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Is it allowed to build factories on agricultural land?

07-05-2022

Along with the development of economic trade and the gradual increase of the current land price, many businesses want to build factories on agricultural land to serve to increase production. Before deciding to build a project, enterprises need to clearly determine whether the construction of factories on agricultural land is permitted by law. Understanding these needs, BMB Steel decided to share some important information to help you make the best decision possible for your project.

1. Overview of agricultural land

Agricultural land (in English called Farmland or Agricultural land) is a type of land allocated by the state to people to serve the needs of agricultural production. According to the provisions of the 2013 Land Law, based on land use purposes, agricultural land is divided into the following categories: Land for growing annual crops; land for planting perennial crops; protection forest land; production forest land; special-use forest land; aquaculture land; land for salt production and other agricultural land (construction of greenhouses and other types of houses for cultivation purposes, construction of barns for livestock,...)

Building factories on Agricultural land
Building factories on Agricultural land 

2. Are enterprises allowed to build factories on agricultural land?

According to the provisions of the Land Law 2013, land used for construction activities of factories, workshops and production facilities is non-agricultural production land. Land for non-agricultural production (referred to as SKC land) includes land for industrial zones, land for production and business establishments, land for production of building materials, mining, and service production. In non-agricultural services, it may not be used for agricultural or residential purposes. Thus, it can be seen that the construction of factories on Agricultural land is basically not allowed.

Structure in building factories on Agricultural land 
Structure in building factories on Agricultural land 

However, if in the case of operation, an enterprise has a need to expand its production scale, it is completely possible to carry out procedures to convert the using purpose agricultural land into non-agricultural land before applying for a building permit and start construction.

3. Guidelines for conversion of land use purposes to build factories on agricultural land

If you want to build a factory on Agricultural land, you need to apply for permission to change the land use purpose to convert agricultural land to non-agricultural land. The following is the process for applying for a land use change permit:

Step 1: Submit application for change of land use purpose at the local government

Land owners need to prepare a set of documents including the following documents:

  • Application for change of land use purpose. You can check out the application form here.
  • An application for registration of changes in land and properties attached to land.
  • Certificates of land use rights, ownership of houses and other land-attached assets, certificates of house ownership and residential land use rights.

Step 2: Pay the fee for change of land use purpose according to the Notice of payment of land use levy of the tax authority

Land owners pay fees when changing the land use purpose from agricultural land to residential land according to the provisions of Decree 45/2014/ND-CP.

Complete building factories on Agricultural land 
Complete building factories on Agricultural land 

Step 3: Get the result

The results of whether or not to allow the conversion of land use purpose will be responded to by the Natural Resources and Environment Agency where the application has been submitted no later than 15 days from the date of receipt of a valid application.

Once licensed to convert land use purposes, enterprises can legally build factories on Agricultural land. Besides using agricultural land, businesses can also think about the orientation of building factories on residential land to expand production. However, businesses need to carefully study the provisions of the law on the purpose of using these types of land in order to have a correct use that does not violate the law.

Building factories is an important and costly activity of businesses. Therefore, when starting to build factories, businesses should note a few things as follows to facilitate construction activities and save costs.

4. Notes when building a factory on agricultural land

4.1 Proper financial planning

The first thing businesses need to pay attention to when building a new production facility is how much it costs. Building a balanced and thorough cost estimate will help your business save maximum construction costs.

4.2. Choose the right factory model

The choice of factory model directly affects the operation and production and business of the enterprise, so you need to carefully consider the appropriate factory model. You can contact BMB Steel for advice on modern factory models suitable for your production purposes.

4.3.Select the right contractor to design and build the factory

The building factories on Agricultural land 
The building factories on Agricultural land 

In order for the factory to bring the highest efficiency during operation, in addition to finding the appropriate factory model, businesses should choose a reputable construction contractor for advice and cooperation.

With many years of working experience in the field of construction with high-tech techniques and a professional construction team, BMB Steel is committed to providing customers with quality services at reasonable prices. BMB Steel always accompany you to build great works.

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