5 Must-Know Things When Setting Up a Factory in Vietnam [Part 5]

Factory Construction in Vietnam

Hello, this is RSQUARE, a company specializing in commercial real estate data.

Following our previous post, “5 Things You Must Know When Establishing a Factory in Vietnam [Part 4] – Establishment of Foreign-Invested Enterprises and Licensing Procedures in Vietnam,” this section provides guidance on “Factory Construction in Vietnam.”

To carry out production operations in Vietnam, it is necessary to secure factory land and construct the factory. For details on land acquisition, please refer to our previous post.

Factory construction can generally be divided into two main stages: the permitting process and the construction process. First, the factory construction permitting process in Vietnam can be divided into the following 7 steps:

1. Master Planning Approval
To obtain approval, the following drawings and documents must be submitted to the Department of Planning and Architecture and the Industrial Park Management Authority:

1. Land contract and detailed planning documents (including description)
2. Investment approval certificate
3. Master Plan
4. Basic architectural drawings
5. Site area schedule

The administrative processing period is set at 40 days; however, since applications are often returned for supplementation, it is advisable to prepare with sufficient time buffer.

2. Environmental Impact Assessment (EIA)
To operate in Vietnam, companies must go through several licensing procedures, among which the Environmental Impact Assessment has recently become one of the most stringent. The process generally takes about 6 weeks, but since permitted industries vary depending on the region and industrial park, it can be difficult to obtain approval within the required timeframe without experienced consultants.

Therefore, one option is to request recommendations for qualified service providers from the industrial park management authority. Alternatively, it is advisable to consult existing companies within the same industrial park for referrals to experienced firms.

The administrative processing period for the EIA is 45 days, and the required documents include:

1. Master Plan
2. Basic architectural drawings
3. Site area schedule
4. Investment approval certificate
5. Project description
6. Environmental Impact Assessment report

3. Fire Fighting Approval
Similar to Korea, fire safety approval standards vary depending on the intended use of the facility. Construction companies are generally well aware of these requirements, so major issues are uncommon. However, during inspections, there may be potential additional costs incurred.

To obtain fire fighting approval, the following documents must be submitted, with an administrative processing period of 15 days:

1. Site layout plan
2. Area schedule
3. Floor/elevation/section drawings
4. Fire protection/mechanical/electrical drawings
5. Bill of Quantities (BOQ)
6. Fire protection design documents (including description)

4. Third-Party Design Review (Technology Design Report)
This step is not a direct licensing process but involves engaging an independent third-party professional organization to review the design and verify whether there are any issues.

The required documents are as follows, with an administrative processing period of 20 days:

1. Architectural/structural drawings
2. Fire protection/mechanical/electrical drawings
3. Project approval decision by the project owner
4. Technical specifications
5. Construction design drawings (including description)
6. Basic design review results

5. Technology Design Assessment
To obtain approval for the technical design assessment, the following documents must be submitted, with an administrative processing period of 40 days:

1. Architectural/structural drawings
2. Fire protection/mechanical/electrical drawings
3. All documents submitted during the third-party design review stage

6. Construction Approval
This is the final approval, encompassing all previously obtained approvals, allowing the overall construction activities to proceed.

To obtain construction approval, the following documents must be submitted, with an administrative processing period of 10–20 days:

1. Architectural/structural drawings
2. Fire protection/mechanical/electrical drawings
3. Completed construction design review drawings
4. Construction permit application form
5. Fire safety approval certificate
6. Environmental impact assessment certificate
7. Planning approval certificate
8. Geotechnical survey report
9. Construction design review result documents

Once the construction permit is obtained, construction can proceed in accordance with the approved scope. The construction process itself is not significantly different from that in Korea, so detailed explanations are omitted.

Typically, constructing a single-story factory with an area of approximately 1 hectare requires about 3 months for permitting and 7 months for construction. However, the actual timeline may vary depending on the contractor’s capability and seasonal factors.

Construction costs vary depending on ground conditions and finishing materials, but generally range from USD 250 to 350 per square meter.

In addition, RSQUARE provides brokerage services for offices, leased factories, and industrial parks completely free of charge.

This is a unique policy of RSQUARE aimed at supporting all Korean companies entering Vietnam.

We would like to express our sincere appreciation to the team at Top Construction for their valuable support and consultation in preparing this post.

http://www.topenc.asia/

For information on offices, factories, and industrial parks in Vietnam, please visit Rsquare.

About RSQUARE VN

RSQUARE Vietnam operates a nationwide commercial real estate data platform, staffed entirely by in-house professionals. In addition to Korean companies, RSQUARE also serves local Vietnamese businesses and various global clients from Japan, China, Europe, and beyond. Its services include real estate brokerage, corporate housing leasing, visa support, and settlement services for businesses entering Vietnam