Guidance on Valuing Annual Land-Rental Rights in State-Owned Enterprise Equitization
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Based on:Nghị định số 57/2026/NĐ-CP - Ministry of Finance
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The Ministry of Finance provides guidance on Article 32(d2) of Decree No. 57/2026/ND-CP regarding the valuation of annual land-rental rights in the enterprise value for establishing the starting price of equitization share auctions. The value of annual land-rental rights is included in enterprise value and must be determined by a qualified valuation consultant using methods consistent with valuation standards. The computed value must not be less than: the remaining lease term multiplied by the positive difference (if any) between the market rental determined by the consultant at the time of valuation and the actual rent currently being paid. Importantly, where the remaining lease term is less than 5 years, it must be treated as 5 years (a statutory minimum floor). The Ministry's example: if 3 years remain on the lease contract, calculate as if 5 years remain.
Valuing Annual Land-Rental Rights in SOE Equitization
Responding authority: Ministry of Finance Date of inquiry: 2 April 2026 Legal basis: Decree No. 57/2026/ND-CP on state capital restructuring in enterprises
Rule at Article 32(d2) of Decree 57/2026/ND-CP
'The value created by annual land-rental rights shall be determined by a valuation consultant using methods consistent with valuation standards but must not be less than the value determined based on the remaining lease term and the positive difference (if any) between the rental calculated using the land price determined by the consultant at the time of establishing the starting price and the rental currently paid by the enterprise being equitized.'
'Where the remaining lease term is less than 5 years, the remaining lease term shall be deemed to be 5 years.'
Ministry of Finance Guidance
Purpose: The annual land-rental right value is included in enterprise value for establishing the starting price in the initial share auction.
Determination method:
- A qualified valuation consultant applies valuation standards
- Minimum floor = Remaining lease term × Positive difference (if any) between:
- Market rental determined by consultant at time of valuation
- Actual rental currently paid
Special rule on minimum term:
- If remaining lease term ≥ 5 years: use actual remaining years
- If remaining lease term < 5 years: treat as 5 years
Ministry's illustrative example: If the lease contract has 3 years remaining, the remaining lease term for calculation purposes is 5 years (not 3 years).
Formula: Annual land-rental right value = MAX(Valuation consultant's figure, Remaining term (min. 5 years) × (Market rental - Actual rental paid))