President Publishes Revised Land and Credit Institutions Laws
On Monday 19 February, the Office of the President announced the passage of two amended laws: The revised Land Law and the updated Law on Credit Institutions. Since both these important pieces of legislation could have implications for foreign enterprises, we take a brief look below at some of their highlights.
The Land Law
The amended Law on Land includes 16 chapters and 260 articles; 180 of which have been revised since the previous legislation in 2013 and 78 of which are new additions. Entering into force on 1 January 2025, the new law aims to make land management in Vietnam more efficient.
The real estate sector in Vietnam has suffered a downturn over recent months, with a post-pandemic dip in demand and prices. The amended law aims to address some of the shortcomings and bottlenecks in the market and unlock its potential to contribute to long-term economic growth.
It contains several important changes, including giving those without a land-use rights certificate the chance to get a ‘red book’. Meanwhile, land prices are set to be more market based, with a new ‘land price table’, updated on an annual basis following submissions from provincial People’s Committees, replacing the old ‘land price frame’ from 1 January 2026.
Meanwhile, it contains new provisions on the circumstances in which the state can requisition land for national benefit or the public good, including on compensation, to make the process clearer and more transparent. The revised law will further enable land rent to be paid in a lump sum or annual installments, creating more flexible conditions for enterprises.
The Law on Credit Institutions
Meanwhile, the revised Law on Credit Institutions is set to enter into force on 1 July 2024 and contains 15 chapters and 210 articles. The revised law includes provisions to regulate the establishment, organisation, control, and dissolution of credit institutions. Of particular note for foreign financial institutions is that the revised law includes procedures for handling bad debts and collateral assets for foreign bank branches involved in debt transactions.
The amended law promotes greater application of new technologies in the banking sector and encourages institutions to develop new financial products and services. It also aims to make banking more open and transparent, strengthening self-regulation and control across the sector.
For more information about either of these laws, and the implications for foreign investors and enterprises, please contact our team on: contact@apflpartners.com
