Mercedes-Benz Vietnam has land lease in Ho Chi Minh City extended
Mercedes-Benz Vietnam has land lease in Ho Chi Minh City extended
A car assembly factory in Go Vap District, Ho Chi Minh City operated by Mercedes-Benz Vietnam Co. Ltd., a joint venture between world-renowned carmaker Mercedes-Benz Group AG and Vietnam’s Saigon Transportation Mechanical Corporation (SAMCO), has had its land lease extended by five years, starting April 14 next year, according to Deputy Prime Minister Tran Hong Ha’s decision.
The Vietnamese government has decided to extend Mercedes-Benz Vietnam’s land lease in Ho Chi Minh City by five years until 2030. Photo: Ai Nhan / Tuoi Tre |
The plant covers 10.5 hectares at 693 Quang Trung Street in Go Vap District. The site, listed as public land, is managed by SAMCO.
Under the decision, the Ho Chi Minh City People’s Committee will direct the municipal Department of Planning and Investment to adjust the investment registration certificate for Mercedes-Benz Vietnam to extend its operation by five years, starting April 14 next year.
The municipal administration was also told to ask the company to complete all of its financial obligations over annual land rental for the new lease term in line with prevailing land regulations to ensure there are no losses for the state budget.
Besides, Mercedes-Benz Vietnam must submit a document to pledge to remove all of its production and business activities out of the site after the land lease comes to an end on April 14, 2030.
At a meeting in mid-September, the Ministry of Planning and Investment, the Ministry of Natural Resources and Environment, the Ministry of Finance, and other relevant agencies reached a consensus on the extension.
Mercedes-Benz AG Group holds a 70-percent stake at Mercedes-Benz Vietnam, while SAMCO owns the remaining 30 percent in the form of land ownership rights.
The car assembly plant was licensed in 1995 and Mercedes-Benz Vietnam was allowed to use the land lot for 30 years from April 1995 until 2025.
In 2021, Mercedes-Benz Vietnam proposed extending the land use by five years until 2030 to ensure that it could proactively map out a new production plan and shift its activities to a new location in 2030.
However, its proposal was shelved at that time due to some legal hindrances over investment, land use, and public asset management aspects.
Mercedes-Benz Vietnam has enjoyed positive growth and provided jobs for some 800 workers.
It submitted VND5.5 trillion (US$220 million) a year to the city’s budget from 2017 to 2021, according to the municipal Department of Planning and Investment.
