Mortgage of land use rights where land rental is exempted
Under Decree 46/2014, a land user in Vietnam who leases land under lump sum payment for the entire lease term and is exempted from all land rental may have the option to pay the exempted land rental in order to enjoy the rights and obligations applicable to a normal land user including the right to mortgage the relevant land use right with credit institutions.
This is an important new point for many BOT projects which need to be able to mortgage their land use rights in favour of their lenders. Under the old land regulations, investors in a BOT project are exempted from land rental payment. However, this investment incentive has caused considerable difficulties for project sponsors in offering an acceptable security package to foreign lenders.
On 3 September 2025, the Ministry of Finance (MOF) released the Official Letter no. 13629 addressing questions related to difficulties and obstacles arising from legal regulations in the finance and investment sector. This correspondence has several notable issues that are summarized below. While some of the MOF’s guidance offers welcome flexibility and operational reassurance, others fall short of providing clear or comprehensive clarification, leaving important gaps unresolved and inconsistencies with other legislation unaddressed.
Delegation by the General Meeting of Shareholders endorsed in principle (Query no. 29)
Query/Issue raised:
Current regulations regarding delegation/authorisation (both could be translated to/from "uỷ quyền" in Vietnamese) by the General Meeting of Shareholders (GMS) to the Board are unclear and conflicting. […]