Vietnam Aims to Enhance Investment Environment and Boost Economic Growth with Land Law Amendments

Vietnam is advancing deliberations on amendments to its Land Law, aiming to enhance transparency in land management and create a fairer and more efficient investment environment. This revision seeks to promote the utilization of land resources for socio-economic development and resolve various issues that have arisen during the law's implementation. The draft law comprises 13 chapters, a reduction of three chapters compared to the current Land Law (2024). Land will be categorized into three groups: agricultural land, non-agricultural land, and development reserve land. This aims to overcome challenges encountered in the practical application of the Land Law in recent times. Regarding land use principles, the draft law inherits provisions from the current law while introducing new principles such as "ensuring the harmonious balance of interests among the State, land users, and relevant parties" and "ensuring transparency, fairness, and gender equality in land access, management, and use." Provisions concerning the rights and obligations of land users will be maintained, with additional regulations for those leasing land from the State on an annual rental basis. According to Mr. Đào Trung Chính, Director of the Land Administration Department under the Ministry of Agriculture and Rural Development, the draft law consists of approximately 110 articles and is designed as a "framework law," stipulating only general principles. This approach aims to simplify many procedures and grant greater autonomy to local authorities. Details previously specified in the law will be transferred to decrees and regulations issued by ministries and agencies. Changes are also anticipated in land valuation. The draft proposes that the State will determine land prices based on a price list and coefficients, which will then be presented to businesses and individuals. Land use planning is moving towards a model where only one plan is established for each administrative unit. For compensation and resettlement, only general principles will be stipulated, allowing local authorities to determine appropriate support based on actual conditions. In terms of administrative reform and digital transformation, provisions on contract notarization will be removed from the law, to be treated as part of procedural regulations, with further details to be stipulated in decrees. Associate Professor Nguyễn Văn Phương from the School of Economics, Vietnam National University Hanoi, emphasizes the direction outlined in Resolution No. 21-NQ/TW, which positions land not merely as a source of revenue but as a crucial "resource" for socio-economic development. Land pricing needs to reflect its actual use value to align with development goals for each period, enabling businesses to plan their medium and long-term investments. Prices that are too low could lead to revenue losses for the state, while excessively high prices might dampen business investment. Lawyer Trương Anh Tú highlights the importance of synergy among the three major laws on land, housing, and real estate business, all effective from August 1, 2024. This land law amendment is not just about reducing articles or procedures but crucially about whether the entire legal process from land to housing will indeed be shortened and function more effectively through the interconnectedness of these laws. Associate Professor Nguyễn Thị Nga from the Hanoi Law University cautions about the provisions related to land acquisition criteria. A regulation suggesting land acquisition is possible if a project covers over 75% of the area may not fully reflect the project's contribution to national infrastructure. This "threshold effect" could incentivize businesses to apply for larger land areas than actually needed, potentially creating an unequal investment environment. Source: Nhan Dan