Hanoi (VNS/VNA) - Reducing red tape in the construction sector is expected to create a more transparent, efficient and business-friendly environment, according to experts.

For years, complex administrative procedures, particularly the process of obtaining construction permits, have posed a significant hurdle for businesses in Vietnam.

Ranging from overlapping regulations to prolonged approval timelines, these barriers have not only delayed project implementation but also eroded investor confidence and increased operational costs.

Now, however, the Ministry of Construction (MoC) is advancing a plan to reduce administrative procedures for projects that have already secured 1/500 detailed planning approval. This move is part of a broader effort to reform regulatory processes in the construction sector.

Obtaining construction permits has long been a daunting task for developers.

According to Chairman of the Binh Duong Provincial Business Federation Mai Huu Tin, enterprises now are forced to seek permission for even minor projects.

Le Huu Nghia, Director of Le Thanh Company, which specialises in social housing development, stressed the inefficiency of having to re-verify planning compliance at multiple stages, including feasibility studies, planning assessments, and applying for construction permits.

These inefficiencies are not limited to housing projects. General Director of Dai Dung Company Trinh Tien Dung said that it can take up to 18 months to secure a licence for factory construction in industrial parks, which is often longer than the construction phase itself, causing businesses to incur unnecessary financial and operational risks.

Beyond delays and cost burdens, businesses often face inconsistent procedures across provinces, unclear approval criteria and unofficial costs.

Trang Bui, General Director of Cushman & Wakefield Vietnam, noted that such inconsistencies force enterprises to resubmit applications multiple times, endure unwarranted delays, and make repeated project adjustments.

Removing the construction permit requirement is more than a procedural update — it could be a game-changer. If implemented effectively, the reform would significantly improve Vietnam’s investment environment, especially in real estate and manufacturing.

Trang Bui emphasised that scrapping the permit process could accelerate project timelines, reduce borrowing costs, and improve capital utilisation.

It would also allow developers to take more initiative in project execution, choosing contractors, and managing progress in alignment with regulatory standards rather than navigating bureaucratic obstacles.

CEO of Sen Vang Company Nguyen Thi Bich Ngoc estimated that eliminating the construction permit requirement could reduce project preparation time by 3-6 months and cut investment costs by up to 5%, largely by removing administrative expenses and minimising delays.

Ngoc said that businesses would, in turn, need to invest more in internal controls and quality assurance.

The State’s role remains critical in this transformation. Publicising planning data, digitising administrative workflows and establishing a centralised post-audit system are essential for enforcing standards and maintaining public trust.

Giang Huynh, director of research and S22M at Savills HCM City, stated that reducing procedural burdens can help businesses optimise operations, bring products to market faster, and make more efficient use of resources.

She stressed that digitalisation, data transparency and robust audit mechanisms must accompany the reforms to ensure lasting impact.

In addition to permit reform, the Government must address underlying challenges in land use planning, land valuation and zoning regulations — long-standing bottlenecks for project development.

As the Government moves forward with this initiative, the combination of procedural simplification, digital transformation and leꦫgal reform could serve as a powerful catalyst for economic growth, transparency and sustainable development in Vietnam’s construction and real estate sectors, according to the experts./.