For a manufacturing project in Vietnam, the environmental license is often what determines whether the factory is allowed to begin operation at all. Build the plant without one, and the business cannot trial-run its waste treatment works, may face administrative penalties, may be suspended from operating, and can have its investment capital tied up for months.
Is your factory required to obtain an environmental license, or is environmental registration enough? Since mid-2025 the district level of local government has been abolished and the Ministry of Natural Resources and Environment has merged into the Ministry of Agriculture and Environment, so which authority do you now file with? And must the license be in hand before or after construction, equipment installation and test runs? Many manufacturers, especially foreign-invested businesses, only raise these questions when the project is close to its operating date, the very point at which every paperwork error becomes expensive. This article analyses the legal framework in force in 2026: which factories must apply, who grants the license, the procedure and the mandatory timing, along with the practical risks that drag applications out.
Which manufacturing projects must have an environmental license
An environmental license is the document that permits a project or facility to discharge wastewater, dust and emissions into the environment and sets out the accompanying environmental protection obligations. Not every factory has to obtain one, but most manufacturing projects that generate waste fall within its scope. The Law on Environmental Protection classifies investment projects into four groups, from Group I with a high risk of adverse environmental impact down to Group IV with virtually no risk. Which group your project falls into depends on the type of production, its scale and capacity, land area, and any environmentally sensitive factors at the factory's location.
The key point is this: if a project belongs to Group I, II or III and generates wastewater, dust or emissions that must be treated during operation, it is required to hold an environmental license before it can operate.
Conversely, Group IV projects and certain small projects that do not generate waste requiring treatment do not need an environmental license and only have to complete environmental registration, a much lighter procedure. The line between "must obtain a license" and "registration only" is exactly where many businesses get confused, and where risk begins. For a small mechanical workshop, a garment facility or a food processing plant, the answer can be entirely different even when the projects look similar in size.
The licensing authority and the major changes in force in 2026
This is where the rules have changed the most, and where businesses are most likely to file in the wrong place. Previously, an environmental license could be granted by several levels of authority, including the district People's Committee. From 1 July 2025, the two-tier local government model took effect, the district level was abolished, and licensing authority was reorganised. At the same time, the Ministry of Natural Resources and Environment merged with the Ministry of Agriculture and Rural Development to form the Ministry of Agriculture and Environment, which is now the central licensing authority.
Under the current rules, only two categories of authority grant environmental licenses for civilian manufacturing projects. The Ministry of Agriculture and Environment licenses large projects that fall within its authority to appraise environmental impact assessments, while most other factories fall under the authority of the Chairperson of the provincial People's Committee.
Decree 131/2025/ND-CP sets out exactly which cases fall under the authority of the Chairperson of the provincial People's Committee. Your factory will most likely file at the provincial level if it meets one of the following thresholds:
- Generates domestic wastewater requiring treatment with a total flow of 50 m3 per day or more.
- Generates industrial wastewater requiring treatment with a total flow of 10 m3 per day or more, or belongs to a production type with a risk of causing environmental pollution.
- Generates emissions requiring treatment with a total flow of 2,000 m3 per hour or more upon entering official operation.
- Regularly generates hazardous waste of 100 kg per month, or 1,200 kg per year, or more, together with wastewater or emissions that must be treated.
For most medium-sized manufacturing plants, this means the application will be filed with the specialised agency under the provincial People's Committee where the project is located, rather than at the district level as before. Filing with the right authority from the outset helps avoid losing several weeks simply being told to move the application elsewhere.
The application procedure and when the license must be in hand
The procedure for obtaining an environmental license for a manufacturing project usually runs through the following steps:
- Determine which group the project belongs to and whether it must hold an environmental license or only complete environmental registration.
- Prepare the environmental license application report, describing the waste sources, treatment works and environmental protection measures.
- Submit the dossier and the appraisal fee to the competent authority, now mainly filed online through the public services system.
- The licensing authority publishes the dossier, consults for opinions, and establishes an appraisal council or an inspection team to visit the factory.
- The project owner revises and supplements the dossier if requested, after which the licensing authority reviews and grants the license.
The timing of when the license must be in hand is what most often breaks a project's schedule. For a project subject to environmental impact assessment, the license must be obtained before the trial operation of the waste treatment works. For a project not subject to it, the license must be obtained before the construction permit is granted. In other words, the environmental license is not a last-minute formality; it is tightly bound to the construction and test-run schedule of the factory.
Once granted, the license also has a term rather than lasting indefinitely.
This means a Group I factory holds a license valid for 7 years, most remaining facilities 10 years, and the business must apply for re-issuance before expiry so that operations are not interrupted.
Common risks and mistakes in practice
Running into difficulties with environmental licensing is common for manufacturers, even well-run ones. In most cases it is not because they deliberately did something wrong, but because the procedure is tied to the investment timeline in ways that not everyone anticipates. Below are the situations that recur most often.
Filing too late. This is the most costly mistake. A business pours its resources into building the plant and buying equipment, and only worries about the license when the test run is about to start. Because the license must be in hand before trial operation, the entire line has to wait, driving up interest costs, labour costs and delayed delivery contracts.
Assuming a small project does not need a license. Many facility owners believe their workshop is too small to require a license, when in fact generating industrial wastewater of just 10 m3 per day, or belonging to a pollution-prone production type, is already enough to reach the licensing threshold. Operating without a license is subject to administrative penalties and even suspension of operations.
Filing with the wrong authority after the administrative restructuring. After the district level was abolished and the ministry renamed, many dossiers are still prepared according to the old guidance, name the wrong receiving authority and are returned. For a project racing against the clock, an extra round of resubmission means another month lost.
Increasing capacity or changing technology without re-issuing the license. An environmental license is granted according to the scale and technology at the time of application. When a factory expands output, adds a production line or changes technology in a way that increases emissions, the business must apply to have the license re-issued. Skipping this step is one of the most frequently detected violations when authorities carry out inspections.
Failing to keep up with regulatory changes. In just two years, the legal framework for environmental licensing has changed through Decree 05/2025/ND-CP, Decree 131/2025/ND-CP, Law 146/2025/QH15 and Circular 09/2026 of the Ministry of Agriculture and Environment. Among these, Law 146/2025, in force from 1 January 2026, abolished the license re-exchange procedure for changes that do not alter the nature of the project, easing the administrative burden. Businesses that do not keep pace easily do too much or too little.
The role of ongoing legal counsel in a factory's environmental obligations
Most manufacturers, particularly small and medium-sized enterprises or foreign-invested businesses newly arrived in Vietnam, do not have an in-house legal team deep enough to handle contracts, labour and tax while also tracking a field that changes as quickly as the environment. This is precisely where ongoing legal counsel proves its worth. Acting as an outsourced legal department, the adviser reviews which group your project belongs to and whether it needs a license or only registration, gives early warning of the deadline by which the license must be in hand so that it fits the construction schedule, and flags the re-issuance timeline when the factory expands or when the license is about to expire.
At DEDICA, the team combines legal staff with experienced lawyers, and every piece of advice is checked by a lawyer before it reaches the client, so the business is not betting on a single junior legal hire. For environmental obligations, an ongoing counsel package helps the business keep pace with the changes of 2025 and 2026, control the risk of penalties, and, when a licensing dossier needs to be filed, coordinate with DEDICA's licensing services team to handle the whole process. Compared with the cost of a single suspension of operations or one administrative penalty, the cost of retaining ongoing legal counsel is usually far smaller. DEDICA provides bilingual support in English and Chinese, convenient for foreign management teams.
Conclusion
To bring a factory into lawful operation in Vietnam in 2026, a business should follow four steps. First, determine whether the project is in Group I, II, III or IV in order to know whether it must obtain an environmental license or only complete environmental registration. Second, identify the correct licensing authority, now the Ministry of Agriculture and Environment for large projects and the Chairperson of the provincial People's Committee for most other factories, since the district level has been abolished. Third, file the dossier at the right time, obtaining the license before the trial operation of the waste treatment works or before applying for the construction permit. Fourth, maintain the license and apply for re-issuance when expanding capacity, changing technology, or when the 7-year or 10-year term is about to expire. The three mistakes that most often stall a project are filing too late, misjudging whether the project needs a license at all, and filing with the wrong authority after the apparatus was reorganised. Reviewing proactively from the moment the project is planned, rather than waiting until the machines are about to run, is the cheapest way to avoid starting over.
Every manufacturing project has its own particularities of sector, scale, technology and location, so determining whether an environmental license is required calls for an assessment based on the specific dossier. DEDICA Law Firm accompanies businesses from identifying the project group and timing the legal milestones to match the investment schedule, through to the license being granted and maintained. Contact DEDICA to have a lawyer review your project's environmental obligations before you break ground or before you begin operation.
This article is for reference only, based on the legal regulations in force at the time of writing. Each project has its own circumstances; please consult a DEDICA lawyer for advice tailored to your specific case.
