Vietnam central province to recover land of sluggish Hong Kong-invested IP

Hong Kong-based Hong Yeung Vietnam Company Limited – developer of the Nhon Hoi B Industrial Park in the central province of Binh Dinh – has been asked to maintain the status quo and not call for more investments as local authorities move to revoke its land use rights.

The Binh Dinh Economic Zone Administration (BEZA) said on its website Tuesday that the notice sent to the company aimed to ensure the rights of secondary investors and limit economic losses for the developer.

It had announced earlier that it was completing documents to issue a decision on land recovery given the land violations related to the Nhon Hoi B Industrial Park infrastructure investment and construction project in the central province of Binh Dinh.

While awaiting issuance of the decision, it will not deal with any procedures or petitions related to investment or calling for investment in the IP, BEZA said.

Hong Yeung Vietnam has also been asked to make reports on project investment quantity and value in order to have a premise for formulating a plan on handling investors' assets after land recovery.

Furthermore, the company has been required to prepare all relevant documents and submit them to the administration before June 20 to allow audits in accordance with regulations.

The Nhon Hoi B Industrial Park project covers a total area of more than 451 hectares in the Nhon Hoi Economic Zone, Quy Nhon town, and has a total investment capital of VND850 billion ($33.43 million).

Without providing the project’s operational details, the website says that on May 28, 2021, BEZA issued a decision to extend the land use rights for the project by 24 months, meaning that the extension expired in May 2023.

On August 23, 2023, the administration notified Hong Yeung Vietnam about the recovery of more than 400 hectares because it had violated “point i, Clause 1, Article 64 of the 2013 Land Law," failing to fulfil the investments’ progress and showing slow use of the land.

The BEZA website post states that as of end 2023, the IP had an occupancy rate of just 8%. It does not explain how this happened and how the project lasted nearly two decades with such low occupancy.

In response to the notice, the developer sent documents to the provincial People's Committee, proposing temporary suspension of land recovery procedures and extension of payment period for land rent and interest on late payments.

The BEZA website informs that in the first five months of 2024, provincial industrial zones attracted VND454 billion ($17.86 million) in total investment capital, including VND373 billion for eight new projects and VND80 billion in additional capital for existing ones. During this period, the administration also revoked licenses of seven projects.