Legal Advisory Expertise: How to Acquire Land and Factory in Vietnam (2025 Guide)

As Vietnam continues to emerge as a major manufacturing and investment hub in Southeast Asia, acquiring land and factory facilities has become a key strategic consideration for foreign investors. However, navigating Vietnam’s land regulations can be challenging. Since land is collectively owned by the State, investors cannot purchase it outright but can obtain land use rights (LURCs) through leases, subleases, or joint ventures.

This article provides an in-depth look at the legal process of acquiring land and factory property in Vietnam, including the steps, regulatory framework, and the crucial role of legal advisory services in ensuring compliance and long-term investment security.

Legal advisory services for land use rights, factory acquisition, and foreign investment compliance

Understanding Vietnam’s Land Ownership System

Unlike in many other markets, land in Vietnam is not privately owned. The State acts as the representative owner, while individuals and organizations can only hold land use rights for a specific purpose and duration.

These land use rights are formalized through the Land Use Rights Certificate (LURC), often referred to as the “Red Book.” This document grants the holder the legal right to use the land for the term specified—typically up to 50 years for industrial or commercial projects, extendable under certain conditions.

For foreign investors, the process is more complex. Only entities established under Vietnamese law—such as foreign-invested enterprises (FIEs)—can lease land directly from the State or from an authorized developer. This means that before acquiring a factory or land plot, investors must ensure their entity structure aligns with Vietnam’s Investment and Enterprise Laws.

Legal Pathways for Acquiring Land and Factory

There are several ways for investors to access land and factory premises in Vietnam, each governed by specific legal procedures.

The most common route is through leasing land from the State, which is often managed by the provincial People’s Committee or via developers in industrial parks and economic zones. Leasing directly from the State typically applies to large projects, while subleasing within an industrial zone offers faster access and pre-built infrastructure such as roads, power, and water systems.

A second option is to sublease land from an existing land user. This approach allows investors to take over land that already has infrastructure or a factory in place, often with an existing LURC. In this case, investors must conduct thorough due diligence to confirm the validity of the land rights and ensure no encumbrances, disputes, or unpaid financial obligations exist.

In some cases, investors may also acquire a company that already owns land use rights, effectively purchasing the shares of the landholding entity. This option, while efficient, requires careful legal advisory review to identify any hidden liabilities tied to the company’s previous operations.

Regulatory Framework and Required Approvals

Foreign investors must comply with multiple layers of regulation when acquiring or leasing land. The process begins with the application for an Investment Registration Certificate (IRC), which specifies the scope, capital, and location of the project. Once approved, the investor must obtain a Business Registration Certificate (BRC) to establish the legal entity that will hold the land use rights.

After entity formation, investors can proceed with land lease or sublease agreements, which must be registered with the local Land Registration Office to receive the LURC. The registration process ensures that the investor’s rights are recognized under Vietnamese law and that the land use is consistent with the project’s purpose as stated in the IRC.

Other essential permits include construction licenses, fire safety approvals, and environmental impact assessments (EIA), especially for factory operations. Each approval involves coordination with provincial authorities, highlighting the importance of experienced legal advisory to manage timelines and compliance.

Due Diligence and Risk Management

Conducting thorough due diligence is critical to minimizing risks in land or factory acquisition. Legal advisors typically start by examining the land’s legal status, reviewing the LURC for its term, boundaries, and restrictions. They also confirm whether the land is zoned for industrial or commercial purposes, ensuring that the intended use aligns with local development plans.

In addition to legal verification, advisors assess infrastructure readiness—such as roads, water supply, electricity, and waste management—and evaluate environmental liabilities. This is especially important for manufacturing facilities that may require environmental clearance before operation.

Legal advisory teams also help investors evaluate contract terms, negotiate renewal rights, and identify potential compensation clauses in case of early termination or State land reclamation. These considerations are vital for long-term operational stability.

Practical Steps to Acquire Land and Factory in Vietnam

The acquisition process generally unfolds in several stages. Investors begin by selecting a suitable location, often within established industrial zones such as those in Bac Ninh, Hai Phong, Dong Nai, or Binh Duong. Once a site is identified, the investor negotiates with the lessor—either the zone developer or the existing land user—on pricing, lease terms, and infrastructure support.

Next, the investor proceeds with land lease registration and applies for the LURC. Once issued, the LURC officially grants the investor land use rights for the specified duration. If factory construction is part of the project, investors must obtain design approval and construction permits before development begins.

Throughout these steps, coordination with legal advisors ensures that all documentation is compliant, deadlines are met, and approvals are secured without procedural errors that could delay project implementation.

Post-Acquisition Compliance and Management

After acquiring the land or factory, ongoing compliance becomes an integral part of maintaining legal security. Investors must use the land strictly according to the purpose stated in the LURC and are required to pay land rental fees or lease payments on time.

Additionally, businesses must regularly update their registration if they expand or change the project’s scope. Non-compliance, such as idle land use or deviation from approved purposes, can lead to penalties or even State reclamation.

Many investors engage long-term legal advisory partners to monitor regulatory updates, renew land use certificates, and assist in future transfers, expansions, or joint ventures involving the acquired property.

Conclusion

Acquiring land and factory facilities in Vietnam requires more than financial capability—it demands a strategic understanding of the legal environment, administrative procedures, and compliance responsibilities. With a comprehensive legal advisory partner, investors can mitigate risks, streamline approvals, and secure long-term stability for their industrial operations.

As Vietnam continues to refine its legal framework and promote foreign investment in manufacturing, now is an opportune time to establish a foothold in one of Asia’s most dynamic production markets.

Partner with Expert Legal Advisory in Vietnam

Secure your land or factory investment with confidence. VINEX’s legal advisory team assists with land leasing, factory acquisition, and regulatory compliance — ensuring every step meets Vietnam’s latest legal standards.

Vinex offers comprehensive services to navigate tariffs and trade barriers:

• Company Formation: Register LLC or JSC, secure ERC/IRC in 1-3 months.

• Legal and Tax Advisory: Ensure compliance with transshipment tariffs Vietnam China and local regulations.

• Banking and Accounting: Set up accounts, optimize financial reporting.

• Secretarial Services: Manage documentation and certifications. Contact Vinex at +84 98 1111 811 or contact@vinex.com.vn to launch your Vietnam venture.