Transmission Line for Offshore Wind Power Projects in Vietnam

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Transmission line is an integral part of any power project in Vietnam. For an offshore wind power project (Offshore WPP), if the Government and Vietnam Electricity (EVN) does not agree to assume the usual responsibility to develop and operate the transmission line of an Offshore WPP as in the case of onshore projects, then the project sponsor will need to assume such responsibilities and the risks associated with them. This post examines in detail the legal issues which may arise when an Offshore WPP develops, owns and operates its own transmission line under the current legal framework.

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Written by Nguyen Quang Vu On In ,

Approved 2021-2030 Land Use Master Plan

On 13 November 2021, the National Assembly issued Resolution No. 39 to approve the land use master plan for the period 2021-2030 with a vision to 2045 and a land-use plan in 5 years from 2021 to 2025 (Land Use Master Plan).

One of the goals of the Land Use Master Plan is to satisfy the land demand to implement the economic and social development strategy for 10 years from 2021 to 2030 and the economic and social development plan for 5 years from 2021 to 2025. The Land Use Master Plan also aims to stabilize 3,5 million hectares of rice cultivation land, and the forest coverage ratio is at 42-43%.

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Written by Lawyers VNLaw On In

Structure for foreign lenders to take mortgage over the Land Use Right held by Vietnamese borrower

Under Land Law 2013, a foreign lender (Foreign Lender) is not permitted to take mortgage over land use right (LUR) from a Vietnamese borrower. However, a foreign lender with the support of a Vietnamese bank may consider the following the structure to allow a Vietnamese company (Borrower) to use its LUR as security for a foreign lender. The structure could be summarized as follows:

  • A Vietnamese bank (Vietnam Bank) will lend a loan (Domestic Loan) to the Borrower. The Borrower will mortgage to the Vietnam Bank its LUR as security for the Domestic Loan (such mortgage, the LUR Mortgage). Under the Land Law 2013, a company in Vietnam can mortgage its LUR to a bank licensed to operate in Vietnam.

  • Under Vietnamese law, upon enforcement of LUR Mortgage by the Vietnam Bank, the Borrower has the right to receive the remaining proceeds after payment of the Domestic Loan (Right to LUR Mortgage). If the value of the Domestic Loan is less than the value of the LUR then the Right to LUR Mortgage could have substantial value. The Right to LUR Mortgage is usually recorded in the mortgage agreement between the Borrower and the Vietnam Bank. Accordingly, Right to LUR Mortgage is a type of contractual property right, which can be used to secure performance of obligation under Article 14 of Decree 21/2021.

  • Accordingly, the Borrower could mortgage the Right to LUR Mortgage to a foreign lender (Foreign Lender) as a mortgage of contractual rights (Rights Mortgage) in order to secure a loan extended by the Foreign Lender (Foreign Loan) to the Borrower.

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Written by Nguyen Quang Vu On In ,

Major Changes To The Implementing Rules of Law On Real Estate Business in Vietnam

On 6 January 2022, the Government issued Decree 2/2022 on implementation of the Law on Real Estate Business 2014. Decree 2/2022 will take effect from 1 March 2022 and replace Decree 76/2015. This post will summarize some notable new regulations introduced by Decree 2/2022.

This post is written by Nguyen Hoang Duong and edited by Nguyen Quang Vu.

New definitions

Decree 2/2022 introduces definitions for various vague legal terms which are frequently used in the Law on Real Estate Business 2014, such as real properties made available for sale (bất động sản đưa vào kinh doanh), real estate project (dự án bất động sản), or contracts for real estate trading (hợp đồng kinh doanh bất động sản). The new definitions could facilitate a more consistent of the interpretation of various regulations of the Law on Real Estate Business 2014 and Decree 76/2015.

Disclosure requirement by a real estate developer

Under Decree 2/2022, a real estate developer will have to make various public disclosure about its real estate projects. In particular, the following information must be made available on website of the developer, at headquarter of project management board (in case of investment project of doing real estate business), or at real estate trading floor (in case of doing real estate business via trading floor):

· information as to real properties made available for sale;

· information as to mortgage of house, construction works, and real properties made available for sale (if any); and

· information as to quantity, type of (1) real properties available for sale, (2) real properties that have been sold, transferred, leased, and remaining real properties available for trading; and

· any change to the above information.

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Written by Nguyen Quang Vu On In ,