Draft law on SEZs still on suspension despite land lease term of 99 years guaranteed to be shortened

The draft law was initially submitted to the National Assembly for approval in the fourth plenary session but with the notice, the long expected regulations to gear up the Vietnam's economy still put on suspension.

The notice specified, "The land lease term will be taken into consideration and submit to the National Assembly for application in tune with prevalent regulations of land law."

"The special cases of lasting until 99 years will no longer be specified," stated the notice.

In response to local press on corridor of the fifth plenary session of the National Assembly, the Prime Minister Nguyen Xuan Phuc said, "It is necessary to adjust the timing of land lease in a way that is consistent with the aspirations that people have reflected on us."

Bui Van Xuyen, member of the Standing Committee of Law of the National Assembly also stated that the land lease term would probably reduce to 70 years, the same as the prevailing Land Law.

Preferential policies related to land, land-attached assets in the draft Law on Special Administrative-Economic Units have provoked different controversies, especially the land lease term of 99 years (instead of maximum 70 years under current regulations) in SEZs.

In some Asian countries such as China, Indonesia, Myanmar, the land lease term for investors in SEZs often lasts up to 50 years, while, Vietnam, Thailand and Philippines are in the process of developing a 99-year lease term.

The draft law was submitted to the National Assembly, and is expected to be voted on June 15.

The opposing opinions to this draft policy are overwhelming compared to the supportive view.

In particular, economist Pham Chi Lan suggested that the maximum land lease mechanism of 99 years was unnecessary as the corporate production life circle could be faster.

“In the era of rapid technology development as currently, hardly any business could operate in the same industry for 70 years let alone 90 years. If the business is bankrupt in 10 years or 20 years then who will manage the transfer or change of land use rights,” said Lan.

In line with economist Pham Chi Lan's point of views, Duong Trung Quoc, deputy of the National Assembly said that this regulation would only benefit real estate investors.

Vietnam would want to reach out to real investors such high-tech enterprises, whose needs are better investment environment, good infrastructure and transparent transactions rather than land use rights for 99 years.

Observers said that the revision of the SEZs draft law to shorten the land lease term would be the Government's attempt to convince deputies of National Assembly to approve the SEZs law in this meeting.