Leasing a ready-built factory is the fastest route for an FDI project to reach production — and the route on which companies sign fastest and check least. The risks of this lease type do not sit in ordinary lease clauses; they sit in three questions tenants often never ask: does the park developer actually have the right to lease that factory, has the factory passed fire-safety acceptance for the tenant’s exact production function, and when the line needs modification, who must obtain the resulting permits. All three questions have documentary answers — the point is to demand those documents before signing, not after the machines are installed.
Checking the lessor: the right to lease and the factory’s original file
The infrastructure developer’s right to lease factories depends on its land-rights foundation and the approved purpose of its industrial park project: where the park project includes an investment item for building factories for lease, leasing is activity within purpose; conversely, a developer leased land only to build technical infrastructure does not automatically have the right to build and commercially lease factories. The tenant should request and keep: the park project’s investment-policy decision (whether a factory-for-lease item exists), the land use right certificate for the site, the factory’s construction permit and the works completion acceptance record.
The second file layer is fire safety: factories fall within the categories requiring fire-safety design appraisal and acceptance under the Law on Fire Prevention, Fighting and Rescue 55/2024/QH15 and its guiding Decree 105/2025/ND-CP. The factory’s original fire acceptance covers the function and layout at acceptance time — it is the condition for the building to be put into use, and the starting point, not the endpoint, of fire compliance for a tenant whose production sits in fire- and explosion-hazard categories. A factory “with fire approval” for ordinary warehousing may be entirely unqualified for chemical production, painting, or solvent storage that the tenant plans to bring in.
Fitting out a leased factory: construction permits, added fire approval, and whose money
When the tenant needs modifications — added mezzanine floors, changed production zoning, exhaust treatment systems, increased power load — two permit systems activate. First, the construction permit for repair and renovation: works altering load-bearing structure, scale or use function require a permit under construction law; the applicant in principle is the works owner or an authorised party — in a lease, that must be a clause: who applies, who pays design and verification costs, whose installation schedule absorbs the permit wait. Second, resulting fire-safety work: changing function or production layout can force re-appraisal of the fire design for the modified part and re-acceptance before operation — cost and execution responsibility must also sit in the contract, not default onto the tenant at the last minute.
Alongside comes the reinstatement problem: the contract must fix from day one the factory’s condition on hand-back — whether fit-out is fully stripped or partly left, whether residual fit-out value is paid for, and who bears the cost of restoring fire systems, power and floors to their originally accepted state. Without that clause, the tenant’s fit-out investment of billions of dong becomes a bargaining dispute at termination — the very moment the tenant is weakest, because the production line must move on a production schedule.
Early termination, the deposit, and comparison with leasing land to build
The deposit in a factory lease is a performance-security deposit, handled by the parties’ agreement and damages principles — unlike the contract-formation deposit in Article 328 of the Civil Code, with which many are familiar through the “lose the deposit / pay double” mechanism. The deposit’s fate on early termination is therefore entirely what the contract writes: the tenant should negotiate a return scale by time leased (the longer the tenancy, the less deposit retained), a closed list of deductible items (unpaid rent, restoration costs under a joint inspection record), and a fixed refund deadline after hand-back. Early-termination penalties should likewise be a number or a formula determinable at signing — an open “compensate all damages” clause is an invitation to dispute.
Weighed against leasing land and building: ready-built wins on deployment speed (months instead of one to two years of construction) and low initial capital; it loses on technology customisation, on accumulated asset value (the tenant owns nothing at expiry) and on long-term control of the location. Leasing land to build inside the park gives a fuller land sub-lease right and a factory designed around the production process, in exchange for all construction, permit and time risk. The accurate decision follows product life: short-life products and unproven markets favour leasing ready-built for flexibility; lines with 15–20-year lives and special technical demands favour building on long-term leased land — and in both cases the contract should be written for the bad scenario, not for signing day.
Frequently Asked Questions
1. What clauses does a ready-built factory lease need?
Beyond ordinary lease terms: confirmation of the developer’s right to lease with the factory file (project approval including a factory item, construction permit, completion acceptance); the fire-acceptance status and permitted function; allocation of who obtains and pays for fit-out permits (construction, additional fire approval); hand-back condition standards and treatment of residual fit-out value; a deposit-return scale and an early-termination penalty fixed as a number or formula at signing.
2. Who applies for fire and construction permits when fitting out a leased factory?
Whomever the contract designates — the law sets no default. Renovations altering structure, scale or function require a repair/renovation construction permit and may require additional fire design appraisal and acceptance under the Law 55/2024/QH15 and Decree 105/2025/ND-CP. The contract should fix who applies, who pays design and verification costs, and whose schedule absorbs the permit wait.
3. On early termination, what happens to penalty and deposit?
Entirely per the contract: a lease deposit is performance security, and the forfeit/double-payment mechanism of the formation deposit in Article 328 of the Civil Code does not apply automatically. Tenants should negotiate a deposit-return scale declining with tenancy length, a closed deduction list backed by a joint inspection record, a fixed refund deadline, and an early-termination penalty stated as a sum or formula.
4. Lease ready-built or lease land and build?
Ready-built wins on deployment speed and initial capital, suiting short product lives, unproven markets and location flexibility. Building on long-term leased land wins on technology customisation, asset value and long-term control, suiting 15–20-year production lines with special technical demands. Both routes require checking the park’s land-rights foundation and fire file before deciding.