Conditions, procedure for capital contribution by land use rights

Capital contribution by land use rights is a form of land use right transfer and this form is more popular than capital contribution by money. It is compulsory to update the changes and modifications in accordance with law provisions when making a capital contribution by land use rights.

1. Conditions for contributing land use rights as capital

Clause 1, Article 188, Land Law 2013 prescribes that land users may exercise the rights to contribute land use rights as the capital when meeting the following conditions:

- Having the certificate, except the case prescribed in Clause 3, Article 186 and the case of receiving inheritance prescribed in Clause 1, Article 168 of Land Law 2013;

- The land is dispute-free;

- The land use rights are not distrained to secure judgment enforcement;

- Within the land use term.

Besides, it is necessary to note that the capital contribution must update the changes and modifications in the cadastral dossier and land database in accordance with law provisions on land.

2. Conditions for receiving the transfer contribution as the capital of agricultural land use rights

Besides the conditions for contributing land use rights as capital for the land users, in the case of receiving the transfer or contribution as the capital of, or leasing, agricultural land use rights to carry out investment projects on non-agricultural production and business must satisfy the conditions prescribed in Article 193, Land Law 2013.

Economic organizations, households, and individuals may receive the transfer or contribution as the capital of, or lease, agricultural land use rights to carry out investment projects on non-agricultural production and business when fully meeting the following conditions:

- Economic organizations may receive the transfer or contribution as the capital of, or lease, agricultural land use rights to carry out investment projects upon receiving written approval from a competent state agency;

- The use purpose for the land area of which land use rights are acquired, contributed as capital or leased must be consistent with the land use master plan and plans approved by competent state agencies;

- Land currently used for wet rice cultivation, shall pay a certain amount of money under the Government’s regulations for the State to supplement the lost area of wet rice cultivation land or improve efficiency in using land for rice cultivation.

3. Dossier, procedure for updating the changes and modifications in capital contribution

3.1. Required dossiers

* Number of dossiers: 01 set

* Dossier's components:

Pursuant to Clause 1, Article 2, Circular No. 09/2021/TT-BTNMT, the dossier for capital contribution includes documents as follows:

- An application form for registration of change to land and land-attached assets, made according to the Form No. 09/DK

With regard to households and individuals receiving transfer of agricultural land use rights, land area over which land use rights are transferred must be specified at Point 4, Section I of the Form No. 09/DK (Reasons for change) as follows:  “Receive … (specify form of land use rights transfer) … m2 (specify land area over which land use rights are transferred); the total agricultural land area currently in use due to land use rights transfer and after land use rights transfer is registered from July 01, 2007 to July 01, 2014 is … m2 and from July 01, 2014 until now is ... m2 (specify land area over which land use rights are transferred by type of land and province/central-affiliated city)”;

Agreement or document on exchange, transfer, lease, sublease, inheritance or donation of land use rights or ownership of land-attached assets.

- The original copy of the issued certificate;

- Written approval of competent agencies for the economic organization receiving the transfer of or capital contribution by or lease of agricultural land use rights to carry out an investment project;

3.2. Procedure for updating the changes and modifications in the capital contribution by land

Step 1: Submit the dossier

The land user submits the dossier at the land registration office; or at the single-door section for the localities having a single-window mechanism to receive and return the dossier.

Conduct the rights of the land user for land parcel division, land user suggests the land registration division shall conduct cadastral surveys for land parcel division and extracts of newly divided land parcels to land users before submitting the dossier.

Step 2: Receive the dossier

Step 3: Solve requirements

Step 4: Return the result

Implementation duration: Within 10 days after receiving a valid dossier; or within 20 days for mountainous, island, deeplying, or remote communes or communes in areas with difficult socio-economic conditions or extremely difficult socio-economic conditions.

4. Cases that the contribution of land use rights as capital shall terminate

Clause 3, Article 80, Decree No. 43/2014/ND-CP prescribes the contribution of land use rights as capital shall terminate in the following cases:

- Upon expiration of the duration of the contribution of land use rights as capital;

- At the request of one or all of the parties as agreed upon in the capital contribution contract;

- Upon land recovery in accordance with the Land Law;

- The party contributing land use rights as capital to the business cooperation contract or joint venture enterprise is declared bankrupt or dissolved;

- The individual participating in the capital contribution contract dies; is declared dead; loses the civil act capacity or has it restricted; is banned from operating in the field of business cooperation while such contract must be performed by such individual;

- The legal entity participating in the capital contribution contract terminates operation while such contract must be performed by the such legal entity.

Here are the regulations on the capital contribution by land use rights.