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 is where most Vietnam factory project delays originate. The challenge is not complexity in any individual approval — it is the mandatory sequential structure of a multi-authority approval chain where a delay or sequencing error cascades through the entire project plan. Understanding exactly which approval unlocks the next, and which authority issues each, is the most important operational knowledge for any investor in the early setup phase.

This article is Section IV of the 100 FAQ about Factory Setup Vietnam series. It covers questions Q31–Q40.

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

A foreign manufacturing project in Vietnam usually requires several layers of approval and registration. These may include an Investment Registration Certificate, Enterprise Registration Certificate, tax registration, bank and direct investment capital account setup, e-invoice registration, customs registration and, depending on the project, environmental approvals, construction permits, fire prevention approvals, labour registrations and sector-specific licenses.

The exact licensing package depends on the manufacturing activity, location, industrial zone, land or factory lease structure, environmental impact, construction plan, machinery, raw materials, import-export activities and workforce plan. Investors should map all required approvals before committing to a site, production launch date or customer delivery schedule.

What documents are required for an IRC application in Vietnam?

For industrial park projects: (1) Application form per Decree 31/2021 Annex II-6; (2) Investor identity documents — business registration certificate (apostilled), audited financial statements (2 years), bank solvency letter, board resolution, power of attorney; (3) Investment project proposal covering objectives, capital structure, technology, environmental approach and implementation schedule; (4) Land commitment letter from the industrial park developer; (5) Sector-specific pre-approval documents for conditional sector projects.

What is the statutory timeline for IRC approval and what is the realistic processing time?

Investment licensing timelines vary by project, sector, location, document quality and authority review practice. Straightforward projects in established industrial zones may be processed more efficiently, while projects involving land, construction, environmental impact, regulated products, special technology, high capital value or complex ownership structures may require additional review.

Investors should distinguish between incorporation timing and operational readiness. Even after IRC and ERC issuance, the company may still need banking, tax, e-invoice, labour, customs, environmental, construction and fire safety steps before it can operate legally. Any timeline should therefore be prepared as a project implementation schedule, not merely as an incorporation estimate.

Common causes of licensing delay include unclear investment objectives, incomplete investor documents, inconsistent capital information, unsuitable project location, industrial zoning issues, environmental concerns, insufficient financial evidence, unclear manufacturing processes, technology-related questions and mismatch between the project proposal and lease documents.

Delays may also arise when authority practice changes or when multiple authorities must coordinate comments. For foreign investors, overseas corporate documents may require legalization, translation or notarization, which should be planned early. A properly prepared licensing file should align the investment project, enterprise structure, location, environmental classification, capital plan and implementation schedule before filing.

Which authority approves the IRC for a manufacturing project?

For projects within industrial parks, the Industrial Park Management Authority (IPA — Ban Quản lý Khu công nghiệp) issues the IRC under delegated authority from the provincial DPI. For projects outside industrial parks, the provincial DPI issues the IRC. For large projects above defined capital thresholds, or projects in sectors requiring Prime Minister-level approval, the Ministry of Planning and Investment is involved. Submitting to the wrong authority — a common mistake — does not simply delay processing; the incorrect authority cannot process the application.

What triggers an Environmental Impact Assessment and how long does it take?

Under Law on Environmental Protection 2020 (Law No. 72/2020/QH14) and Decree 08/2022/ND-CP, an EIA is required for projects meeting defined thresholds based on investment scale, production capacity and sector. Most medium-to-large foreign manufacturing projects require a full EIA. The total realistic EIA timeline is 5–8 months: consultant preparation (3–4 months) + government appraisal (45 working days for MONRE, 30 for DONRE) + query/re-submission cycle (4–8 weeks). EIA must be APPROVED before construction commences.

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

Construction permits for factories are governed by Construction Law 2014 (amended 2020) and Decree 15/2021/ND-CP. Required documents: architectural design plans certified by a licensed Vietnamese design firm; structural calculations; MEP design documents; fire safety design approval (from Fire Police); environmental approval; and land use documentation. Statutory processing time: 20 working days. Fire safety design certification and architectural design verification (thẩm tra) add 3–6 weeks to the construction permit process in practice.

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

Two phases: (1) Pre-construction design approval — fire safety design documents submitted to and approved by the provincial Fire Police (Cảnh sát PCCC) before construction begins; and (2) Post-construction acceptance — Fire Police physical inspection and issuance of acceptance certificate before production commences. Common inspection deficiencies: fire access road dimensions, firefighting water storage, sprinkler coverage gaps in mezzanine or storage areas, and commissioning documentation gaps. Post-construction acceptance adds 2–4 months in active industrial provinces.

Can a foreign company import machinery before receiving the ERC?

Not necessarily. IRC and ERC issuance does not automatically authorize construction or production. Depending on the project, construction may require environmental procedures, fire prevention design approval, construction permits, technical design review, industrial zone approval and other project-specific conditions.

Starting construction before completing required approvals can create administrative risk, delay final acceptance or affect the company’s ability to operate legally. Investors should sequence approvals carefully and confirm current authority practice before starting construction, renovation or machinery installation.

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

Sector-specific approvals include: food manufacturing — food safety certification from MoH or MARD; pharmaceutical manufacturing — GMP certification and MOPH manufacturing licence (12–18 months); chemical manufacturing — chemical safety declarations under Decree 113/2017; automotive manufacturing — Ministry of Transport type approval for each vehicle model; electronics — QCVN product certification for Vietnam market sales; radiation-emitting equipment — VARANS licence from Ministry of Science and Technology. Identify all sector-specific requirements at project feasibility stage.

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

Changes to investment project scope require IRC amendment before implementation. Amendment triggers include: total capital increase, new product lines, production capacity expansion, implementation schedule extension, change in investment location, and investor identity change. Operating outside the approved IRC scope — even with an amendment application submitted — is a violation of Investment Law 2020 subject to fines under Decree 122/2021/ND-CP. Build scope flexibility into the original IRC: use capacity ranges rather than fixed figures, and broad product category descriptions rather than narrow product lists.