Take note when building factories on land growing perennial crops

In 2022, the Covid-19 pandemic has been somewhat controlled, and Vietnam has begun to reopen to welcome visitors; thus, businesses have started their production and business activities and expanded their scale.

Many businesses have planned to build factories on land growing perennial crops. However, they are still wondering whether it is allowed or not? Let's find out in the article below!

1. What is land for perennial crops?

According to the latest legal document of Vietnam, specifically the Land Law 2013 in Article 10, it is clearly stated that land is divided into two groups:

• Agricultural land.
• Non-agricultural land.

Which land for growing perennial crops is listed in the group of agricultural land.

Specifically, land for planting perennial crops is land used for the purpose of planting and caring for trees with a lifespan, growth, and development for many years (according to Appendix No. 01, Circular 27/2018/ TT-BTNMT promulgates regulations on land statistics and inventory).

It includes the following groups of trees:

• Group of perennial fruit trees: trees that are planted and cared for many years to harvest fruits for fresh eating or processing and production.
• Perennial industrial plants: plants that are planted and cared for a long time, harvested, and through preliminary processing steps as raw materials for the production of industries: coffee, tea, cashew, etc.
• Perennial medicinal plants: plants grown and cared for many years for the purpose of harvesting and making medicinal products from nature, such as ginseng, cinnamon, etc.
• Group of other perennial plants: trees that are planted and cared for, with many years old, but the purpose is to get wood or create a landscape in the living environment, including the case of planting of many perennials or fields mixed with annual plants.

2. Is it possible to build a factory on land where perennial crops are grown?

According to regulations promulgated in the Land Law, only non-agricultural land groups are allowed to build houses.

This means that land for growing perennial crops is not on the list of regulations to serve the construction of factory enterprises.

Specifically, according to Article 170 of the 2013 Land Law, land users must ensure that they use the land for exemplary purposes, the boundaries of the land plot, and the regulations on using the depth in the ground and the height in the air have an obligation to protect public works and to comply with other provisions of relevant laws.

In short, plots of land designated as perennial crops are not allowed to build factories on this land.

3. How to build a factory on legal perennial crops

However, suppose the enterprise wishes to build a factory on land planted with perennial crops. In that case, it is necessary to apply for a permit to change the use purpose from agricultural land to non-agricultural land to legalize the construction workshops serving production and business activities, according to Point "d" Clause 1 Article 57 of the 2013 Land Law.

4. How much does it cost to change the use of the factory?

This is a matter of concern for many businesses.

According to the provisions of law, clause "c" article 5 Decree 45/2014/ND-CP on fees for conversion of land use purpose, the fee is transferred from agricultural land as follows:

The legal, financial obligation of the land user is to pay 50% of the difference between the land use levy calculated at the residential land price and the land use levy calculated at the agricultural price at the time of approval of the decision on the conversion of residential land with the purposes of the competent state agency.

Thus, in case the land the enterprise intends to select is not included in the annual land-use planning for the construction of a factory, the enterprise can change the use purpose by paying a fee under the license permission from the natural resources and environment agency.

The dossier expressing the desire to change the land use purpose shall be submitted to the natural resources and environment agency, including:

• An application for a permit to change the land use purpose, specifically, land for planting perennial crops to build factories.
• An application for registration of changes in land and land-attached assets according to the provisions of Form No. 09/DK issued together with Circular 24/2014/TT-BTNMT.
• Certificate of land use right certified by a competent authority.

If the land use dossier is valid and approved, the enterprise will proceed to pay the fee as determined to complete the procedure for converting the purpose of using land for perennial crops to build factories.

Thus, the article has given you information about perennial land and being able to build a factory on this perennial land, along with some related information.

Hopefully, the above helpful information can help businesses in building factories to expand the scale of production and business activities.