Acquiring a land using company Vietnam investors target is the standard route by which foreign capital reaches Vietnamese real estate, because foreign-invested enterprises cannot receive transfers of land use rights from individuals in the way a domestic buyer can. The company holding the land is bought instead of the land itself.
That structure works, but it transfers every historical defect in the land file to the buyer. This guide sets out the six safeguards we insist on.
Land Using Company Vietnam: Verify the Form of Land Use
The first question is how the company holds the land: allocation with land use fee, lease with annual rent, or lease with one-off payment for the whole term. The form determines what the company may do with the land and whether the rights are mortgageable and transferable.
Land leased with annual rental payment carries materially weaker rights than land leased with a one-off payment: the assets on land may be dealt with, but the land use rights themselves generally cannot be transferred or mortgaged. A land using company Vietnam buyers value on the assumption of transferable rights is frequently mispriced for this reason.
Land Using Company Vietnam: Confirm Payment and Certificate Status
Outstanding land use fees or rent, unfinished financial obligations, or a missing land use rights certificate will block later dealings and can prevent the company obtaining construction permits.
The certificate should be checked against the cadastral record rather than accepted as produced, and any discrepancy between the area on the certificate and the area actually occupied must be resolved before completion. Encroachment onto adjoining parcels is common in older industrial sites.
Land Using Company Vietnam: Test the Project Purpose
Land is allocated or leased for a stated purpose, and use inconsistent with that purpose is a breach that can support recovery. Where the buyer intends a different use, a change of land use purpose is required and is not always available under the applicable planning.
Verify the detailed zoning plan and construction planning for the parcel, and confirm that the intended use conforms. Our note on planning conformity explains how the test is applied under Decree 96/2026/ND-CP.
Land Using Company Vietnam: Sensitive Locations and Approval
Where the target holds land use rights on islands, or in border or coastal communes and wards, the acquisition requires approval from the provincial investment authority regardless of the size of the stake acquired. National defence and security considerations are assessed.
This threshold catches transactions that would otherwise be routine, including small stake purchases in logistics and tourism companies. Screening the land register early prevents an approval requirement emerging after signing. See our note on M&A approval.
Land Using Company Vietnam: Look Through the Ownership Chain
Where the target is itself owned through intermediate Vietnamese companies, the analysis must be run at every tier. A Vietnamese company majority owned by foreign investors is treated as a foreign investor for onward investment conditions, so an apparently domestic chain can convert into a regulated foreign structure.
Courts and authorities have shown willingness to look through layered structures where the substance is foreign control of land. Our analysis of the look-through principle in land law and of multi-layer ownership structures examines the risk.
Land Using Company Vietnam: Warranties and Retention
Warranties should cover title, absence of dispute and seizure, compliance with the project schedule, payment of all land financial obligations, absence of unauthorised construction, and compliance with environmental and fire safety requirements.
Because remediation of a land defect can take years, a warranty alone is rarely adequate. A retention or escrow released against specific milestones, such as issuance of a corrected certificate, is the mechanism that actually protects the buyer. Our note on the share purchase agreement covers the drafting.
Frequently Asked Questions
Can a foreign investor buy land directly?
No. Land is owned by the people with the State as representative, and foreign-invested enterprises access it through allocation, lease or acquisition of the company holding the rights.
Does buying the company avoid land transfer tax?
It changes the tax profile rather than eliminating it. Capital gains on the share disposal are taxable and the authority may examine the substance.
What if the land is leased with annual payments?
Rights are narrower. Converting to a one-off payment lease may be possible and materially affects value.
How long does diligence take?
Four to eight weeks for a land-heavy target, longer where the cadastral record and the certificate do not match.
Protect Your Land Acquisition
IVLF Advisors runs land and title diligence, structures acquisitions of land using companies, obtains approvals and negotiates warranty and retention packages. See also our land use rights guide and the Ministry of Agriculture and Environment. Contact our team.
This article is provided for general information only and does not constitute legal advice for any specific case. Regulations may change – please consult a qualified professional before acting. Should further analysis be required, please contact one of our lawyers below.
