May a Joint Venture Receive Capital Contributions in Land Use Rights?

A joint venture — an enterprise with foreign investment — is a land user under the Land Law 2024 and may receive capital contributions in the form of land use rights when the statutory conditions are met (lawful land origin, land allocated by the State with land use levy paid or leased with one-off land rental for the entire lease term, not falling under restrictions on receiving land use right transfers). When the State recovers land, the enterprise is compensated under the Land Law 2024 and Decree 88/2024/ND-CP.

1. May a joint venture receive capital contributions in land use rights?

Yes, conditionally. Under the Land Law 2024 (No. 31/2024/QH15, effective from 01/8/2024, replacing the Land Law 2013), enterprises with foreign investment — including joint ventures between domestic and foreign investors — are land users and have the rights of land users as prescribed by law.

Contributing land use rights to a joint venture is lawful only when the land use rights used for the contribution meet the conditions for land use right transfer under the Land Law 2024, specifically:

• Lawful land origin: land allocated by the State with land use levy paid, land leased with one-off land rental for the entire lease term, or land use rights lawfully received from another organization or individual;
• The land is not in dispute, and the land use rights are not seized for judgment enforcement;
• Within the land use term;
• Not falling under cases where the law restricts or prohibits foreign-invested economic organizations from receiving land use right transfers (e.g., rice-growing land, protection forest land, land in restricted areas as prescribed).

Important note: The provisions of the Land Law 2013 and Decree 47/2014/ND-CP on this issue expired with the Land Law 2013. Readers should not apply the old texts to determine the conditions for land use right capital contributions.

2. Procedures for contributing land use rights to a joint venture

Land use right contributions are made through a land use right contribution contract, which must be notarized or certified as prescribed. After the contribution, the joint venture carries out the land change registration procedure (re-issuance of the Land Use Rights Certificate) at the competent land registration authority.

The value of the contributed land use rights is agreed by the parties or determined by a valuation organization, and recorded in the joint venture’s charter capital. Before receiving the contribution, the enterprise should carefully check: land use planning, land origin, mortgage status, disputes and outstanding land financial obligations.

3. When the State recovers land, is the joint venture compensated?

Yes. When the State recovers land for national defense, security, or socio-economic development in the national or public interest, land users — including joint ventures with lawful land use rights — are compensated under the Land Law 2024 and Decree 88/2024/ND-CP detailing compensation, support and resettlement upon State land recovery.

Compensation principles:

• Compensation in land with the same use purpose, in cash or in housing as prescribed;
• Where the land originated from land use right capital contributions and the land use levy or land rental paid did not originate from the state budget, land compensation applies;
• In addition to land compensation, the enterprise may receive support and compensation for remaining land investment costs and assets attached to the land as prescribed.

The specific compensation and support amounts are decided by the provincial People’s Committee based on the approved compensation, support and resettlement plan.

Notes on applying current legal provisions

This article belongs to the Enterprise Knowledge group and is presented for reference, helping readers understand the legal issue at an overview level before preparing dossiers or conducting transactions. Legal provisions may change depending on timing, locality, dossier type and specific circumstances. Where it is necessary to determine the exact legal basis applicable to your dossier, you should contact an ANT Legal lawyer at 0966.475.966 for review and advice before proceeding.

Common risks to note

• Applying the Land Law 2013 and Decree 47/2014/ND-CP (expired) to assess contribution conditions.
• Receiving land use right contributions that do not meet transfer conditions (disputed land, seized, expired term).
• Failing to check land use planning, leaving contributed land within a recovery plan.
• Failing to register land changes after the contribution, causing land use right disputes.

How can ANT Legal help?

ANT Legal assists in reviewing specific situations, checking dossiers, identifying the applicable legal basis, advising on handling plans, and representing you in working with individuals, organizations or competent authorities when necessary. For quick advice, you may contact a lawyer at 0966.475.966.

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