Recent regulatory changes under Resolution 254/2025/QH15 are reshaping how investors approach project transfers involving land use rights in Vietnam.

In this article, Vilasia’s Nhung Nguyen examines how the ability to adjust land use terms upon project transfer could effectively “renew” a project’s lifecycle—potentially unlocking stalled developments while also raising important policy questions around scope of application, land use efficiency, and the alignment between land use term and project duration.

Read the full article in Vietnamese: https://vil.asia/vn-lam-moi-vong-doi-du-an-qua-chuyen-nhuong/https://vir.com.vn/offshore-structuring-and-the-singapore-holding-route-146015.html 

“Renewing” a Project’s Legal Lifecycle through Transfer?

One of the notable aspects of National Assembly Resolution 254/2025/QH15, which establishes mechanisms and policies to resolve difficulties in implementing the Land Law (“Resolution 254”), relates to the transfer of investment projects involving land use. Under the new framework, when an investor acquires a project through transfer, the land use term may be readjusted, provided the investor pays supplementary land rental fees as prescribed.

With numerous real estate projects across the country stalled for years due to legal obstacles, this provision is seen as a breakthrough and is expected to give significant impetus to the project M&A market going forward.

A Breakthrough Measure

Under the Land Law 2024 and its predecessors[1], project land is allocated or leased for a maximum of 50 years, with only certain exceptional cases extending to 70 years. Adjustments or extensions are permitted but may not exceed this ceiling.

Under the Real Estate Business Law 2023, a transferee investor must commit to continuing the project as approved[2], including the form, purpose and term of land use. Although the law leaves room for adjustments to project content, in practice the land use term is typically carried over unchanged. The transferee therefore inherits only the remaining period. If, for example, a project was allocated land for 50 years but 20 years have already elapsed, the new investor would have just 30 years left for legal procedures, construction and commercial operations.

This makes project transfers unattractive in many cases, particularly where the project has been “stalled” for a long time. Investors face substantial restructuring costs yet can only recoup their investment over a significantly shortened horizon.

Allowing the land use term to be readjusted upon transfer is therefore a genuinely significant step.

From a legal standpoint, this is the first time the possibility of “renewing” a project’s legal lifecycle has been expressly provided for in the specific context of project transfer. The transferee no longer needs to evaluate feasibility against the remaining term alone but can plan around an extended timeframe.

For real estate M&A, the implications for deal structuring could be substantial. When acquiring a project, an investor may typically consider — alongside a direct project transfer — a transfer of the project’s constructed works or a transfer of equity in the project company. Previously, the land use term was essentially the same under each structure, being whatever time remained. Under the new provision, a project transfer could become distinctly more advantageous than the alternatives.

From a market perspective, the mechanism could deliver meaningful benefits.

Over many years, real estate projects across Vietnam have been stalled by planning changes, financial difficulties on the part of the original developer, or legal obstacles. These “stalled” projects were typically allocated land long ago, leaving limited time on the clock.

If a new investor can have the land use term reset upon transfer, the incentive to step in and restructure these projects increases considerably. This could unlock a substantial volume of land currently stuck in the system, while generating new supply for the real estate market.

Viewed in this light, Resolution 254 offers an important mechanism for resolving the backlog of stalled projects.

That said, the provision also raises a number of policy questions that need to be addressed.

Unanswered Questions

Scope of Application

Article 4.7 of Resolution 254 refers only to the obligation to pay supplementary land rental fees when a project is transferred. It does not mention “land use fees” – the charges applicable where land is allocated to an investor rather than leased.

The detailed implementing regulations for Resolution 254[3] similarly go no further than prescribing how the supplementary land rental amount is to be calculated.

This suggests that the readjustment mechanism may apply only to projects on leased land, leaving projects on allocated land – where land use fees apply – outside its scope.

In practice, mixed-use residential and commercial-service projects, not just purely residential ones, are subject to land allocation rather than leasehold. If the authorities adopt this narrower reading, the residential component would be unaffected, but the commercial-service component could remain locked into the original timeframe even after the project has changed hands. This gap would deprive investors of the very relief the policy was designed to provide, at least for those project components sitting on leased land.

Efficient Land Use and the Risk of “Project Flipping”

Resolution 254 establishes a highly permissive mechanism. Beyond requiring the investor to pay supplementary land rental, it imposes no conditions regarding the project’s minimum remaining term, planning status or other qualifying circumstances.

If transferring a project effectively means resetting the land use clock, there is a real risk that investors will hold land banks without developing them, simply waiting for a buyer. Each successive transfer would trigger a fresh readjustment, extending the project’s legal lifecycle indefinitely. Without adequate controls, this could weaken the incentive to develop on schedule and, over time, erode the efficiency of land use.

Land Use Term versus Project Operating Term

Under existing rules, the land use term is determined by reference to the investment project’s operating term[4]. The Investment Law 2025, consistent with its predecessors, caps that operating term at 50 years or 70 years[5]. Investors may apply to adjust the operating term during the life of a project, but not beyond this ceiling.

In practice, for land-based projects – particularly in real estate – both the operating term and the land use term are typically set at the maximum from the outset. Investors therefore rarely need to apply for an adjustment.

The extension of a project’s operating term beyond its original maximum upon transfer is addressed for the first time in the Investment Law 2025, which takes effect on 1 March 2026. This is itself considered a significant development.

However, while Resolution 254 allows the land use term to be readjusted on a virtually unconditional basis, the investment law subjects extensions of the operating term to more demanding requirements. This creates a notable misalignment between the investment and land law regimes in respect of these two types of terms.

To adjust the operating term upon project transfer, the following conditions must all be satisfied[6]:

(i) the project was commenced before 1 March 2025;

(ii) the land use right certificate has been issued and all land-related financial obligations have been fulfilled;

(iii) the project is not subject to termination; and

(iv) the remaining operating term is insufficient to support the transferee’s financial or business plan.

Projects that do not meet these conditions will not qualify for an operating term adjustment upon transfer. This raises a difficult question: can the transferee rely on Resolution 254 to extend the land use term while the operating term remains unchanged? And even if the land use term is successfully readjusted but falls out of step with the operating term, what practical difficulties will the investor face over the long course of developing and operating the project?

Taken as a whole, Resolution 254 opens up a new and significant approach to the project transfer market.

If properly designed and implemented, this mechanism could become an important tool for restructuring stalled projects, unlocking land that has been tied up for years and injecting fresh momentum into the market.

For the mechanism to work effectively, however, several key issues still need to be clarified through guidance and implementation – including the scope of application, controls to ensure efficient land use, and the relationship between the land use term and the project’s operating term.

How these issues are resolved will determine whether the new mechanism becomes a genuinely effective instrument for the market, or remains a provision that proves difficult to apply in practice.

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[1] Land Law 2024, Article 172.1(c); Land Law 2003, Article 126.3; Land Law 2003, Article 67.1.

[2] Real Estate Business Law 2023, Article 40.2.

[3] Decree 50/2026/ND-CP, Article 9.

[4] Land Law 2024, Article 172.1(c).

[5] Investment Law 2025, Article 31.2; Investment Law 2020, Article 44.2; Investment Law 2014, Article 43.

[6] Investment Law 2025, Article 52.6.