By Vu Manh Quynh, Managing Partner, ECOVIS Vietnam Law | Last reviewed: 16 July 2026
Executive Summary
Unlike the schedule-delay ground (Point b) – where the investor is usually the party directly causing or controlling the underlying cause – the ground under Point (c) can arise from events entirely outside the investor’s direct control: a change at the industrial-zone infrastructure developer, a land lease expiring or being terminated for reasons attributable to the lessor, or a change in area zoning. The law is indifferent to the cause of losing the site – it sets a single hard deadline: 6 months to adjust the site on the record, failing which the project faces termination risk.
Business Context
The investment site is recorded on the IRC itself – it is not an internal operational detail but an official registration item. For manufacturing investors, the legal relationship with the site typically takes one of three forms: (1) leasing land directly from the State; (2) subleasing from an industrial-zone infrastructure developer (the most common form for foreign investors); (3) holding land-use rights via a transfer. Under form (2) – which covers the majority of manufacturing projects at VSIP, Long An, Binh Duong, and Dong Nai – the investor is dependent on the legal standing of the infrastructure developer, a factor outside its direct control.
Legal Framework
Article 36, Clause 2, Point (c) of the Law on Investment 2025 (No. 143/2025/QH15) provides that the investment registration authority terminates a project’s operation where: “The investor no longer has the right to use the investment site and does not carry out the procedure to adjust the investment site within 6 months from the date the right to continue using the investment site ceases, except for the case provided under Point (đ) of this Clause.”
In practice, the event of “no longer having the right to use the investment site” can arise from several sources: a land/factory lease expiring without renewal, the industrial-zone infrastructure developer terminating the sublease due to a dispute or restructuring, or an area zoning change that renders the site no longer compliant with its registered use. The 6-month clock runs from the date this event occurs – not from the date the investor discovers it or the date the IRC is reviewed.
Practical Guidance
Proactively track the expiry date of the land/factory lease as a legal milestone independent of the production-operation cycle – set an alert at least 12 months before expiry to allow enough time to renew or find a replacement site and complete the adjustment procedure before hitting the 6-month deadline.
For sites leased from an industrial-zone infrastructure developer, incorporate the developer’s own legal standing into periodic legal review (not only when something unusual occurs) – including the status of the industrial zone’s underlying land-use rights and any shareholder/ownership changes that could affect the validity of the sublease.
When an event causing loss of the site arises, the top priority is to file the investment-site adjustment application on the IRC as soon as a viable replacement site exists – do not wait until close to the 6-month mark, since the adjustment procedure may itself require processing time and supplementary filings.
Distinguish between “loss of site” and “land recovery” when determining the applicable ground – if the cause is a State land-recovery decision, the situation may fall within the excluded scope referencing Point (đ), with a different handling mechanism – a lawyer should determine the precisely applicable ground for each case.
Business Risks
- Third-party dependency risk: under the sublease-from-infrastructure-developer model, an investor can lose the right to use its site for reasons entirely attributable to the lessor (dispute, restructuring, insolvency) through no fault of its own – yet the 6-month deadline applies just the same.
- Dual operational disruption risk: beyond the legal risk of project termination, losing the site simultaneously disrupts actual production – these two risks typically arise together and must be managed in parallel, not sequentially.
- Procedural-timing risk: if the site-adjustment procedure carries meaningful administrative processing time (not specifically verified in this article), the actual window an investor has to act may be shorter than the nominal 6 months.
Recommendations
- Add the site-lease expiry date to the project compliance calendar, kept separate from the production-operations calendar – ranked as the highest priority.
- Periodically review the legal standing of the industrial-zone infrastructure developer for subleased projects – do not wait for a sign of trouble.
- Prepare a replacement-site contingency before the current lease expires, so a site-adjustment application can be filed promptly if needed.
- Before applying this to a specific client, add research on the site-adjustment procedure (processing time, required filings) and the boundary with Point (đ) – not covered in this article.
Frequently Asked Questions
1. From what point is “no longer having the right to use the investment site” determined? From the date the triggering event occurs (e.g., the date the lease expires or is terminated) – the 6-month clock runs from that date, not from the date of discovery or the date the authority reviews the matter.
2. If negotiations to renew the land lease are ongoing but not concluded within 6 months, is that treated as a violation? This article has not verified whether being in active negotiation/procedure counts as “carrying out the site-adjustment procedure” – this should be clarified with the registration authority or through separate advice; an exemption should not be assumed.
3. How long does the investment-site adjustment procedure take? Not verified in this article – consult implementing guidance or contact the competent registration authority directly.
4. If a company proactively relocates to expand production (not because it lost the right to use its site), does the 6-month deadline apply? No – Point (c) applies to an involuntary loss of the right to use the site. A proactive relocation for expansion is an ordinary IRC-adjustment procedure, substantively different – though it is still advisable to confirm the applicable procedure with the registration authority to avoid confusion.
Related Articles
- Termination of Investment Projects in Vietnam: 9 Risks Foreign Investors Must Know Under Article 36 of the 2025 Law on Investment – overview of the 9 grounds (pillar article) – published
- Schedule Delay Beyond 24 Months: Termination Risk Under Article 36.2(b) – published
Related Services
Legal review of investment-site standing and representation for IRC site-adjustment procedures – ECOVIS Vietnam Law.
About ECOVIS Vietnam Law
ECOVIS Vietnam Law is a member law firm of ECOVIS International, providing legal and tax advisory services to foreign investors in Vietnam, combining local legal expertise with the international standards of the ECOVIS network across more than 90 countries.
Attorney Vu Manh Quynh is the Managing Partner of ECOVIS Vietnam Law, advising international investors on Foreign Direct Investment (FDI), corporate governance, and regulatory compliance in Vietnam.
For a complimentary 30-minute consultation on the legal standing of your investment site, contact Attorney Vu Manh Quynh at vietnam@ecovislaw.com.
Disclaimer
This material is for general informational purposes only and does not constitute legal, tax, or professional advice. Investors should seek specific advice based on their business sector, ownership structure, and investment location in Vietnam. The citation to Article 36.2(c) of the Law on Investment 2025 in this article is currently held at medium-to-high confidence and should be verified by a lawyer before being applied to a specific situation. The investment-site adjustment procedure has not been fully researched in this article.
