The 2024 Land Law provides detailed regulations on types of land that cannot be used as collateral at banks. This aims to protect the interests of the State, communities, and land users while ensuring transparency in land transactions. Types of Land Prohibited from Being Used as Collateral at Banks According to the 2024 Land Law

I. Land Allocated by the State Without Land Use Fees to Domestic Organizations, Religious Organizations, and Affiliated Religious Entities

According to the regulations, domestic organizations, religious organizations, and affiliated religious entities allocated land by the State without land use fees are not allowed to use land use rights as collateral.

II. Land Leased Annually by the State to Economic Organizations, Public Non-Business Units, Religious Organizations, and Affiliated Religious Entities

Economic organizations, religious organizations, and affiliated religious entities leased land by the State on an annual payment basis are allowed to use their owned assets attached to the land as collateral at credit institutions licensed to operate in Vietnam, at other economic organizations, or with individuals as prescribed by law.

Thus, for this type of land, users, including economic organizations, religious organizations, and affiliated religious entities, may only use their owned assets attached to the land as collateral but cannot use the land use rights themselves as collateral.

III. Land with Annual Lease Payment Obligations

Under the regulations, individuals leased land by the State on an annual payment basis are permitted to use their owned assets attached to the land as collateral at licensed credit institutions in Vietnam, at other economic organizations, or with individuals as stipulated by law.

Accordingly, for land use rights with annual lease payment obligations, the State only allows the collateralization of assets attached to the leased land, not the leasehold land use rights themselves.

IV. Land Allocated to Communities

In cases where communities are allocated land by the State without land use fees or granted land use rights under the form of allocation without land use fees, they are not permitted to transfer, convert, donate, lease, mortgage, or contribute capital using land use rights.

Therefore, even if community land has a certificate or qualifies for certification, if it falls under the category of land allocated by the State without land use fees, it is not permitted to be used as collateral.

V. Natural Production Forest Land

According to the regulations, individuals or entities leased natural production forest land by the State are prohibited from transferring, subleasing, mortgaging, or contributing capital using land use rights or the lease rights specified in the land lease contract with annual payment obligations.

Thus, for natural production forest land leased by the State, neither land use rights nor leasehold rights are permitted to be used as collateral.

VI. Land for National Defense and Security Combined with Production and Economic Development Activities

For land used for national defense and security purposes combined with production and economic development activities, the following rights and obligations apply to military units, police units, and public non-business units under the People’s Army or People’s Public Security, or State-owned enterprises managed by the Ministry of National Defense or the Ministry of Public Security:

• They are allowed to organize production and business activities as approved by the Minister of National Defense or the Minister of Public Security.
• They may benefit from labor outcomes, investment results on the land, and other benefits as prescribed by law.
• They are not eligible for compensation for the land and attached assets when their land use plan for national defense or security purposes is terminated.
• They are prohibited from transferring, donating, leasing land use rights, mortgaging, or contributing capital using land use rights.
• They are not allowed to change land use purposes without authorization.
• For military units, police units, and public non-business units under the People’s Army and People’s Public Security, the mortgaging of assets attached to the land is prohibited.
• State-owned enterprises managed by the Ministry of National Defense or the Ministry of Public Security are allowed to lease, mortgage, or contribute capital using assets attached to the land as per plans approved by the relevant Ministers.
• In cases of buying, selling assets attached to the land, handling collateral, or dealing with contributed capital assets, transactions may only occur internally among entities specified in Clause 1, Article 201 of the 2024 Land Law, based on plans approved by the relevant Ministers.

For land used for national defense and security combined with production and economic development activities, neither land use rights nor leasehold rights may be used as collateral. Military units, police units, and public non-business units under the People’s Army and Public Security are also prohibited from mortgaging assets attached to the land.

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