VARIOUS SPECIFIC POLICIES ARE DESIGNED FOR HO CHI MINH CITY WITH THE OBJECTIVE OF DEVELOPING THE CITY ACCORDING TO THE TOD MODEL, PRIORITIZING THE ATTRACTION OF STRATEGIC INVESTORS FOR INDUSTRIAL, HIGH-TECH, AND TRANSPORTATION INFRASTRUCTURE PROJECTS

Matters

Current legal provisions

Resolution 98

Comment on the consequences/impacts of the particularity mechanisms and policies

The separation of the project of compensation, assistance, resettlement, site clearance

Clause 1 Article 5 of the 2019 Law on Public Investment: the establishment of independent public investment projects to separate compensation, support, resettlement, and site clearance shall only be carried out for projects of national importance or group-A projects.

The Ho Chi Minh City People's Council is entitled to decide on the establishment of independent public investment projects to separate compensation, support, resettlement and site clearance to be carried out for investment projects under separate urban design projects, urban planning projects in the vicinity of railway stations, etc. for urban embellishment, resettlement, auction to select investors ... (without obliging such projects to be projects of national importance, group A projects).

Compared to the current provisions of the 2013 Law on Land and the 2019 Law on Public Investment, these particularity mechanisms allow Ho Chi Minh City to be proactive in creating a "clean" land fund (regardless of investment policies for projects), thereby restoring land resources,  creating more investment space for development in the direction of transport and technical infrastructure.

Adjustment of construction planning

Clauses 1 and 2, Article 35 of the Law on Standards and Technical Regulations 2006; Point d, Clause 1, Article 23 of Decree 127/2007/ND-CP amended by Clause 7, Article 1 of Decree 78/2018; Circular 01/2021/TT-BXD  of the Ministry of Construction, the authority to amend and supplement national technical regulations on construction planning belongs to the Ministry of Construction.

The People's Committee of Ho Chi Minh City may decide to adjust construction density, and technical and social infrastructure indicators compared to regulations in national technical regulations on construction planning for the vicinity of railway stations and intersections according to regulations.

Ho Chi Minh City will be proactive, fast, and convenient in issuing construction plans to suit the characteristics and development requirements of each area. According to ATA, the adjustment of construction density, and technical and social infrastructure indicators compared to national technical regulations needs to be carefully considered and evaluated so as not to negatively affect issues such as traffic, population, and environment...

Bidding for selection of investors to implement projects using land

Article 11 of Decree No. 25/2020/ND-CP, amended by Clause 4 Article 108 of Decree 31/2021/ND-CP: Investment projects using land must select investors according to regulations when meeting 06 (six) of the following conditions:

1. Belonging to prescribed projects without using public investment capital for the construction of works.

2. Being on the list of projects requiring land acquisition approved in accordance with the land law.

3. To belong to housing development programs and plans in accordance with the law on housing; urban development programs (if any) in accordance with the law on urban development.

4. Conformity with socio-economic development plans, construction plannings at the rate of 1/2,000 or 1/500 (if any) or urban subdivision plannings at the rate of 1/2,000 or 1/5,000 as prescribed by law.

5. Not being eligible to organize the auction of land use rights in accordance with the law on land.

6. Not falling into the case of appointing contractors or selecting investors in special cases.

The People's Committee of Ho Chi Minh City may organize the bidding to select investors to implement projects with land use that fully meet 03 (three) of  the following conditions:

1) On the list of projects requiring land acquisition in case the State recovers land for socio-economic development in the national and public interests in accordance with the land law;

2) There is a land area managed by the State in the land area for project implementation;

3) The land has not been cleared.

Ho Chi Minh City will be proactive and quick in bidding to select investors for projects using land, without the approval/approval of the construction planning.

Applies the type of BT contract

Point d, Clause 5, Article 101 of the Law on Investment in the form of public-private partnership, from January 1, 2021, stop the implementation of new projects applying BT contract type.

From 01/08/2023, Ho Chi Minh City will be able to apply BT contract type for new projects; Accordingly,

+ Competence, order and procedures for selecting investors to execute projects applying BT contract type shall be implemented for PPP projects in accordance with the law on investment in the mode of public-private partnership.

+ However, issues of loan interest, reasonable profit, payment method, settlement of project implementation applying BT contract type shall be decided by the Government.

Ho Chi Minh City will be proactive in choosing investment methods suitable to the characteristics and requirements of each project; thereby opening up, and mobilizing more social resources to invest and build and develop the city. According to ATA, this mechanism and policy both ensure the mobilization of more resources and minimize the negatives that may arise from the implementation of BT contracts.

Adjustment of construction planning, urban planning

Clause 1, Article 34 and Clause 3, Article 39 of the 2014 Law on Construction, the Prime Minister has the authority to approve plans and locally adjust the general planning for the construction of functional zones according to regulations  (economic zones, hi-tech parks, tourist resorts, research and training zones, etc national sports area).

The Prime Minister shall decide on the decentralization of the Ho Chi Minh City People's Committee to approve the local adjustment of the general planning for the construction of functional areas according to regulations.

Ho Chi Minh City will be proactive in adjusting the planning for the implementation of investment projects, ensuring compliance with the conditions of each area.

Appraisal and approval of investment policies for social housing projects

Point c, Clause 7, Article 31 of Decree 31/2021/ND-CP, social housing investment projects must be appraised for the conformity of the investment project with the detailed planning (if any), the zoning plan (if any) to be considered and approved for investment policies.

Clause 1, Article 18 of the Law on Urban Planning stipulates: detailed planning and subdivision planning must conform to general planning.

At the time of approval of investment policies, in case the detailed planning or subdivision planning is not in conformity with the general planning,  Ho Chi Minh City shall be allowed to approve the investment policy according to the general planning and indicators on land use coefficient or construction density in accordance with the law on housing.

Ho Chi Minh City will be proactive in reviewing and approving investment policies for social housing projects, shortening the time in implementing investment procedures, thereby attracting more resources for social housing development, contributing to ensuring the social security of the City.

Matters

Current legal provisions

Resolution 98

Comment on the consequences/impacts of the particularity mechanisms and policies

Change of using the purpose of land for rice cultivation

Point b, Clause 1, Article 58 of the 2013 Land Law, provincial-level People's Councils may decide to change the use purpose of fewer than 10 hectares of rice-growing land.

The Ho Chi Minh City People's Council is entitled to decide to change the purpose of using land for rice cultivation to less than 500 hectares.

Increase decentralization and increase initiative for Ho Chi Minh City, contributing to helping Ho Chi Minh City attract many investment projects for local socio-economic development.

Allocation of land funds for social housing development

Clause 4 Article 1 of Decree 49/2021/ND-CP: In case of an investment project to build commercial houses or urban areas with a land use scale of 2 hectares or more... 20% of the total residential land area must be set aside in detailed planning plans ... to build social housing.

The People's Committee of Ho Chi Minh City shall approve the planning and allocation of the social housing land fund within the scope of the commercial housing project or approve the planning and allocation of the social housing land fund in a location other than the scope of the commercial housing project to meet the demand for social housing.

The Ho Chi Minh City People's Committee will take the initiative in allocating suitable land funds for social housing development.

Type of land for the construction of social housing

Clause 3, Article 56 of the Law on Housing and Land for Social Housing Development includes:

a) Land allocated by the State for the construction of houses for lease, lease, purchase or sale;

b) Land leased by the State for the construction of houses for lease;

c) The residential land area in the commercial housing construction investment project that the investor must reserve for the construction of social housing according to regulations;

d) Lawful residential land of organizations, households and individuals used to build social housing.

Land for social housing development includes land allocated by the State, land leased by the State, land with lawful use rights of organizations, households and individuals in accordance with land use plannings, plans, construction plannings and urban plannings approved by competent state agencies (which are not required to be land used to the construction of houses in accordance with the provisions of the Housing Law).

Determination of land use levy and land rent

 (+) On the determination of land use levy

Points a and b Section 1.1, Clause 1, Article 3 of Circular 76/2014/TT-BTC of the Ministry of Finance:

- In case of land allocation by the State with a land value of VND 30 billion or more, for centrally-run cities... then the land price calculated to collect land use levy is the specific land price ... determined according to the methods of direct comparison, deduction, income and surplus specified in the Government's Decree on land prices.

- In case the land is allocated by the State but the land value is less than VND 30 billion for centrally-run cities, the land price calculated for land use levy shall be determined by the land price specified by the provincial People's Committee in the Land Price List multiplied (x) by the land price adjustment coefficient.

(+) On the determination of annual land rent

Points b and c, Clause 1, Article 3 of Circular 77/2014/TT-BTC stipulate:

- In case the land lease pays annual land rent not through the form of auction but ... valuable land parcels ... from VND 30 billion or more for centrally run cities ... then the land price calculated to collect land rent is ... determined according to the methods of direct comparison, deduction, income and surplus specified in the Government's Decree on land prices.

- In case the land lease pays annual land rent not through the form of auction but ... land parcel ... valuable.... less than 30 billion VND for centrally run cities... then the land price calculated to collect land rent is the land price calculated according to the purpose of using leased land specified by the People's Committee of the province in the Land Price List multiplied by (x) with the land price adjustment coefficient.

(+) Regarding the determination of land use levy when changing land use purposes beyond the limit of households and individuals

Point b, Clause 3, Article 5 of Circular 76/2014/TT-BTC stipulates: the land area exceeding the limit of residential land allocation, the land price calculated to collect land use levy for the purpose before and after the change of purpose is the land price corresponding to each purpose and each case applies land valuation methods (direct comparison method,  deductions, income, surplus...)

Ho Chi Minh City shall promulgate and apply the land price adjustment coefficient in accordance with the practical situation of the City to apply the calculation of land use levy and land rent to all land areas and land parcels, regardless of value to apply to the following cases:

- Change of land use purpose for an area exceeding the limit of households and individuals;

- Land lease shall pay annual land rent to organizations and individuals, except for the case of using land for the implementation of investment projects on commercial housing construction.

Ho Chi Minh City will be proactive and accelerate the process of determining financial obligations on land, thereby facilitating the rapid implementation of investment projects in practice.

Rights of land users to be leased land by the State to pay annual land rent

Clause 1, Article 175 of the 2013 Land Law, economic organizations using leased land to pay annual land rent have no right to mortgage or lease land use rights.

The city may decide to allow economic organizations that are leased land by the State to collect annual land rent but the land rent does not originate from the state budget, have the right to mortgage, transfer or lease the lease right in the land lease contract if satisfying the prescribed conditions.

To implement the above mechanism, Resolution 98 requires buyers and tenants of lease rights in land lease contracts to carry out procedures for registration of mortgage, assignment or lease of lease rights in land lease contracts; The land registration office is responsible for registering land in land use right certificates and cadastral records, land databases on the basis of signed contracts.

Compared with the provisions of the 2013 Land Law, this is a new and specific mechanism and policy for Ho Chi Minh City. Currently, this mechanism and policy have been mentioned in the revised draft of Land Law 2013 (ATA has analyzed and commented on the above content in the special legal bulletin welcoming spring 2023 Customers can refer here)

No

Priority industries

Conditions for strategic investors

1

Invest in building innovation centers, research and development (R&D) centers; investment in research and support for hi-tech transfer in a number of fields with investment capital of VND 3,000 billion or more.

- Having charter capital of VND 500 billion or more when implementing the project; and

- Experience in project investment in similar fields with total investment capital of VND 2,000 billion or more.

2

Project investment in the field of semiconductor integrated circuit industry, design technology, component manufacturing, integrated electronic circuits (ICs), flexible electronics (PE), chips, ... have an investment capital of VND 30,000 billion or more.

-  Having charter capital of VND 5,000 billion or more or total assets of VND 25,000 billion or more; and

- Experience in project investment in similar fields with total investment capital of VND 10,000 billion or more.

3

Invest in the project to build Can Gio International Transshipment Port according to the plan with an investment capital of VND 50,000 billion or more.

- Having charter capital of VND 9,000 billion or more; and

- Experience in project investment in similar fields with total investment capital of VND 25,000 billion or more.