As discussed in our previous post, we believe the pilot mechanism introduced under Resolution 171 will bring a significant improvement to the legal framework for commercial housing development in Vietnam. With the enactment of implementing Decree 75/2025, this pilot mechanism is now fully set up. In this post, we will highlight key takeaways from Decree 75/2025 and discuss potential implications for housing developers.

1. Clarification of concept “real estate business organizations holding existing land use right”

Decree 75/2025 defines real estate business organizations holding existing land use right (LUR) under Resolution 171 to include:

· Organizations that use land and have land use right certificates (LURC) or other types of title documents equivalent to the LURC (generally, “title documents”);

· Organizations that stably use land allocated or leased out by the State but have not been granted title documents; and

· Organizations that use land via receipt of LURs, purchase of property, receiving capital contribution in form of property attached to land (generally, “assignment of LUR”) from eligible land users but have not been granted title documents.

Decree 75/2025 requires the above organizations to provide copies of documents evidencing they are currently holding LURs when applying for the pilot projects. In this regard,

· It is not clear as to which documents organizations should provide if they stably use land allocated or leased by the State but have not yet been granted title documents; and

· With respect to the organizations that acquire lands via assignment of LURs, it is not clear if agreements with the former land users on assignment of LUR could serve as evidence for their existing LURs when applying for the pilot project.

2. Priority criteria for selecting land plots and developers for pilot projects

Under Decree 75/2025, the developers of pilot projects will be selected pursuant to the following general principles:

· If multiple developers propose pilot projects on the same land plot, priority is given to the developer currently holding the LUR of that plot; and

· If multiple developers, all eligible to receive LURs through agreement on voluntary assignment, propose pilot projects on the same land plot, priority is given to the developer that submitted its application first.

If after compiling all qualified proposals, the total residential land area registered for pilot projects exceeds the 30% cap, the selection of land plots will follow this specific order of priority:

· Projects of real estate developers that had already received investment policy approval or an official letter from a competent state agency permitting project implementation (either through receiving LURs or having existing land use rights) before Resolution 171 took effect;

· Projects prioritized for implementation by Ministry of National Defense or Ministry of Public Security;

· Projects to be implemented on the land of production or business establishments that must be relocated due to environmental pollution, or in accordance with construction or urban planning requirements; and

· Projects proposed by developers currently holding LURs for the proposed sites; and

· Projects proposed by developers that are seeking to receive LURs via voluntary assignment.

If projects share the same priority level from the above list, further preference is given to projects aimed at urban renovation and improvement. If, even after prioritizing urban renovation projects, the total registered residential land area still exceeds the 30% cap, priority will then be given to the project of developer that submitted its application first.

3. Condition for receiving LUR assignment via voluntary agreement

A developer may only receive LUR assignments after the relevant authority has approved such developer and the land lot designated for pilot projects. To this end, prior to applying for the pilot project, developers should secure the proposed site by reaching conditional LUR assignment agreements with the current land users.

4. Investment procedures for implementing pilot projects

With respect to investment procedures, Decree 75/2025 expressly permits the developers to follow the procedures for obtaining investment policy approval concurrently with investor approval for the pilot projects under the Investment Law 2020. Accordingly, the developers will be exempt from public auctions for LURs or competitive bidding for investor selection.

5. Land procedures for implementing pilot projects

After securing investment policy approval, the developers must complete necessary procedures as stipulated by the land regulations. Decree 75/2025 further provides guidance on these land procedures for the pilot projects in specific circumstances. In particular:

· If the developer already holds the LURs for the project land, the primary procedure will be to change the land use purpose if the relevant land parcel is not for residential purpose;

· When an existing land user establishes a project company (e.g., via joint venture) but its LURs are not eligible to be transferred to the project company, the land must be returned to the State. The State will then recover the land and allocate or lease it to the new project company;

· In the case of:

(a) a project by a real estate developer that was established by existing land-using organizations to implement a commercial housing project prior to the effective date of Decree 75/2025; or a pilot project under Decree 75/2025 implemented on the land of production or business facilities that are subject to compulsory relocation; and

(b) where the land for such a project has not yet been issued a LURC,

then the relocating entity must return the land to the State. The State will then recover this land and allocate or lease it to the real estate developer established by the said relocating entity to implement the pilot project; and

· If the relocating entity had already legally contributed its LURs as capital to the real estate developer, then the real estate developer will carry out the procedures to change the land use purpose pursuant to the applicable law.

This post is written by Nguyen Hoang Duong.

Vietnam Business Law