Procedures for establishment and construction of a factory in Vietnam - Delco Construction

Procedures for establishment and construction of a factory in Vietnam

In order to legally establish a company and implement a factory construction project in Vietnam, investors need to carry out the procedures, namely investment registration, business registration, land lease procedures, applying for environmental protection permits, fire protection permits, construction permits, etc.

Procedures for establishing a business and renting industrial real estate in Vietnam

Procedures for applying for an Investment Registration Certificate

Investors apply for an investment registration certificate according to the guidance of the Investment Law 2022, the dossier includes the following documents:

    • A written request for the implementation of the investment project (according to the form); 
    • Copy of identity card; copy of certificate of incorporation or document confirming legal status;
    • Investment project proposal; 
    • A copy of the document proving the investor’s financial capacity; 
    • A proposal for land use demand; 
    • Explanation of technology use (if any)
  • BCC contract for investment projects in the form of BCC contract.

Before applying for an Investment Registration Certificate, foreign investors must make an online declaration on the National Investment Information System at http://fdi.gov.vn.

A few special, very large-scale and complex projects such as nuclear power plant construction projects, projects with capital of 5,000 billion VND or more, projects using technologies restricted from transfer, etc., do not follow procedures of applying for the investment registration certificate, and are required to apply for the approval of investment policy from the National Assembly, the Prime Minister or the provincial People’s Committee.

Procedures for business registration and company establishment in Vietnam

Investors prepare 01 set of documents including:

  • Application for Business Registration (according to the form); 
  • Draft charter of company; 
  • List of members for two-member limited liability companies, founding shareholders for joint stock companies; 
  • Copy of identity card; copy of certificate of incorporation or document confirming legal status; 
  • the decision on capital contribution and appointment of a manager; List of authorized representatives; 
  • Investment registration certificate

See more: Procedures for establishing a company for foreign investors

Completing procedures for industrial real estate

Procedures for industrial real estate rental 

Industrial factories are only allowed to be built on land of industrial parks, land of production and business establishments, land for production of construction materials, mining of minerals, production of non-agricultural services, etc.

Renting land in an industrial park 

Depending on the policy in each industrial park or each industrial cluster, export processing zone has different regulations and instructions on procedures, basically including 4 steps:

Step 1: Make a land lease dossier; Sign a deposit contract to keep the land. This is also a stepping stone for investors to have time to prepare dossiers, documents and plans to apply for an investment license in Vietnam;

Step 2: The competent authority will review the documents and guide the completion of procedures for licensing, land allocation and land lease;

Step 3: Sign the official land lease contract;

Step 4: The investor pays the remaining rent.

Renting land that is not located in an industrial zone 

Residential land and agricultural land are not permitted to build industrial factories. In case investors want to build factories on these lands, it is mandatory to carry out procedures for conversion of land use purposes:

Step 1: Prepare and submit documents to the Department of Natural Resources and Environment where the land is used. The document includes: 

  • Application for conversion of land use purpose (according to form) 
  • Certificates of land use rights 

Step 2: Pay the fee according to the Tax Authority’s Notice of Land Use Fee Payment. 

Step 3: Receive a decision on permission to change the land use purpose.

Procedures for applying for permission to build a factory in Vietnam

After completing the procedures for investment registration, business establishment in Vietnam and industrial real estate lease, the investor selects a suitable design-build contractor.

The investor should carry out the following procedures for applying for a construction permit after selecting the most suitable design-build contractor and having the final technical design plan to submit an application for construction permit. At the same time, a quality construction contractor in Vietnam can advise and assist investors in completing construction permit procedures faster, ensuring the legality and quality of construction in the future.

Environmental protection procedures

Large-scale projects with wastewater and exhaust gas treatment systems, etc., which have the potential to adversely affect the environment, land and water resources, etc., are mandatory for the investor to make an environmental impact assessment report or an environmental protection plan to apply for an Environmental Permit.

Projects in the form of production, business and services that pose a risk of causing environmental pollution with small scale and capacity, such as  construction material factories with a capacity of less than 50,000 tons of products/year; confectionery processing factories with a capacity of less than 20,000 tons/year; cooking oil, sugar and milk processing factories with a capacity of less than 10,000 tons/year; textile dyeing and garment projects with a capacity of less than 5,000 tons/year, etc. are not required to apply for the approval of an environmental impact assessment report. In these projects, investors only need to carry out procedures to confirm the environmental protection plan and apply for an Environmental Permit.

Dossier of environmental impact assessment (EIA)

Dossier of EIA appraisal:

  • 01 request for appraisal of the environmental impact assessment report (according to the form); 
  • 07 environmental impact assessment reports of the project. 
  • 01 feasibility study report or investment project report.

Dossier to submit for approval after EIA appraisal with approval results:

  • 01 request for approval of the environmental impact assessment report. 
  • The complete EIA report is bound in a hardback, including the signature of the project owner on each report page.

Dossier of confirmation of environmental protection plan 

  • 03 copies of the environmental protection plan (according to the form) 
  • 01 investment report or production, business or service plan.

Dossier of application for an environmental permit 

  • A written request for an environmental permit (according to the form); 
  • Report on proposal for environmental permit; 
  • Other legal and technical documents of the investment project.

Apply for a fire protection permit 

Dossier of application for approval of fire protection design includes: 

  • Written request for consideration and comments on fire protection solutions of the investor (according to the form) 
  • Investment registration certificate 
  • Certificate of eligibility for fire protection service business of the design consultancy on fire protection
  • Drawings and explanations of the basic design showing the required contents of fire protection solutions 
  • Estimation of construction works 
  • Drawings and explanations of technical design or construction drawing design showing the required contents of fire protection

Dossier of acceptance of fire protection includes: 

  • A copy of the design appraisal dossier on fire protection, stamped by the Fire Police Department; 
  • A copy of the inspection certificate of fire prevention equipment; 
  • Minutes of testing, partial acceptance and overall acceptance of the fire protection system; 
  • As-built drawings of the fire protection system and related items in accordance with the approved design documents; 
  • Documents and procedures to guide the operation and maintenance of fire protection equipment and systems; 
  • Documents on acceptance and completion of items and systems related to fire protection; 
  • A copy of the certificate of eligibility for fire protection service business of the supervision consultant (if any), the construction and installation of the fire protection system.

A dossier of application for a fire protection certificate includes: 

  • An application form for the “Certificate of eligibility for fire protection” (according to the form); 
  • A certified copy of the certificate of competence in fire protection; Documents on acceptance of fire protection; 
  • A list of all equipment for fire protection and equipped life-saving means (according to the form); 
  • Fire fighting plans; 
  • The decision on the establishment of the core fire protection team together with the list of individuals who have passed the training on fire protection.

Procedures for applying for a building permit

A dossier of application for a factory construction permit includes: 

  • An application form for a construction permit (according to the form); 
  • Papers proving land use rights; 
  • Decision approving investment projects;
  • Certificate of design approval for fire protection; 
  • Document of results of implementation of environmental protection procedures; 
  • 02 sets of construction design drawings.

See more: Procedures for applying for a license to build a factory in Vietnam

After being issued with an environmental permit, a fire protection license and a construction permit, the investor and the contractor are responsible for the construction and installation of the work, completing the environmental monitoring and completing the acceptance test of the work with the competent authority according to the issued license. Only then will the factory be allowed to operate.

In addition to the general requirements for the application, depending on the industrial park, a few policies and regulations may be added for each licensing procedure. Investors should carefully study the regulations in the industrial park, the locality where the factory is to be located, strictly comply with the regulations to save time and optimize costs. DELCO has more than 15 years of experience in the field of industrial construction and used to be the design-build general contractor of many FDI factories in many different production fields in many large industrial parks in Vietnam. As such, we understands and can advise and assist investors in carrying out legal procedures to ensure that the project is put into operation in accordance with Vietnamese law.

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