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?

The correct sequence is: (1) Site selection + land commitment letter; (2) IRC issuance from IPA/DPI; (3) ERC issuance from Business Registration Office; (4) Tax registration; (5) EIA approval — mandatory BEFORE construction; (6) Fire safety design approval; (7) Construction permit; (8) Factory construction; (9) Fire safety acceptance inspection — mandatory BEFORE production; (10) Environmental Licence; (11) Operational registrations (seal, e-invoices, customs, labour); (12) Production commencement. Each step is a prerequisite for the next.

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?

Statutory timelines under Decree 31/2021: 15 working days for standard projects; 30 working days for conditional sector projects requiring ministry opinion. In practice: 3–4 weeks for well-prepared applications in established industrial parks (VSIP, Amata, Deep C); 5–8 weeks in provincial IPAs with higher processing loads; 8–12 weeks for conditional sector applications. The critical variable is first-submission completeness — applications returned for corrections restart the clock. Experienced legal counsel materially reduces processing time.

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?

No. Customs import clearance requires a valid ERC, tax code and customs registration — all of which are only available after ERC issuance. No machinery can be legally imported in the company’s name before the ERC is issued. The workaround is bonded warehousing (kho ngoại quan): machinery arrives in Vietnam and enters bonded storage, where it remains in customs limbo until the company completes ERC and customs registration and formally clears it. This avoids port demurrage but adds bonded storage costs and a second customs clearance step.

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.