Construction procedure cuts create favour for real estate

Construction procedure cuts create favour for real estate

The streamlining of construction procedures through the removal of permit requirements represents a constructive initiative to reinvigorate real estate and expedite project execution.

On May 29, a directive was signed focusing on cutting and simplifying administrative procedures in the construction sector.

In the directive, the prime minister requested the minister of construction to urgently review, reduce, and simplify more than 360 administrative procedures related to production and business activities, and around 450 business conditions under its management.

The goal is to cut at least 30 per cent of the processing time for administrative procedures, compliance costs, and business conditions in 2025, with a strong focus on reforming administrative procedures in the construction sector.

The directive emphasises eliminating construction permit procedures for works under projects that already have detailed planning or are located in areas with approved urban design plans. It also aims to reduce the number of schemes subject to appraisal procedures by construction authorities.

Experts, investors, and the public have expressed strong support for this government policy.

According to Nguyen Thi Bich Ngoc, founder of Sen Vang Group, removing construction permits could save businesses up to six months of preparation time, significantly reduce administrative costs, and improve project implementation flexibility.

“In the past, businesses often faced issues such as lengthy permitting processes, high costs, complex documentation with redundant paperwork, limited digital infrastructure, and overlapping management between the department of construction and district or provincial people’s committees,” said Ngoc.

She added that eliminating construction permits could reduce administrative costs during the pre-construction phase by 10–20 per cent, equivalent to 1–5 per cent of total project investment.

“For instance, for a $4 billion venture, businesses could save $40,000-200,000. This estimate aligns with government targets to cut at least 30 per cent of administrative compliance costs in construction,” Ngoc added.

As the system shifts from pre-approval to post-inspection, businesses need to adopt a new approach, she emphasised, and companies must proactively manage risks from the beginning.

“Specifically, businesses should invest in thoroughly researching zoning and technical standards, develop internal quality management systems in line with international standards, apply technologies for real-time quality monitoring, and coordinate closely with local authorities to mitigate legal risks during post-inspection,” Ngoc explained.

With construction permits being removed, detailed planning and urban design documents should be made publicly accessible through government portals for easy business access.

The directive also calls for reviewing and updating necessary technical standards and regulations in the construction sector, especially those related to planning, to support investment activities. Outdated or wasteful standards and regulations should be abolished or revised.

Additionally, administrative procedures related to construction business eligibility will be simplified by shifting from state-issued qualification certificates to self-declaration of compliance by enterprises, with competent authorities conducting post-inspections. Investment conditions in construction activities will also be reduced.

The Ministry of Construction has also been instructed to thoroughly delegate authority to appraise projects, review designs, issue construction permits, and inspect completion work, in accordance with administrative unit restructuring and the two-level local government model.

At the same time, digitalisation and automation must be promoted, and data reuse on planning, land, construction, population, and businesses must be enhanced to reduce documentation, streamline procedures, and shorten administrative processing times.

VIR