In Vietnam, golf is gaining in popularity, and the country is also becoming a popular destination for golfing vacationers. The country has about 35 courses in operation and many more in the pipeline. Most of the courses are found on the outskirts of major cities like Hanoi and Ho Chi Minh City, or near resort areas such as Da Nang, Nha Trang, Vung Tau and Dalat.
New legislation has been passed to help clarify the regime for investment in golf course projects, and to help ensure the prompt completion of projects and efficient use of land. Specifically, On April 27, 2020, the government of Vietnam issued Decree No. 52/2020/ND-CP on investment in construction and commercial operation of golf courses (Decree 52). This decree will come into effect on June 15, 2020.
According to Decree 52, the area of a standard 18-hole golf course must not exceed 90 hectares (not more than 5 hectares per hole, on average), and the area of a newly built golf course project must not exceed 270 hectares (54 holes). The investor must complete the construction of a golf course within a maximum of 36 months for an 18-hole course, or a maximum of 48 months for other types of golf courses, from the date of issuance of the land lease decision.
Moreover, an investor implementing a golf course project must:
- Satisfy the conditions on financial capacity and the conditions on land lease and/or permission to convert land use purpose for implementing the golf course project in compliance with the laws on land; and pay a deposit for the assurance of project implementation (for cases requiring such deposit) in compliance with the laws on investment;
- Provide appropriate solutions, plans, and commitments relating to resettlement, training, and employment assistance for the current users of land expected to be used for the golf course project and local laborers; and
- Ensure the fulfillment of necessary requirements and conditions relating to transport, electricity, and water infrastructure, wastewater treatment, and environmental protection.
Decree 52 also provides a list of types of land which are not permitted to be used for construction of golf courses and auxiliary works, which includes the following:
- Land used for the purposes of national defense and security;
- Forest land and rice paddy land (with limited exceptions);
- Land located in areas containing original constituents of classified cultural and historical sites or classified beauty spots, or relics included in the inventory list of provincial People’s Committees (with limited exceptions);
- Land for construction of industrial parks, industrial clusters, concentrated IT parks, and high-tech parks;
- Land located inside the protected areas of dikes and coastal protection corridors in accordance with Law on Dikes and the Law on Natural Resources and Environment of the Sea and Islands.
In addition, investors are prohibited from taking the following actions related to investment in construction and commercial operation of golf courses:
- Building or operating golf courses without having met the conditions and procedures prescribed by Decree 52 and other related laws;
- Taking advantage of the operations of golf courses to organize illegal betting or gambling activities;
- Obstructing or failing to comply with examination and inspection by competent state management agencies in accordance with the law; and
- Failing to provide information or failing to report as requested by competent state management agencies in accordance with the law.
Golf has been developing quickly in many regions of Vietnam, and it is expected that Decree 52 will help accelerate investment further, while minimizing any negative impacts.
For more details on Decree 52, please contact us at [email protected].