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Legal Update

Investment, Construction and Operation of Projects in New Urban Areas in Hanoi City

7 July 2010
Mayer Brown JSM Legal Update

On 18 June 2010, the People's Committee of Hanoi City promulgated Decision 26/2010/QD-UBND ("Decision 26") amending, adding and superseding a number of articles of Decision 153/2006/QD-UBND dated 31 August 2006 on the management of investment, construction and operation of projects in new urban areas in Hanoi City.

Decision 26 provides the following changes to the relevant provisions in Decision 153/2006/QD-UBND of the People's Committee of Hanoi City:

  • The provision on "Applicable Entities" is changed to cover entities that own projects in the new urban areas of Hanoi City including the expanded area as identified in Resolution 15/2008/NQ-QH12 dated 29 May 2008 which adjusted the administrative boundaries of Hanoi City and some other provinces.
  • The requirement for financial capacity of investors is (i) 20% of the total capital for a project with an area of 20 hectare or more or (ii) 15% of the total capital for a project with an area of less than 20 hectare.
  • The total capital of a project consists of land use fees, land rent, costs of site clearance compensation, resettlement support (if any), cost of technical infrastructure systems (including transportation system, water supply system, drainage system, electricity supply system and public lighting system) for the entire project.
  • For a project with an area of 10 hectare or more, an area of 20% of the total area of the project (the "Area") has to be defined for building apartments/houses to serve as social houses/houses for low income people and for relocation purpose or other purposes as requested by the People's Committee of Hanoi City. Then, the investor will hand over to the People's Committee of Hanoi City the Area on which the technical infrastructure system has been completed. The expense of the completion of the technical infrastructure system is deducted from the land use fee or rent which is paid by the investor.

Decision 26 has come into effect on 2 July 2010.

For inquiries related to this Legal Update, please contact:

David Lim ( )

Hong Than ( )

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