Chapter IX

LAND, CONSTRUCTION, BIDDING, RE-ACCEPTANCE TEST, FINANCIAL SETTLEMENT OFPROJECTS

Article 85.- Land lease and payment of land rent

Foreign-invested enterprises and business cooperation parties shall beleased land by the Vietnamese State for execution of investment projects and shall have topay land rents according to the regulations of the Ministry of Finance.

Article 86.- Land rent levels and land rent exemption and reduction

On the basis of the land rent brackets and conditions for land rentexemption or reduction, prescribed by the Ministry of Finance, the provincial-levelPeople's Committees shall decide the land rent level as well as the exemption or reductionthereof for each project. The land rentals shall not be increased for at least 5 yearswhen they are to be increased, the increase level shall not exceed 15% over the precedingreadjustment level.

Where foreign-invested enterprises or business cooperation parties,which are leased land by the State, have paid the land rent in advance for the wholeproject term or for several years, if during such period there is a decision to increasethe land rent, the paid land rent shall not be readjusted.

Article 87.- Regulations on renting land in industrial parks,export processing zones, hi-tech parks

1. For projects on investment in industrial parks, export processingzones or hi-tech parks, which are built with investment by infrastructure developmententerprises, the payment of land rent, the rent for subrent of land on whichinfrastructures have already been developed as well as the charges for use forinfrastructure projects shall comply with the contracts signed with the infrastructuredevelopment enterprises.

2. Foreign-invested enterprises and business cooperation partiesrenting or subrenting land in industrial parks, export processing zones or hi-tech parksshall be granted the land use right certificates under the guidance of the General LandAdministration.

Article 88.- Competence to decide land lease

The Prime Minister shall decide land lease to projects using the urbanland with the area of 5 ha or more, other types of land with the area of 50 ha or more.The provincial-level People's Committees shall decide the land lease to the otherprojects.

Article 89.- Compensation, ground clearance, land lease dossiers

1. In case of land lease by the Vietnamese State, the People'sCommittees of the provinces where exist the investment projects shall have to organize thecompensation, ground clearance, and complete the land lease procedures. The expenses forcompensation and ground clearance shall be accounted into the investment capital of theprojects. The provincial-level People's Committees shall agree with the enterprises whichare leased land on the financial sources for implementation of compensation and groundclearance.

2. Where the Vietnamese party contributes capital with the land useright, it shall have to make the compensation, clear the ground and complete theprocedures for the land use right. Expenses for the compensation and ground clearanceshall be accounted into the contributed capital of the Vietnamese party or agreed upon bythe parties.

3. The compensation unit price shall comply with the general regulations of the State.

4. For investment projects licensed by the provincial-level People'sCommittees, the land lease consideration shall be carried out simultaneously with theconsideration of the investment licensing.

5. For investment projects licensed by the Ministry of Planning andInvestment, the dossiers of application for land lease attached to the dossiers ofapplication for investment licenses shall include the following contents:

a) The location and area of the land plot to be used;

b) The land rental proposed by the provincial-level People's Committeeon the basis of the land rental bracket stipulated by the Ministry of Finance;

c) The compensation and ground clearance plan.

6. Land rent and subrent procedures and dossiers shall comply with theguidance of the General Land Administration.

Article 90.- The time limits for land rent calculation, capitalcontribution with the land use right value

Where foreign-invested enterprises and business cooperation partiesrent land to implement investment projects or the Vietnamese party contributes capitalwith the land use right value, the time limit for calculation of land rent or the value ofcapital contribution of the Vietnamese party shall be counted from the time of thehand-over of land on the field.

Article 91.- Land rent preferences

Foreign-invested enterprises and business cooperation parties areentitled to rent land at the lowest rate and enjoy exemption or maximum reduction ofvarious taxes in case of building dwelling houses for workers and infrastructure worksoutside the fences. The lowest land rent level shall also apply to the fields of medicalexamination and treatment, education and training, scientific research.

Article 92. - Mortgage of laud use right value and assets affixedto land

1. Foreign-invested enterprises may mortgage the land use right valueand assets affixed to land during the land leasing or subleasing terms at Vietnamesecredit institutions, foreign banks' branches operating in Vietnam or joint-venture banksbetween Vietnam and foreign countries in accordance with Credit Institution Law to borrowbusiness capital according to the provisions of law in the following cases:

a) The foreign-invested enterprises have already pay land rent for manyyears if the paid land leasing term remains for at least 5 years;

b) The joint-venture enterprises to which the Vietnamese partiescontribute capital with the land use right, if the duration of capital contribution withthe land use right remains for at least 5 years.

2. The mortgaged land use right value includes the expenses forcompensation and ground clearance and the laud rent minus the land rent paid for durationin which the land was used.

3. The dossiers and procedures for mortgage of the land use right valueshall comply with the guidance if the General Land Administration and the Vietnam StateBank.

Article 93.- De-mortgage of the land use right value and assetsaffixed to land

1. When fulfilling the debt repayment obligation toward the debtsmortgaged with the land use right value and assets affixed to land, foreign-investedenterprises shall unfreeze the mortgage according to the provisions of law.

2. Where the foreign-invested enterprises fail to perform the debtrepayment obligation under the loan contracts, the mortgaged assets shall be handledaccording to law- provisions.

3. Organizations or individuals receiving the lawful land use rightarising from the mortgage according to law provisions shall be entitled to continue usingthe land for the implementation of investment projects as prescribed in the investmentlicenses; any change of or supplement to, the operation objectives must be approved by theinvestment licensing agencies.

Article 94.- Management of the construction of foreign-investedprojects

The management of the construction of foreign-invested projects shallinclude the following contents:

1. Appraisal of the construction project's planning and architecture.

2. Appraisal of technical design.

3. Examination of the implementation of bidding in construction,granting of consultancy and construction license for the bid-winning contractor.

4. Control of the construction project quality.

Article 95. - Appraisal of planning and architectural schemes

The dossier of application for investment license must be enclosed withthe predesign demonstrating the architectural scheme.

The appraisal of the project's planning and architectural scheme shallbe implemented in the process of appraising the investment projects.

Article 96.- Contents of the appraisal of technical designs

The construction project designs shall be appraised in the followingdetails:

1. The legal status of the designing organization.

2. The design's compatibility with the planning and architecturealready appraised in the approved projects and planning.

3. The observance of Vietnamese standards and criteria for technicaldesign and construction or the foreign technical criteria approved by the Ministry of

Construction.

Article 97.- Competence to appraise technical designs andconstruction decision

The competence to appraise technical designs is stipulated as follows:

1. The Ministry of Construction shall appraise technical designs ofGroup A projects prescribed in Article 114 of this Decree, excluding projects withsmall-scale and simple constructions. The provincial- level People's Committees shallappraise technical designs of the other projects.

The Construction Ministry shall guide the appraisal technical designs.

2. The appraisal of technical designs and the notification of decisionthereon to the investors shall be made within 20 working days from the date of receipt ofthe valid dossiers. After the technical design approved, the investor can construct theproject.

Past the above-said time limit of 20 working days, if the technicaldesign- appraising body fails to notify the investor of its decision, the investor canconstruct the project according to the submitted technical design dossier.

3. Within 10 working days before the project construction starts, theinvestor shall have to notify the date of construction commencement to the provincial-level People's Committee of the locality where the project is to be constructed.

Article 98. - Responsibilities for construction works

1. The investors are responsible before Vietnamese law for the qualityand safety of construction works; fire and explosion prevention and fighting; as well asenvironmental protection during the period of project construction as well as throughoutthe period of using the works.

2. The surveying and designing organizations as well as theconstruction contractors shall have to responsibility before the investors and Vietnamesefor their jobs related to the quality of the works.

Article 99.- Putting works to use

Upon the completion of project construction, the investors shall reportthe completion of project construction to the project design- appraising body and beallowed to put the works to use. In case of necessity, this body shall conduct theexamination of the works if any violations of the approved designs and/or the regulationson construction, the violators shall be handled according to law provisions.

Article 100.- Regulations on bidding for projects with foreigninvestment capital

1. Joint-venture enterprises and business cooperation contracts whereState enterprises of Vietnam contribute 30% or more of the legal capital or businesscapital shall have to organize bidding for goods procurement as well as construction andinstallation according to the legislation on bidding. The Management Boards ofjoint-venture enterprises or the competent representatives of business cooperation partiesshall have to approve the bidding plans and results based on the consent of the investmentlicensing bodies.

2. Apart from the projects prescribed in Clause 1 of this Article, theinvestors are encouraged to organize bidding for other projects according to thelegislation on bidding.

Article101.- Final settlement of works

1. Within 6 months after the works or work components are completelyconstructed and put into exploitation and use, foreign-invested enterprises and businesscooperation parties shall have to forward their reports on construction work settlement tothe investment licensing bodies. The investors shall have to bear responsibility for thetruthfulness and accuracy of their settlement reports.

2. Within 30 days after receiving the construction work settlementreports, the investment licensing bodies shall have to consider and grant the certificateof registration of work settlement reports.

In case of necessity, the investment licensing bodies may appraise theinvestment capital settlement reports and request the adjustment of investment capitalaccording to the reasonable expenses.

3. Within 6 months after the works are completely constructed and putto use, the investors shall have to submit the construction completion dossiers forarchive according to law provisions.

4. The certification of ownership over the construction works shallcomply with the provisions of law.

Article 102.- Liquidation

1. The investors shall submit their work settlement reports withcertification of registration to the Customs Offices in order to carry out procedures forliquidation of machinery, equipment, raw materials and materials imported for the projectconstruction and installation.

2. Where the imported goods are not used up for the installation andconstruction of works under projects, the investors shall report such to the investmentlicensing bodies and the Customs Offices for handling. The above-said goods shall be soldon domestic markets only when the Trade Ministry's approval is obtained and the relevantfinancial obligations are fulfilled according to the provisions of law.

Article 103.- Support for technical infrastructures outside thefences

The Government shall provide support for the construction of technicalinfrastructure outside the fences of foreign-invested enterprises or industrial parks,export processing zones and hi-tech parks. In case of necessity, the enterprises whichbuild and deal in the technical infrastructures may come to term with the enterpriseswhich develop the industrial park, export processing zone and/or hi-tech parkinfrastructures or foreign-invested enterprises on the capital advance or other modes forthe construction of technical infrastructures.