Land Use Rights of Foreign-Invested Economic Organizations in Vietnam

supplementing and amending a number of articles of the Land Law (1998 and 2001); during the implementation process, in order to be suitable for the general development of society, there have been guidelines, policies, and solutions for each time, each period, and each locality through Resolutions and Directives of the Party and the State. Overall, these are fragmented solutions, focusing on responding to the situation, or if they have a large and fundamental long-term direction, they lack specificity. Therefore, there are two policy-forming corridors (which are also just one), which are the corridor according to the Resolution of the Party and the corridor according to the specific direction of the State. There are cases where these two corridors do not match each other, are not synchronized with each other, causing problems in the practical application of policies, while land relations are very sensitive and urgent because they affect the immediate and personal interests of the people.

Since the 6th Party Congress (1986), on the basis of the 1980 Constitution and then the 1992 Constitution, new ideas on the land policy of our State have been shown to be partly effective and gradually consistent with the socio-economic development processes. In essence, land is still owned by the entire people and managed by the State, but the institutionalization of state ownership has been gradually perfected by determining that, along with the long-term stable use of land, farmers also have the right to convert, transfer, lease, sublease, inherit land use rights, mortgage (guarantee) and contribute capital to joint ventures using the value of land use rights and these rights of theirs are protected by the State. The land collectivization regime ended because it did not create the right and responsibility to truly own land use rights in real life.

- Rights of land users according to the provisions of land law: Land Law 1993 and the Laws amending and supplementing a number of articles in 1998, 2001 (hereinafter referred to as "Land Law") have stipulated on

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more specifically the rights of land users on the basis of Article 3, which are: conversion, transfer, lease, sublease, inheritance of land use rights and mortgage, guarantee, capital contribution with the value of leased land use rights together with assets owned by them attached to the leased land during the lease term for production and business cooperation according to the provisions of law. At the same time as determining the land user, method of land allocation, purpose and duration of use of each type of land, the law stipulates the rights and obligations of land users in general as follows:

+ The rights and obligations of households and individuals in land use are stipulated in Articles 73 to 78a of the Land Law;

+ The rights and obligations of domestic organizations that are allocated or leased land by the State are also stipulated in Articles 78b, c, d, e, g of the Land Law;

+ The rights and obligations of foreign organizations and individuals are specified in detail in the Ordinance on Rights and Obligations of Foreign Organizations and Individuals Leasing Land in Vietnam (September 14, 1994), Decree No. 11/CP, January 24, 1995; and the Law on Foreign Investment in Vietnam and its implementing documents [18].

It can be said that the rights of land users stipulated in the Land Law have reached a high level, overcoming the contradiction of separating ownership rights from usage rights, and farmers will hardly care much about whether the land is still owned by the whole people, managed by the state, or is their "private property". Farmers only know that they have the right to use and exploit that land to live long-term, very long-term, possibly even for their children, grandchildren, and great-grandchildren if their children, grandchildren, and great-grandchildren are still farmers and friends with the land. When they have legal land use rights, they are protected by the State for their legal rights and interests and are allowed to exercise specific rights in accordance with the purposes of the land assigned.

With these rights, farmers feel that they have almost complete ownership of the land they have been assigned, and not only that, they are also protected by the right to use the land for a long time, and no one has the right to arbitrarily encroach or violate the land they have been assigned. In reality, no country allows land relations in society to develop spontaneously. Every state has regulations on rights and responsibilities regarding land used for all purposes, not just agricultural land. It is not completely free to buy, sell, lease, inherit, convert, or mortgage private land or public land. Sometimes there is the right to own land as private property, but the exchange, purchase, sale, and use are bound by other strict regulations, primarily tax and price policies, and in the end, that ownership is sometimes cheapened and loses its essence compared to other assets.

Thus, it can be understood that land ownership and land use rights are two different rights. However, in terms of essence and motivation for creating material wealth, only land use rights are the decisive factor. "Land must be directly cared for and exploited by the workers themselves." Therefore, if there are favorable and effective policies for creating land use rights, the seemingly inherent contradiction can still be overcome or minimized.

1.2. Land use rights of foreign-invested economic organizations in Vietnam

1.2.1. Land use rights of economic organizations

The 1992 Constitution of the Socialist Republic of Vietnam stipulates that “The State allocates land to organizations and individuals for long-term stable use” (Article 18). The Land Law has detailed this provision: “The State allocates land to economic organizations,... for long-term stable use in the form of land allocation without payment and land allocation with land use fee collection. “The State also leases land to organizations,...” (Article 1). Economic organizations , which are allocated land by the State, lease land to

use for specific purposes, when fully performing obligations as prescribed by law, they also enjoy the rights to use that land. The law stipulates that the land use rights of economic organizations depend on the form of land allocation or land lease and on the financial structure of receiving land for use according to the leased or assigned purpose [30-Law No. 10/1998/QH10, Article 78 (b2,c,d,e)], specifically as follows:

(i) Economic organizations that are allocated land by the State without collecting land use fees for the purpose of agricultural production, forestry, aquaculture, and salt production : are allowed to mortgage their assets attached to the land use rights at Vietnamese credit institutions to borrow capital for production and business; are allowed to contribute capital in the form of land use rights value to domestic organizations and individuals, foreign organizations and individuals to continue using the land for the purpose of agricultural production, forestry, aquaculture, salt production, expanding the processing industry, and services to develop production according to Government regulations (Article 78b-k2).

(ii) Economic organizations that are allocated land by the State with land use fees collected have general rights according to Article 78c of the Land Law and Decree No. 04/2000/ND-CP (February 11, 2000) and have the following land use rights:

+ Transfer of land use rights attached to architectural works and infrastructure built on that land;

+ Leasing land use rights attached to architectural works and infrastructure built on that land;

+ Mortgage the value of land use rights at Vietnamese credit institutions to borrow capital for production and business according to the provisions of law;

+ Contribute capital in the form of land use rights value along with assets owned by oneself attached to that land to cooperate in production and business with domestic organizations and individuals, foreign organizations and individuals according to the provisions of law.

These rights are specified in each specific case as follows:

- Economic organizations that are leased land by the State and pay annual land rent have the right to: (a) mortgage their own assets attached to the leased land at Vietnamese credit institutions to borrow capital for production and business according to the provisions of law; (b) transfer their own assets attached to the leased land; the recipient of the assets is allowed to continue leasing land by the State and has the rights prescribed in this account; (c) for state-owned enterprises, have the right to contribute capital using the value of the leased land use right to cooperate in production and business with domestic organizations and individuals, foreign organizations and individuals according to the provisions of the Government (Article 78d-k1).

- Economic organizations that are leased land by the State and have paid the land rent for the entire lease term have the right to: (a) mortgage the value of the land use right and their own assets attached to the leased land during the lease term at a Vietnamese credit institution to borrow capital for production and business in accordance with the provisions of law; (b) transfer the leased land use right together with their own assets attached to the leased land during the lease term in accordance with the provisions of law. The transferee of the land use right has the rights specified in this account; (c) contribute capital using the value of the leased land use right during the lease term together with their own assets attached to the leased land to cooperate in production and business with domestic organizations and individuals, foreign organizations and individuals in accordance with the provisions of law; (d) sublease the land use right during the lease term. Sublease can only be carried out when the land has been invested in according to the project and the sublessee must use the land for the correct purpose (Article 78d-k2).

- An economic organization that has been leased land by the State and has paid land rent in advance for many years , if the remaining paid land lease term is at least 5 years, has the same rights as an economic organization that has been leased land by the State and has paid land rent for the entire lease term as prescribed in Article 78d-k2, mentioned in the above section (Article 78d-k3).

(iii) Economic organizations that have legally received the transfer of land use rights from others or have been allocated land by the State with payment that does not originate from the State budget are not required to switch to land lease and have the rights specified in Article 78c. In the case of receiving the transfer of agricultural and forestry land use rights accompanied by a change in land use purpose permitted by a competent State agency, the land use term is calculated according to the term of the investment project approved by a competent State agency but not exceeding 50 years (Article 78e) and do not have to prepare a State land lease dossier.

(iv) Vietnamese private economic organizations are allowed to cooperate in investment with foreign investors in the fields and conditions prescribed by the Government [18

- Article 3, Law on Foreign Investment amended and supplemented in June 2000].

1.2.2. Land use rights of foreign-invested economic organizations in Vietnam

According to the provisions of the Enterprise Law (1999), an economic organization with its own name, assets, stable transaction office, registered business... is an enterprise (Article 3). An economic organization with foreign investment capital is an enterprise with foreign investment capital . An enterprise with foreign investment capital is established and operates according to the provisions of the law on foreign investment. During its operation, an enterprise with foreign investment capital is not allowed to reduce its legal capital. The term of operation of an enterprise with foreign investment capital is stated in the Investment License for each project according to the regulations of the Government. Based on the regulations of the Committee

The Standing Committee of the National Assembly and the Government shall decide on a longer term for each project, but not exceeding 70 years [18 - Article 16, 17, Law on Foreign Investment in Vietnam]. When a foreign-invested enterprise ceases operations, the parties to the business contract must liquidate assets and terminate the contract. Foreign-invested enterprises, according to Article 2-K6, 7, 8, Law on Foreign Investment in Vietnam, include joint venture enterprises and 100% foreign-invested enterprises :

A joint venture enterprise is an enterprise established in Vietnam by two or more parties in cooperation on the basis of a Joint Venture Contract signed by two or more parties to conduct investment and business in Vietnam. In special cases, a joint venture enterprise may be established on the basis of an Agreement signed between the Government of Vietnam and the Government of another country. A joint venture enterprise may cooperate with a foreign investor or a Vietnamese enterprise to establish a new joint venture enterprise in Vietnam. A joint venture enterprise is established in the form of a limited liability company. Each party to the joint venture is responsible within the scope of the capital committed to contribute to the legal capital of the enterprise. A joint venture enterprise has legal entity status under Vietnamese law, and is established and operates from the date of being granted an Investment License [18 - Article 6, Law on Foreign Investment and Article 11-K3, Decree 24/2000/ND-CP].

Joint venture contracts are established with full contents stipulated in Article 12, Decree 24/2000/ND-CP (July 31, 2000) and are built in the following forms: (i) Build-operate-transfer (BOT) contract; (ii) Build-transfer-operate (BTO) contract; (iii) Build-transfer (BT) contract [18 - Article 2-K11,12,13, Law on Foreign Investment in Vietnam].

A 100% foreign-invested enterprise is an enterprise in which 100% of the capital is invested by a foreign investor in Vietnam, established in the form of a limited liability company, with legal status under Vietnamese law. The enterprise is established and operates from the date of being granted an investment license. A 100% foreign-invested enterprise is allowed to cooperate with a Vietnamese enterprise to establish a joint venture enterprise. Important economic bases are decided by the Government, and Vietnamese enterprises, based on an agreement with the enterprise owner, are allowed to buy back a part of the enterprise's capital to form a joint venture enterprise.

Considering the form of foreign investment in Vietnam, the two types of enterprises with Vietnamese legal status above are joint venture enterprises, with the common characteristic that the Vietnamese party contributes capital in the form of land use rights; and enterprises with 100% foreign investment capital (accounting for 85% of foreign investment projects, mainly foreign investment projects invested in industrial zones. The third form (Article 2-K9, Law on Foreign Investment 2000) is business cooperation on the basis of a Business Cooperation Contract - a document signed between two or more parties to conduct investment activities without establishing a legal entity. Therefore, the subjects of this third form of investment are not the subjects of the research in this Thesis.

When permitted to invest and do business in Vietnam, foreign investors are allowed to lease land or receive capital contributions equal to the value of land use rights from partners in Vietnam (in joint ventures) to implement investment projects in accordance with the provisions of Vietnamese law with the land use term calculated from the date of land handover on site (Decree 24/2000/ND-CP, Article 90). Implementing the Land Law and the Law on Foreign Investment in Vietnam, foreign-invested enterprises when permitted to use land have specific obligations and land use rights according to the provisions of the Ordinance on Rights and Obligations of Foreign Organizations and Individuals Leasing Land in Vietnam, the Standing Committee of the National Assembly promulgates

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