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.

The licensing and approvals phase of a Vietnam factory setup project is where most project delays originate — and where most legal risk concentrates. The challenge is not the difficulty of any individual approval; it is the interaction between multiple sequential approvals, issued by different authorities on different timelines, where a delay or sequencing error in any one approval cascades through the entire project plan.

This article covers the 10 most important questions about licensing, approvals and regulatory compliance during the factory setup phase — from IRC application through to production commencement clearance.

Q31. What is the correct sequence of approvals for a foreign-invested manufacturing factory in Vietnam?

The complete approval sequence for a standard greenfield manufacturing project in an industrial park is:

1. Site selection + land commitment: Identify the industrial park and plot; obtain a land commitment letter from the developer (required for IRC application)
2. IRC application and issuance: Investment Registration Certificate from the IPA (for in-park projects) or DPI (for out-of-park projects). Statutory timeline: 15 working days for non-conditional projects
3. ERC application and issuance: Enterprise Registration Certificate from the Business Registration Office. Typically 3–5 working days after IRC issuance
4. Tax registration: Obtain tax code from provincial Tax Department. Required before any financial transactions
5. EIA preparation and approval (if required): Environmental Impact Assessment submitted to MONRE or provincial DONRE. Must be approved BEFORE construction commences
6. Construction permit: Submitted to provincial Department of Construction or IPA. Requires fire safety design documents and environmental approval
7. Factory construction: Only after construction permit issuance
8. Fire safety acceptance: Post-construction acceptance by provincial Fire Police. Required BEFORE production commences
9. Environmental Licence: Post-construction issuance confirming wastewater treatment, air emission and waste management systems are operational
10. Company operational registrations: Company seal, electronic invoice system, DICA bank account, social insurance registration, customs registration (for EPE factories)
11. Production commencement: Legal production start — with all above approvals in place

The most critical sequencing rule: Steps 5 (EIA), 6 (construction permit) and 8 (fire safety acceptance) must happen in sequence — they cannot overlap. Construction cannot begin before EIA approval. Production cannot begin before fire safety acceptance. Many project timelines that model these approvals as parallel activities are fundamentally incorrect.

Q32. What documents are required for an IRC application in Vietnam?

The IRC application document set for a standard industrial park project is specified in Decree 31/2021/ND-CP (Annex II-6). The required documents are:

Application form: Per the prescribed form in Decree 31/2021, stating the investor’s details, investment project objectives, total capital, location and implementation schedule.

Investor identity documents:

• For corporate investors: Certified copy of business registration certificate (apostilled and notarially translated into Vietnamese); audited financial statements for the most recent 2 years demonstrating financial capacity; bank solvency letter confirming ability to fund the investment; board resolution authorising the investment; power of attorney for the authorised representative
• For individual investors: Certified copy of passport; evidence of financial capacity

Investment project proposal: A substantive document (typically 20–40 pages) covering: investment objectives and rationale; market analysis; production plan; investment capital structure (charter capital and loan components); technology description; environmental management approach; and implementation schedule with phased milestones

Land commitment letter: Formal letter from the industrial park developer confirming that land is available for the investor’s project and committing to enter into a sub-lease agreement subject to IRC issuance

Sector-specific documents (for conditional sectors): Pre-approval from the relevant ministry confirming that the investor’s sector qualifies for FDI under applicable conditions

Common documentation errors that extend processing time:

• Business registration certificate not apostilled (must be authenticated by Vietnamese embassy or apostille authority in the investor’s home country)
• Financial statements not certified by an independent auditor
• Investment project proposal that does not address the environmental management section
• Power of attorney not notarised and legalised
• Vietnamese translations not performed by an authorised translator

Q33. What is the statutory timeline for IRC approval and what are the realistic processing times?

The Investment Law 2020 and Decree 31/2021 establish the following statutory timelines:

• Standard projects (not requiring investment policy approval): 15 working days from receipt of a complete application
• Conditional sector projects (requiring ministry-level opinion): 30 working days, plus the time for the relevant ministry to provide its opinion (typically 7–10 working days)
• Projects requiring investment policy approval (National Assembly or Prime Minister level): 30–45 working days after policy approval is obtained

Realistic processing times (ECOVIS Vietnam Law practice experience):

• Well-prepared standard applications in VSIP, Amata or Deep C (IPAs with strong administrative capacity): 3–4 weeks from first submission
• Standard applications in provincial IPAs with higher processing loads: 5–8 weeks
• Applications requiring re-submission due to documentation deficiencies: add 2–4 weeks per re-submission cycle
• Conditional sector applications (requiring ministry opinion): 8–12 weeks from first submission

The critical variable is first-submission completeness. Applications that are returned for corrections — even minor ones — restart the clock and add weeks to the timeline. This is where experienced legal counsel provides the most direct value: ensuring complete, correctly formatted applications that are accepted on first submission.

Q34. Which authority approves the IRC for a manufacturing project in Vietnam?

The IRC-issuing authority depends on the project’s location and scale:

For projects within industrial parks (most common): The Industrial Park Management Authority (IPA — Ban Quản lý Khu công nghiệp) of the relevant province issues the IRC under delegated authority from the provincial DPI. The IPA is the single-window authority for in-park foreign investment projects and handles IRC issuance, amendment and reporting functions.

For projects outside industrial parks: The provincial Department of Planning and Investment (DPI) issues the IRC.

For large or strategically significant projects: Projects above the investment scale thresholds specified in the Investment Law (currently VND 20 trillion / approximately USD 800 million for manufacturing), or projects in sectors listed as requiring Prime Minister-level approval, involve the Ministry of Planning and Investment (MPI) in the IRC process.

Common mistake: Submitting the IRC application to the DPI when the project is in an industrial park (the IPA has jurisdiction), or vice versa. This does not simply delay the application — the incorrect authority cannot process it and must redirect it, adding time. A project in Song Than Industrial Park (Binh Duong) is processed by the Binh Duong IPA, not the Binh Duong DPI.

Q35. What triggers an Environmental Impact Assessment (EIA) and how long does it take?

The threshold criteria for EIA requirements are set out in Appendix III of Decree 08/2022/ND-CP, which implements the Law on Environmental Protection 2020. The EIA threshold criteria include:

• Investment scale: Projects with total investment above defined thresholds (varies by sector — typically VND 500 billion / approximately USD 20 million for manufacturing)
• Production capacity: Facilities producing above defined quantities (e.g., food processing above 500 tonnes/day, chemical manufacturing above defined tonnage)
• Waste generation: Facilities generating industrial wastewater, hazardous waste or significant air emissions
• Environmental sensitivity of location: Projects near rivers, lakes, protected areas or residential zones face lower EIA thresholds

EIA timeline breakdown:

• Baseline environmental surveys: 4–8 weeks
• EIA report preparation by licensed environmental consultant: 8–12 weeks
• Public consultation (mandatory for projects in Appendix III of Decree 08/2022): 4–6 weeks (can overlap with report preparation)
• Government appraisal: 45 working days for MONRE; 30 working days for provincial DONRE
• Query response and re-submission (common): 4–8 weeks
• Total realistic timeline: 5–8 months for a standard manufacturing EIA

Practitioner note: The EIA must be approved, not merely submitted, before construction begins. Projects that submit the EIA and begin site preparation before approval — on the assumption that approval is assured — face enforcement risk. Even if the EIA is ultimately approved, pre-approval construction can be treated as a violation by the environmental authority.

Q36. What is the construction permit process for a factory in Vietnam?

Factory construction permits are governed by the Construction Law 2014 (amended by Law No. 62/2020/QH14) and Decree 15/2021/ND-CP on construction management. The key requirements are:

Required documents for the construction permit application:

• Construction permit application form
• Land use documentation (sub-lease agreement for in-park projects)
• Architectural design drawings certified by a licensed Vietnamese design firm
• Structural calculation documents
• MEP (mechanical, electrical, plumbing) design documents
• Fire safety design approval certificate (from Fire Police — this must be obtained before construction permit)
• Environmental approval (EIA approval certificate, where required)

Issuing authority: For in-park projects, the IPA typically handles the construction permit as part of the single-window service. For out-of-park projects, the provincial Department of Construction issues the permit.

Statutory processing time: 20 working days for standard factory buildings.

Common complication — design certification: Architectural designs for factories in Vietnam must be certified (thẩm tra thiết kế) by a licensed Vietnamese design verification entity before the construction permit can be issued. Foreign architectural firms designing the factory must work through a licensed Vietnamese partner for the certification step. This is a frequently underestimated timeline item — design certification adds 3–6 weeks to the construction permit process.

Q37. What fire safety approvals are required for a factory in Vietnam?

Fire safety compliance for factories involves two distinct approval phases:

Phase 1 — Pre-construction design approval: Before construction begins, fire safety design documents must be submitted to and approved by the provincial Fire Police (Cảnh sát PCCC). Approval confirms that the factory design complies with National Technical Regulation QCVN 06:2022/BCA (fire safety for buildings) and relevant TCVN standards. The fire safety design must cover: structural fire resistance, active suppression systems (sprinklers, where mandatory), detection systems, emergency exits and evacuation routes, firefighting water supply and fire access road dimensions. Processing time: 10–15 working days (statutory), 4–6 weeks in practice.

Phase 2 — Post-construction acceptance inspection: After construction is complete and fire safety systems are installed and commissioned, the Fire Police must inspect the factory and issue an acceptance certificate (biên bản nghiệm thu phòng cháy chữa cháy) before production commences. The acceptance inspection involves a physical site inspection, system testing (sprinkler activation, detector sensitivity, emergency lighting) and documentation review (system commissioning records, equipment certificates). Processing time: 10–15 working days after application; physical inspection slot availability adds 4–8 weeks of queue time in high-activity industrial zones.

Common deficiencies found at acceptance inspection:

• Fire access road width or turning radius below the QCVN requirement (must be ≥3.5m for one-way access, ≥7m for two-way)
• Firefighting water storage insufficient for the factory’s risk category
• Sprinkler coverage gaps in mezzanine or storage areas added during construction
• Missing or non-certified commissioning records for fire safety systems
• Emergency exit signage non-compliant with Vietnam standards

Q38. Can a foreign company import and install machinery before receiving the ERC?

No. This is an absolute rule with significant practical implications for project timelines.

Customs import clearance for machinery requires:

• A valid Enterprise Registration Certificate (ERC) — the customs importer of record must be a legally registered Vietnamese entity
• A tax code — issued only after ERC issuance
• Customs registration — the company must be registered in the VNACCS/VCIS customs system before filing import declarations

None of these can exist before ERC issuance. Therefore, no machinery can be legally imported in the company’s name until after the ERC is issued and tax/customs registrations are completed.

The project timeline implication: The IRC and ERC approval sequence adds 6–10 weeks to the project critical path before machinery procurement can begin with Vietnamese customs clearance. Investors who sign machinery supply contracts with delivery dates that assume immediate import after the investment decision will routinely face machinery sitting in port awaiting import clearance while the ERC is processed.

Possible workarounds (with limitations):

• Bonded warehouse storage: Machinery can be imported into Vietnam and stored in a customs-bonded warehouse (kho ngoại quan) before the ERC is issued. The machinery enters bonded storage rather than the domestic customs territory. The ERC-registered company then customs-clears the machinery from bonded storage after registration is complete. This avoids port demurrage but adds bonded storage costs and a second customs clearance step.
• Advance equipment procurement offshore: Equipment can be procured and stored in a third-country logistics hub pending ERC issuance and direct shipment to Vietnam after customs registration is in place.

Q39. What sector-specific approvals are required beyond the IRC and ERC?

In addition to the standard IRC/ERC and construction/environmental approvals, many manufacturing sectors require additional sector-specific approvals. These must be identified and planned for at the project feasibility stage:

Food and beverage manufacturing: Food safety certification from the Ministry of Health (MoH) or Ministry of Agriculture and Rural Development (MARD), depending on the product category. GMP (Good Manufacturing Practice) certification for certain categories. Product registration for specific food categories.

Pharmaceutical and medical device manufacturing: GMP certification and manufacturing licence from the Ministry of Health — a lengthy process that typically takes 12–18 months and requires demonstration of facility readiness, quality systems and trained personnel.

Chemical manufacturing: Chemical safety declarations (bản khai báo hóa chất) for hazardous chemicals above threshold quantities (Decree 113/2017/ND-CP). Special chemical manufacturing licences for precursor chemicals.

Automotive manufacturing and assembly: Type approval from the Ministry of Transport for each vehicle model. Vehicle safety testing certification. This is a time-consuming process — automotive manufacturers typically plan 12–24 months for initial type approval on new models.

Electronics manufacturing: While most electronics assembly does not require specific manufacturing licences, products sold in Vietnam must meet technical standards and obtain quality certification (QCVN certification) from the Ministry of Information and Communications or Ministry of Science and Technology, depending on the product category.

Radiation-emitting equipment manufacturing: Licences from the Vietnam Agency for Radiation and Nuclear Safety (VARANS) under the Ministry of Science and Technology.

Q40. What happens if the approved project scope needs to change after IRC issuance?

The IRC is a dynamic document — it must reflect the current state of the approved investment project at all times. Significant changes to the investment project require IRC amendment before implementation.

Changes that require IRC amendment:

• Increase in total investment capital (most common — for production expansion, additional equipment)
• Addition of new product lines or manufacturing categories not covered in the original IRC
• Increase in approved production capacity above the IRC’s stated figures
• Extension of the implementation schedule (if milestones cannot be met within the approved schedule)
• Change in investment location (additional production site, relocation)
• Change in investor identity (capital transfer to a new investor)
• Change in investment form (e.g., adding a joint venture partner)

Changes that do NOT require IRC amendment:

• Minor capital increases within the approved total investment capital
• Changes to production methods or equipment within the same product category
• Changes to the company’s internal organisation (management restructuring, personnel changes)

The enforcement risk: Operating outside the approved IRC scope — even with an amendment application already submitted — constitutes a violation of the Investment Law and is subject to administrative fines under Decree 122/2021/ND-CP. The amendment must be issued and in hand before the expanded activity commences. “We submitted the amendment application” is not a defence to a violation finding.

Practical approach: Investors should build flexibility into the original IRC where possible. For example: approving a production capacity range (“annual capacity of 500,000 to 2,000,000 units”) rather than a fixed figure; approving a broad product category (“electronics components and assemblies”) rather than a narrow product list; and approving a capital range with the upper bound representing planned expansion capital. This flexibility reduces the number of IRC amendments required over the project lifecycle.