terminates his rights and obligations to certain areas of land and transfers them to other land users. In terms of economics, it is the transfer of economic benefits from land from one user to another and that is a manifestation of market relations.

Land transfer at value will promote the formation of a land use rights market. This will be a decisive step towards creating synchronous elements of a market economy in our country.

The right to transfer land use rights of households and individuals in current land law can be summarized in the following basic contents:

Firstly, the law gives priority to transferring land use rights to households and individuals. The 2013 Land Law continues to inherit these provisions. However, in addition, the 2013 Land Law also adds provisions in the direction of creating conditions for Vietnamese people residing abroad to have more and more opportunities to invest in Vietnam; specifically, according to the provisions of the 2013 Land Law, Vietnamese people residing abroad who are eligible to own houses in Vietnam will be able to receive land use rights through the form of purchase, hire-purchase, inheritance, or donation of houses attached to land use rights according to current regulations, and will also be able to receive land use rights in housing development projects.

Second, the following forms of land use are eligible for land use rights transfer:

- The land for which rights are transferred is not land leased by the State with annual land rent payment.

- Land users who are using land are permitted by competent state agencies to change the land use purpose from land lease with annual land rent payment to land allocation with land use fee collection.

The transfer of land use rights must comply with the conditions specified in Clause 1, Article 188 of the 2013 Land Law, including: (i) Having a certificate (except for the case specified in Clause 3, Article 186 and the case of inheritance specified in Clause 1, Article 168 of this Law); (ii) The land is not in dispute; (iii) The land use rights are not subject to seizure to ensure enforcement of judgments; (iv) Within the land use term.

The 2013 Land Law also specifically regulates cases where households and individuals transfer land use rights under conditions (Article 192 of the 2013 Land Law). According to Article 192, for households and individuals living in the strictly protected zones and ecological restoration zones of forests

If a special-use land user wants to transfer the land use right, it can only be transferred to a household or individual living in that protected forest area, or for households and individuals of ethnic minorities using land allocated by the State under the State's support policy, the land use right can be transferred after 10 years from the date of the land allocation decision according to the Government's regulations. This regulation is both open and creates conditions for land users to exercise their rights and interests, but at the same time, there are regulations to limit acts of profiteering and land encroachment.

In summary: With the regulation allowing users to transfer land use rights, the 2013 Land Law has been overcoming limitations and at the same time adding new regulations to create a legal basis for subjects to exercise their rights and obligations.

For enterprises, the right to transfer land use rights of organizations in general and enterprises in particular was first mentioned in the 1993 Land Law. Next, the specific powers of the right to transfer land use rights were stipulated in the Law amending and supplementing a number of articles of the 1998 and 2001 Land Laws, the 2003 Land Law and most recently the 2013 Land Law. Studying the current regulations on transferring land use rights of enterprises shows that not any organization using land is allowed to transfer land use rights, the law only reserves this right for economic organizations using land, in order to meet the requirements of production and business activities of those organizations; specifically:

Firstly, economic organizations using land in one of the following forms of land use are allowed to transfer land use rights: (i) Economic organizations that are allocated land by the State with land use fees collected, or lease land with one-time land rental fees collected for the entire lease term; (ii) Economic organizations and public service organizations

(iii) Economic organizations using land due to receiving a legal transfer of land use rights, but the money paid for the transfer of land use rights does not originate from the state budget; (iv) Foreign organizations and individuals renting land and paying a one-time rent are allowed to transfer land use rights; (v) Self-financed public service organizations are leased land by the state and pay a one-time rent for the entire lease term, but the land rent paid does not originate from the state budget; (vi) Economic organizations using land are permitted by competent state agencies to change the land use purpose from land lease with annual land rent payment to land allocation with land use fee collection, but choose the form of land allocation with land use fee collection, but the land use fee paid does not originate from the state budget.

Second, in the case of a self-financed public service organization that is leased land by the State and pays the land rent once for the entire lease term, and the land rent does not originate from the State budget, the right to transfer the land use right may be exercised but must have written approval from a competent State agency; in the case of land rent originating from the State budget, the right to transfer the land use right shall not be exercised.

Third, compared to the 2003 Land Law, the 2013 Land Law has expanded the rights of foreign-invested enterprises. Specifically, the 2013 Land Law has added a provision allowing foreign-invested enterprises to receive the transfer of investment capital in the form of land use rights. This provision has created conditions for foreign-invested enterprises to have many opportunities for long-term investment cooperation in Vietnam and is also an opportunity for Vietnam to welcome large foreign investment programs and projects into the country.

Fourth, economic organizations that are allocated land by the State and pay land use fees that are paid from the State budget; economic organizations that are leased land by the State and pay annual land rent; economic organizations that lease land in industrial parks, high-tech parks, economic zones; economic organizations

People who receive land use rights transfer and the money for land use rights transfer comes from the state budget are not allowed to transfer land use rights but are only allowed to sell their own assets attached to the land.

Fifth, the transfer of land use rights of economic organizations must comply with the conditions specified in Clause 1, Article 188 of the 2013 Land Law; including: (i) Having a land use right certificate except for the case specified in Clause 3, Article 186 and the case of inheritance specified in Clause 1, Article 168 of this Law; (ii) The land is not in dispute; (iii) The land use right is not subject to seizure to ensure enforcement of judgment; (iv) Within the land use term.

b) Contribute capital by land use rights

- For households and individuals: Firstly, households and individuals using agricultural land allocated by the State within the limit; land allocated with land use fees collected; land leased by the State with one-time land rent payment for the entire lease term; land recognized by the State for land use rights; land received through conversion, transfer, donation, or inheritance;

Households and individuals change the purpose from no land use fee to land use fee or land lease

Overseas Vietnamese returning to invest in Vietnam are allocated land by the State with land use fees collected;

Vietnamese people residing abroad are leased land by the State and pay annual land rent;

Overseas Vietnamese are leased land by the State and pay land rent once for the entire lease term;

Vietnamese people residing abroad are allowed to transfer land use rights in industrial parks, high-tech parks, and economic zones;