Removing Construction Permits: Ho Chi Minh City’s New Challenge in Post-Approval Urban Management

Ho Chi Minh City is taking a bold step by proposing to eliminate construction permit procedures in areas with clearly defined urban plans. While this initiative may seem minor in bureaucratic terms, it signals a substantial shift in how urban governance and administrative reform are approached—particularly from the perspective of businesses and project developers.

Currently, even with a 1/500 detailed plan already approved, investors must go through multiple overlapping procedures, including basic and technical design approvals, before they are eligible to apply for a construction permit. Many of these steps repeat content that has already been vetted in the planning stage. As noted by Mr. Trinh Tien Dung, General Director of Dai Dung Company, “Obtaining a construction permit in an industrial zone may take up to 1.5 years—longer than it takes to actually build the plant.”

If implemented in a methodical and transparent manner, removing construction permits could streamline a significant portion of repetitive administrative processes and reduce negative practices such as rent-seeking. It’s estimated that the reform could cut administrative costs during project preparation by 10–20%, which translates to a 1–5% reduction in total investment costs. For a project worth VND 100 billion, this could mean savings of up to VND 5 billion.

However, the core challenge lies in ensuring that the absence of a permit does not result in uncontrolled or off-plan construction. Removing the permit requirement means the burden of regulation shifts from pre-approval checks to post-construction inspections. This demands a higher level of transparency, consistent supervision, and professional accountability from local authorities.

Data from the HCMC Department of Construction reveals that despite efforts over the past five years—including Directive No. 23-CT/TU aimed at strengthening urban order—more than 3,000 violations were recorded, averaging 1.7 cases per day. Violations are especially concentrated in suburban districts, where demand for housing is high and unofficial land subdivisions remain rampant.

In response to these systemic issues, the Ministry of Construction has recently initiated a broad regulatory review, seeking to reduce at least 30% of the time, costs, and compliance burdens associated with construction project approvals. The Construction Economics and Investment Management Department is tasked with proposing legal amendments that not only reduce redundant permit procedures but also narrow the scope of mandatory design evaluations. In this context, the elimination of construction permits for projects with detailed 1/500 planning or urban design schemes may soon extend beyond Ho Chi Minh City and be applied nationwide.

Still, reform is only meaningful if governance systems adapt in parallel. Without sufficient transparency in public planning databases and without clear technical standards for compliance, the absence of permits could be misinterpreted as a license to build freely. The key lies in replacing the permit process with robust technical documentation, standardized design templates, and clearly defined post-construction inspection criteria. Sanctions such as fines, forced demolition, and license revocation should be strictly enforced in cases of non-compliance.

Ultimately, this policy is not merely about easing administrative procedures or cutting costs. It reflects a deeper transition in urban governance—from a model of preemptive control to one of shared responsibility and transparency. Whether this shift empowers responsible development or exposes new gaps in management will depend on the readiness of both local authorities and enterprises to rise to the challenge. 

Source: Vietnam Investment Review