Jérôme Buzenet (Partner, Vietnam Co-Managing Director, DFDL’s Co-Head of Regional Corporate & Commercial Practice and Regional Mergers & Acquisitions Practice) spoke at a consultation workshop on Vietnam’s draft revised Land Law, which was held on 15 March 2023 in Ho Chi Minh City.
The workshop was organized by Vietnam’s Ministry of National Resources and Environment (MONRE) with support of International Finance Corporation (IFC). This workshop was aimed at collating the local and international business community. The key points raised touched on land use rights and considerations in favour of allowing foreign lender to receive mortgage over property in Vietnam from local lenders.
Jérôme explained the regional standards for security over land and immovable assets available to foreign lenders in other countries or the Southeast Asia region where DFDL operates and beyond.
The key taking points of Jérôme were quoted by Vietnam Investment Review in its issue of March 20-26, 2023. Jérôme notably pointed out that “countries like China, Indonesia, Malaysia, South Korea, and Thailand permit foreign lenders to receive direct security over land use rights of the borrower, but it is not the case in Vietnam.”
He added: “They do so with some restrictions, notably in respect of some sensitive areas, and subject to certain conditions. Most such countries do not allow foreign lenders to take possession or ownership over the collateral in case of enforcement, which protects the genuine national interest. In that scenario, the foreign lender would only be able to enforce the security over land use rights by way of sale to buyers that are qualified to purchase land use rights under the local laws, and would only be allowed to receive the proceeds of such sale. Some other countries like Myanmar allow foreign lenders to receive indirect mortgages over land use rights through a credit institution acting as a security agency or trustee, which is in charge of the sale of the land use rights to buyers.”
During this workshop that closed the formal consultation process for the revised Land Law, MONRE received numerous in-depth and specific comments, especially from the private sector. The IFC’s Business Development Manager, Darryl Dong, and other local and international experts including Jérôme Buzenet pointed out, that amending the Land Law in the right way is essential to ensuring that Vietnam’s land resources meet the development requirements of the future.
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