Vietnam is currently at a pivotal stage of infrastructure modernization. To meet the immense demand for capital, the State has moved to revitalize private sector participation, most notably through the “Build – Transfer” (BT) model.

In a typical BT arrangement, a private investor finances and constructs an infrastructure project, then transfers it to the State upon completion. In return, the State “pays” the investor with land funds, allowing them to develop a “reciprocal project” (dự án đối ứng) to recover their capital and generate profit. While this mechanism is essential to stimulate private sector participation, the recent new legal framework for BT projects may raise significant concern regarding the land access privileges granted to BT investors compared to their counterparts in the general real estate market. In particular,

· Under Decree 257/2025 guiding BT contract, BT investors are permitted to identify the specific land parcels intended for payment as early as the BT project proposal stage. For BT investors, the ability to early secure the land and evaluate the commercial potential of the reciprocal project before making formal commitment to the proposed BT project significantly reduces investment risk. It allows for precise financial modeling and strategic planning for the reciprocal project, providing a level of certainty that standard developers - who must often wait for land auctions or complex planning approvals - rarely enjoy;

· Under Resolution 254/2025 on specific policies and mechanism to resolve obstacles in implementation of the Land Law 2024, the scope of land recovery for “socio-economic development” now explicitly includes creating land funds dedicated to paying for BT investors. This new regulation grants BT investors a level of administrative support in site clearance for their reciprocal project. In contrast, a standard investor whose project does not fall under the State - recovery category may have to engage in direct negotiations with existing land users to acquire land rights. The BT investor, therefore, benefits from a much shorter timeline to receive a “clean” site to implement the reciprocal project; and

· The Resolution 254/2025 also allows the allocation or leasing of land for BT reciprocal projects to be exempt from mandatory land auction procedures. Notably, the land price in this case is typically determined based on the official land price table (bảng giá đất). In practice, prices under the land price table tend to be significantly lower than actual market rates or the final prices reached at a competitive land auction. In contrast, standard developers must typically secure land through transparent and competitive land auction or project tender, often paying a high premium for land-use rights.

It is undeniable that special treatments are crucial to attract massive private investment into essential infrastructure projects. However, the current policies seem to create a two-tier system for land access, giving rise to concerns about the transparency and equality of land resource allocation.

This post is written by Nguyen Hoang Duong.

Vietnam Business Law