FDI Companies Renting a Factory: What to Check Before Signing

Renting a factory for production differs from renting an office or a shop. The land must be for the right production use purpose, the building must have the right function, and the factory must have fire prevention and fighting and environmental dossiers suited to the very activity the FDI company plans to carry out — not suited to the activity of the previous lessee.

This article is a checklist of points to check before signing a lease, for companies with foreign capital looking for a factory in Vietnam. It is general guidance; each factory needs to be checked against the real dossier of that building.

Is the leased land for the right use purpose for the planned activity?

The State leases land according to the use purpose recorded in the land allocation decision, the land lease decision or the land use right certificate. A land user may use the land only for the purpose recorded, and must fulfill financial obligations to the State before exercising rights such as sub-leasing or contributing capital with assets attached to land.

For land in industrial parks and industrial clusters, the land has usually been planned for industrial production purposes, but it may still be divided by industry group, pollution level or different infrastructure requirements between plots. What to do before signing:

• Ask for a copy of the lessor’s land allocation decision, land lease decision or land use right certificate (the industrial park infrastructure developer or the factory owner).
• Compare the land use purpose recorded on the documents with the company’s planned line of business and production process.
• For land outside industrial parks, also check the local land use plan, because some areas may be on a roadmap for change of purpose or relocation of production facilities.

If the land use purpose is not yet suitable, the enterprise needs to require the lessor to handle it first (for example changing the land use purpose as prescribed), and should not sign the contract and only then deal with this.

Does the factory’s function match the planned production activity?

A construction work is licensed and accepted for a specific function, for example a mechanical production factory, a warehouse, or a factory with a heating process or use of chemicals. This function is recorded in the design dossier, the construction permit and the work’s acceptance dossier.

When the planned activity differs from the accepted function — for example a factory previously used only as a warehouse now moving to a production line, or adding a process using chemicals or generating heat — the work’s owner usually has to adjust the design, apply for a construction permit (if renovating) and redo the related design approval and acceptance steps, especially for fire prevention and fighting.

What to do: ask for the approved design dossier and the work’s acceptance record (not only the construction permit) to compare the recorded function with the actual planned activity.

Is the factory’s fire prevention and fighting dossier suited to the planned line of business?

This is the part most easily missed, because a factory that “looks fine” to the naked eye does not mean it has been design-approved and accepted for fire prevention and fighting for the very type of production the FDI company plans to operate.

Fire prevention and fighting at a factory runs through the stages of design, construction — acceptance, and operation with management dossiers and periodic self-inspection under the Law on Fire Prevention and Fighting and Rescue No. 55/2024/QH15 and Decree 105/2025/NĐ-CP. The rules on acceptance procedures are being adjusted in 2026, so they need to be re-checked at the time of signing the contract. For the details — design appraisal, acceptance, management dossiers, periodic self-inspection — see Factory Fire Safety: Design Appraisal, Acceptance, Records.

For an FDI company, an additional point: if the production line uses chemicals or solvents, or has welding, drying or heating processes that the factory did not previously have, it is highly likely that fire prevention and fighting design approval and acceptance must be redone before putting the factory into operation for the new line of business.

Does the factory or area already have a suitable environmental permit?

Production activity that generates wastewater, exhaust emissions or solid waste needs to be managed under the Law on Environmental Protection No. 72/2020/QH14 and Decree 08/2022/NĐ-CP (as amended and supplemented by Decree 05/2025/NĐ-CP and Decree 48/2026/NĐ-CP). In principle, a project or establishment that must have an environmental permit must have the permit before formal operation.

For a rented factory, there are two common situations:

• A factory in an industrial park with a centralized wastewater treatment system: the lessee usually connects to the common system, but still needs to check whether the types of waste it generates are accepted by the common system, and its own environmental reporting obligations.
• A standalone factory that treats its own environment: check whether the factory’s existing environmental permit covers the correct line of business, capacity and types of waste that the FDI company plans to generate. A line of business different from the licensed one usually requires the permit to be adjusted before operating.

What to do: ask for a copy of the environmental permit (or an equivalent document) of the factory or industrial park, and compare it with the planned activity before signing the lease.

Do power and water meet the production capacity?

Unlike an office, a production factory usually needs large and stable electrical capacity, and may need its own transformer station or an upgrade of the existing one. Points to clarify with the lessor:

• The factory’s existing electrical capacity and the possibility of upgrading if the FDI company needs greater capacity.
• Whether the enterprise buys electricity directly from the power utility or through the industrial park infrastructure developer; who stands as the party to the electricity purchase contract.
• The water source for production (clean water, water for cooling or process use) and the drainage system and wastewater treatment before connection.

If current capacity is not enough, ask clearly about the time and cost of upgrading before factoring it into the operating plan.

Who is responsible for what — state it clearly in the lease

The table above is a reference framework. The real content needs to be stated specifically in the lease, suited to the current condition of each factory and the FDI company’s line of business.

What Thái Tín can help with for FDI companies renting a factory

Serving FDI enterprises is one of Thái Tín’s strengths. For renting a factory, we:

• preliminarily check the land dossier, building function, and the fire prevention and fighting and environmental dossiers provided by the lessor, comparing them with the planned line of business;
• draw up a list of points that are missing or not yet suitable before the company signs the lease;
• connect professional partners for fire prevention and fighting design approval and acceptance, and for the environmental dossier if adjustment is needed;
• coordinate and track progress until the factory is eligible to be put into operation.

Design approval, acceptance for fire prevention and fighting, and the issuance of environmental permits are considered and decided by the competent State authorities.

You can send the information on the factory you plan to rent (address, line of business, planned capacity) through the contact page to have a preliminary check before signing the lease. The content of this article is general guidance and does not replace checking the real dossier of each factory.

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