Leasing a Factory in Vietnam 2026 for US and Foreign Manufacturers: Why You Cannot Buy Land, Four Ways to Get a Site, and One-Off vs Annual Rent

Key takeaways

• A foreign company cannot own land in Vietnam, but it can hold a long-term land use right. Inside an industrial park the usual routes are to sublease serviced land from the park developer or to rent a ready-built factory.
• The choice of payment method is back. The 2024 Land Law confined one-off rent payment to a few land uses. National Assembly Resolution 254/2025/QH15 lets a lessee choose between a single payment for the whole term and annual rent from 1 January 2026, and companies that leased land before 2026 may choose as well.
• In an industrial park, first ask how the developer itself pays. Land the developer holds from the State on annual rent can only be subleased to you on annual rent.
• One-off and annual payment carry very different rights. With one-off payment you may mortgage and transfer the land use right and contribute it as capital. With annual payment you may mortgage and sell only the buildings you put up, not the land use right itself.
• Annual rent is reset every five years, with a cap. The increase may not exceed cumulative national consumer price inflation over the previous five years. The management and infrastructure fees a developer charges on top have no such cap.
• Extension is not automatic. The application must be filed no later than six months before the land use term ends. Miss it and, as a rule, the term is not extended.
• Fire safety acceptance is now on the owner. From 1 July 2026 the authorities no longer check the acceptance result, so responsibility sits with the building owner.
• After the 2025 provincial mergers, addresses and authorities changed. Binh Duong and Ba Ria-Vung Tau were merged into Ho Chi Minh City, Long An into Tay Ninh, Bac Giang into Bac Ninh, and Binh Phuoc into Dong Nai.

A US manufacturer usually starts from two assumptions: that industrial land can be bought outright, and that the bank at home can take the site as collateral. Neither holds in Vietnam. Land belongs to the entire people, and the State exercises ownership and manages it on their behalf. A foreign-invested company never receives title to land. What it can get is a land use right for a fixed term, or a lease of a factory that someone else has built.

Most foreign investors learn that much early. What costs them money is usually three other things: the payment method decides whether the site can be mortgaged or sold, an industrial park often has fewer years left than the contract says, and the fire safety and environmental papers of a ready-built factory were never checked item by item.

The rules moved again in 2026. Resolution 254/2025/QH15 took effect on 1 January, new provincial land price tables apply from the same date, and a bill to amend the Land Law is before the National Assembly. This guide sets out the rules in force in November 2026 and the checks to run before signing.

1. The 2026 legal map for a foreign manufacturer

You will see references online to "Vietnam's new 2026 Land Law". What actually took effect in 2026 is Resolution 254 and its implementing rules. The amendment to the Land Law itself is still a bill. Sign on the basis of the rules in force, and build an adjustment mechanism for a change of law into the contract.

2. Four ways to get a factory site

For most manufacturers the first two routes are enough. The third generally suits only large projects with special site needs. The fourth requires full legal due diligence on both the land and the company. It is also possible to buy an existing factory outright, or to take a transfer of a land use right on which rent was paid in one lump sum. Such sites come up inside and outside industrial parks, but check the seller's payment method, the remaining term and whether the buildings were lawfully built.

For the fourth route, the approvals, tax and due diligence involved in acquiring the company that holds the site are covered in Buying a Company in Vietnam 2026 for US and Foreign Buyers: The Article 21 M&A Registration, the 50% Line, the 2% Seller Tax and 12 Due Diligence Items .

Do not use a Vietnamese nominee to hold land or shares in order to get around foreign ownership limits. In Precedent 02/2016/AL of the Supreme People's Court, the party who paid for the land and registered it in a relative's name recovered the price and part of the gain in value, not the land. For the risks, see Nominee Investment in Vietnam 2026: Why Holding Land or Shares Through a Vietnamese Name Fails .

3. One-off payment or annual rent: a choice again in 2026

From tightening in 2024 to loosening in 2026

The 2024 Land Law leaned towards annual rent. Under Article 120, one-off payment was available only for a few land uses, such as industrial parks, industrial clusters and high-tech parks. Everything else paid annually.

Article 4.2 of Resolution 254/2025/QH15 changed direction. From 1 January 2026, when the State leases out land, the lessee may choose to pay rent for the whole term in one payment or to pay annually. Companies that leased land before 2026 have the same choice, so a company on annual rent may apply to convert to one-off payment.

There is one main exception. Where the land belongs to a land fund entrusted to a State agency or State organization for management, it must be leased by auction or tender. Land won at auction must be paid for in one payment, and a project already using such land on annual rent cannot convert.

The policy direction is the same. Resolution 21-NQ/TW of the Party Central Committee, dated 28 July 2026, states that land users may choose annual or one-off payment according to the purpose, scope and term of use.

What you can choose when subleasing in an industrial park

A foreign manufacturer in an industrial park usually does not lease from the State. It subleases from the developer. Under Article 202 of the Land Law, what you can choose depends on how the developer itself leases from the State:

• Land the developer holds on one-off payment may be subleased to you on one-off payment or on annual rent.
• Land the developer holds on annual rent may be subleased to you on annual rent only.

A developer may apply to the State to convert all or part of its land from annual rent to one-off payment. So the first question in a negotiation is not the unit price. It is whether this plot is held on one-off payment or annual rent. The same rules apply when you sublease from the developer of an industrial cluster (cụm công nghiệp).

Reports on the bill to amend the Land Law indicate that the authorities are considering requiring industrial park infrastructure developers to pay in one lump sum in all cases. That is still a bill and may change, but companies planning a long-term plant should watch it.

How the rights differ

Two points are easy to get wrong.

First, the mortgage can only be given to a credit institution licensed to operate in Vietnam. An offshore lender cannot take a mortgage over a Vietnamese land use right directly. A US parent that plans to finance the plant with its home bank needs to route the security through a bank or branch licensed in Vietnam, or use other collateral.

Second, a lessee on annual rent can sell "the right to lease under the lease contract" together with the factory, but the conditions are narrow. The lessee must have advanced compensation and resettlement costs, and that advance must not yet have been fully offset against rent. Most industrial park subleases do not qualify.

How annual rent is adjusted

Under Article 153.2 of the Land Law and Article 32 of Decree 103/2024, annual land rent is fixed for a stable period of five years. When it is recalculated, if the new rent is higher than in the previous period, the increase may not exceed cumulative national consumer price inflation over the previous five years.

That cap protects the land rent paid to the State. The infrastructure usage fee and the management and maintenance fee that a developer charges separately are set by the sublease contract and are not covered by it.

There is one rule you can rely on. Under Article 27 of Decree 35/2022, a developer must register its sublease price and fee schedule with the industrial zone management board. Where an increase exceeds the registered schedule by more than 10 per cent, it must re-register and give reasons. This is not a price cap, but it is a basis for negotiation and for a complaint.

Land price tables and adjustment coefficients

Vietnam has abolished the national land price framework. Under Resolution 254, each province's land price table applies from 1 January 2026 and is revised only when needed. The provincial people's committee also publishes each year a land price adjustment coefficient applicable from 1 January. Land rent is in principle the table price multiplied by the coefficient.

For a company on annual rent, the rent for the next five-year period is calculated from the table and coefficient in force at that time. It is worth watching the price table in your province every year.

4. The term: a contract that says 50 years does not mean you have 50 years

Under Article 172 of the Land Law, the land use term for an investment project follows the project's operating term and may not exceed 50 years. A project whose operating term under investment law exceeds 50 years may have up to 70 years. Inside an industrial park, watch four things.

• The park itself has a term. The developer's land use term follows the park's infrastructure project. Parks set up in the 1990s and early 2000s may not have many years left.
• If your project term is longer than the park's remaining term, the developer must apply to adjust it. Under Article 202, the developer must then apply to the authorities to extend the park's land use term and pay the additional charge, with a total term of no more than 70 years. Until the developer has done so, the years beyond the remaining term are not protected.
• Three documents must show the same term. The project term in the Investment Registration Certificate, the term of the sublease, and the developer's own land use term should match.
• Extension is not automatic. Under Article 172.3, the application to extend must be filed no later than six months before the term ends. If it is not, the term is not extended except in a case of force majeure, and the State takes the land back.

In practice, ask the developer for its certificate of land use rights and its land lease decision before signing, and check the remaining term. Judge the total price of a one-off payment against the years you can actually use, not against the unit price per square meter alone.

5. Due diligence checklist for a ready-built factory

A ready-built factory is the usual choice for small and mid-sized manufacturers because it is quick to occupy. But whether the lessor's papers are complete decides whether you can obtain your investment license and pass fire safety and environmental inspections.

The lessor's capacity

• Leasing out a factory is real estate business. Under Article 9 of the Law on Real Estate Business, the lessor must in principle be an enterprise registered for real estate business.
• To be lawfully leased, the factory must have certificates for the land use right and the assets on the land, be free of disputes and not be under attachment (Article 14).
• Where the lessor is itself a tenant, subletting requires the consent of the head lessor. The law does not require that consent to be in writing, but you should ask to see it in writing.

The building's documents

• The construction permit and the completion acceptance documents.
• The fire safety design appraisal. Under Article 17 of the Law on Fire Prevention, Fighting and Rescue, if you alter the building or change its use after leasing in a way that changes fire safety conditions, a new design appraisal is required.
• The fire safety acceptance documents. Under Article 18, acceptance is carried out by the owner. Under Government Resolution 66.18/2026/NQ-CP, from 1 July 2026 to 28 February 2027 the authorities' inspection of acceptance results is suspended nationwide, and the owner carries out acceptance itself and bears full responsibility. The procedure is simpler, but the responsibility is no lighter, so keep complete records. When the resolution expires, check the rules then in force.

Who is responsible for environmental compliance

The lessor is responsible for the shared treatment facilities of the whole site. Whether the tenant itself needs an environmental permit or environmental registration is decided under the 2020 Law on Environmental Protection by sector, scale and pollution risk. There is no single answer. In replies on individual cases, the authorities have taken the view that a tenant that discharges wastewater into the lessor's central treatment system, does not discharge directly to the outside and generates very little hazardous waste need not apply for a separate environmental permit. A reply on one case is not a regulation, so confirm with the authorities for your own sector and scale before signing. A tenant in a high pollution-risk sector, or of large scale, must obtain its own.

Fitting the lease to the investment license

• An application for the Investment Registration Certificate must include a document proving the right to use the project site, such as a factory lease or another agreement on the use of the premises.
• A factory lease must be in writing, but notarization is not mandatory. Under Article 44 of the Law on Real Estate Business, a contract to which a real estate business enterprise is a party is notarized only if the parties ask for it. Notarizing a long, high-value lease helps later with licensing and with proof.

6. Eight contract clauses to negotiate hardest

• Payment method and the status of the developer's land. State how the developer leases from the State and the remaining term, and make them representations and warranties of the lessor.
• Adjustment of management and infrastructure fees. Agree the review interval and a cap, and require the fee schedule registered with the management board to be produced at each adjustment.
• Handover conditions. Site leveling, access road, power and water capacity, and the wastewater connection point.
• Allocation of fire safety and environmental responsibility. Which party is responsible for which documents, and who pays for remedial work.
• Cooperation with a mortgage. Where rent is paid in one payment, require the developer to cooperate with the certificate of land use rights, mortgage registration and bank documents.
• Transfer and subletting. Whether the developer's consent is needed if you later sell the site or reorganize within the group, and on what conditions.
• Early termination and what happens to the buildings. How the factory and equipment are dealt with on termination or expiry, and whether compensation is paid.
• Dispute resolution. Provide for arbitration at the Vietnam International Arbitration Centre (VIAC). An award made by a Vietnamese arbitral institution does not need court recognition and, if the other side does not comply, can be taken straight to the civil judgment enforcement agency. For clause wording, see Arbitration in Vietnam 2026: VIAC's New Rules, Enforcement and Clause Drafting for Foreign Investors .

7. After the 2025 provincial mergers

Under National Assembly Resolution 202/2025/QH15, Vietnam has had 34 provincial-level units since 12 June 2025, and the new provincial governments have operated since 1 July 2025. The changes in the areas where foreign manufacturing is concentrated are as follows.

After a merger, the address of the industrial park, the competent industrial zone management board and the applicable land price table may all change. New leases and license applications should use the new administrative names. The level of the licensing authority has not changed. For a project in an industrial park, the Investment Registration Certificate and the Enterprise Registration Certificate are still issued by the industrial zone management board. For a project in an industrial cluster, they are handled by the provincial Department of Finance.

Old documents do not have to be reissued. The National Assembly resolution expressly prohibits the authorities from requiring a business or an individual to replace documents issued before the merger that are still valid. Update the address when you next register a change.

8. Six mistakes foreign manufacturers make most often

• Comparing unit prices per square meter without counting the remaining term. A cheap plot in an old park may have far fewer usable years.
• Assuming that a lease marked "one-off payment" can be mortgaged. It also depends on how the developer itself pays, and on whether a certificate of land use rights has been issued in your name.
• Leaving management fees without an agreed cap. Land rent has a statutory cap. Management fees do not.
• Renting from a sub-lessor without seeing the head lessor's consent. If the head lease fails, yours goes with it.
• Extending the building or changing its use without a new fire safety design appraisal. Now that acceptance is done by the owner, liability after an incident falls more directly on the owner.
• Missing the deadline to apply for an extension. Six months before expiry is the last day, not a suggestion.

Frequently asked questions (FAQ)

Can a foreign company buy land in Vietnam?

It cannot own land. Land in Vietnam belongs to the entire people, and the State exercises ownership on their behalf. A foreign-invested company can lease land from the State, sublease from an industrial park developer, take a transfer of a land use right inside an industrial park or high-tech park, receive a land use right as a capital contribution from a Vietnamese company, or acquire a company that already holds land.

Can rent still be paid in one lump sum when leasing land in Vietnam in 2026?

Yes. From 1 January 2026, National Assembly Resolution 254/2025/QH15 lets a lessee choose one-off payment or annual rent, and this applies to companies that leased land before 2026. When subleasing in an industrial park, it also depends on how the developer leases from the State: land the developer holds on annual rent can be subleased on annual rent only.

Which is better, one-off payment or annual rent?

A company that needs to borrow against the land, or may sell the site later, gets far fuller rights from one-off payment: it can mortgage and transfer the land use right and contribute it as capital. A company with limited capital or a short to medium-term plan has less cash pressure on annual rent, but can deal only with the factory it built.

Can a US bank take a mortgage over my Vietnamese factory site?

Not directly. A land use right, and the buildings on the land, can be mortgaged only to a credit institution licensed to operate in Vietnam, and the land use right itself can be mortgaged only where rent was paid in one payment. Financing from a bank outside Vietnam has to be secured in another way.

Will annual land rent keep rising?

Land rent paid to the State is fixed for five years at a time. When it is reset, the increase may not exceed cumulative national consumer price inflation over the previous five years. The management and infrastructure fees a developer charges separately have no such cap and depend on the contract.

How long can land in a Vietnamese industrial park be used?

The term follows the operating term of the investment project. It is generally no more than 50 years, and up to 70 years for a project whose operating term exceeds 50 years. Inside a park, the years you can actually use are also limited by the park's own remaining term. An extension must be applied for six months before expiry and is not automatic.

Must a lease of a ready-built factory be notarized?

Not necessarily. The lease must be in writing, but a contract to which a real estate business enterprise is a party is notarized only if the parties ask for it. Notarization is still advisable for a long, high-value lease, because it helps with licensing and proof.

Who is responsible for fire safety in a rented factory?

The design appraisal and acceptance documents are in principle the responsibility of the owner that built the factory. A tenant that alters the building or changes its use in a way that changes fire safety conditions must obtain a new design appraisal. From 1 July 2026 to 28 February 2027, inspection of acceptance results by the authorities is suspended nationwide and the owner accepts the works and bears responsibility, so the lease should state which documents and costs each party is responsible for.

Binh Duong is now part of Ho Chi Minh City. Do old contracts have to be re-signed?

No. The National Assembly resolution prohibits the authorities from requiring valid documents issued before the merger to be replaced. Use the new administrative names in new contracts and license applications, and update the address on old documents when you next register a change.

How Louis Group can help

Louis Group has offices in Hanoi and Ho Chi Minh City , where our Vietnamese team handles factory projects for foreign manufacturers. We check the land rights and remaining term of industrial park developers and lessors, review subleases and factory leases, compare the rights and cost of one-off payment and annual rent, and coordinate the investment license, fire safety and environmental procedures. For the overall plan before entry, see The Complete Guide to Establishing Your Business in Vietnam 2026: Investment Licenses, Environmental Impact Assessment and Fire Safety .

Sources

• Lao Dong, on the Ministry of Agriculture and Environment's reading of Article 4.2 of Resolution 254/2025/QH15: Ministry of Agriculture and Environment answers questions about land lease form conversion
• Lao Dong, on the exception for land funds managed by State agencies: Businesses pay attention to cases where land lease forms cannot be changed
• Vietnam News Agency (VietnamPlus), 26 October 2026, on the bill to amend the Land Law: Sửa Luật Đất đai: Khơi thông nguồn lực, hoàn thiện cơ chế số hoá quản lý

Related reading

• The Complete Guide to Establishing Your Business in Vietnam for Taiwanese Companies 2026: Understanding Investment Licenses, Environmental Impact Assessment, and Fire Safety at a Glance
• Nominee Investment in Vietnam 2026: Why Holding Land or Shares Through a Vietnamese Name Fails, What Precedent 02/2016/AL Really Decided, and the 25% Beneficial Owner Rules
• Hiring in Vietnam 2026 for US and Foreign Employers: Why You Cannot Fire At Will, the 2% Union Levy, 32% Social Insurance and Wildcat Strikes

This article is based on Vietnamese law and practice as of November 2026 and has been checked against the legislation by the Louis Group Vietnam team. It is general information, not legal advice. Vietnamese land rules change frequently, so please consult Louis Group about a specific site.