Private entities urged to play more crucial role

In April, Nguyen Danh Dat opened a restaurant in Hanoi’s Bac Tu Liem district. This is the third restaurant, and also the third company, that he has established in the capital since late 2022.

Managed by Danh Dat Trading JSC, the restaurants offer South Korean dishes. Dat hopes the third restaurant will strongly develop as the area it is located in is now home to a rising number of South Korean inhabitants, especially after the new South Korean Embassy was put into operation a few years ago.

Not far from the new restaurant, Dat has also been operating another company offering auto repair and upgrade services.

“The business and investment climate has been more favourable than before. Under the government’s policies, private companies like us can be established with an unlimited number in many different sectors,” Dat said.

Danh Dat Trading’s third company was among over 51,600 enterprises newly established in the first four months of this year, registered at $19.6 billion. The total four-month number of newly established enterprises and those resuming operation came in at nearly 90,000, up nearly 10 per cent on-year. Total registered capital added to the economy stood at $71.78 billion, up 91.3 per cent on-year.

Last year, over 157,200 newly established enterprises last year with total registered capital of nearly $61.9 billion. The total number of newly established enterprises and those resuming operation hit over 233,400, up 7.1 per cent on-year. Total registered capital added to the economy in 2024 was $81.03 billion, up 3.6 per cent on-year.

According to the National Statistics Office, the figures illustrate that private-owned enterprises (POEs) in Vietnam are growing strongly, with their confidence improving significantly.

“We will continue developing the private economic sector as the most important propellant of the economy, and encourage and create the best conditions for the sector to develop and take advantage of all opportunities,” stated Party General Secretary To Lam at last week’s national-level conference on private sector development organised in Hanoi.

A hallmark policy

Private sector development has been highlighted in a number of resolutions by the Party and the government in recent times.

However, never before have such developments been pushed compared to earlier in May, when the Politburo issued Resolution No.68-NQ/TW on developing POEs. This was further materialised by a National Assembly resolution on related policies and a government action plan on the issue.

Under the new policy, the Party has decided that the private sector is “the most important driving force” of the economy.

“One of the most important points is that the private sector is treated as equal to all other types of enterprise,” Prime Minister Pham Minh Chinh stressed. “A principle of non-retrospectiveness is to be applied if new legal regulations cause disadvantages to POEs. No criminalisation is applied to all economic and civil litigations.”

Currently, Vietnam has nearly one million enterprises and five business households. POEs are creating 51 per cent of GDP, over 30 per cent of the state budget, more than 40 million jobs, and over 82 per cent of total labourers in the economy. POEs also account for 60 per cent of total development investment capital.

Resolution 68 has set a target to have a total enterprise number of two million in 2030, with efforts are to be made for POEs to create 58 per cent of GDP, 40 per cent of state budget revenue, and 85 per cent of labourers. This has demonstrated the Party’s great confidence in POEs’ development potential and role.

Vietnam has had many big POEs such as Mobile World Co. Ltd, Truong Hai Auto Corporation, VietJet Air, Vingroup, Masan Consumer, Minh Phu Seafood Corporation, TH Group, and Him Lam Corporation, among others.

Removing obstructions

Party General Secretary To Lam underlined that despite POEs’ growing contributions, the majority of them are medium-sized or smaller, featured limited financial health and weak governance, without connection with one another and with foreign-invested enterprises.

“Thus, POEs are finding it to increase their added values and competitiveness, and join global value chains,” the Party chief wrote.

He underscored that besides strongly developing state-owned enterprises (SOEs), it is necessary to prioritise the building of regional and global private economic groups, actively support relevant businesses, and simultaneously assist the household economic sector and cooperative economy.

“POEs are encouraged to participate in the country’s strategic sectors. We have to practise the view that the private economy plays an important role in the socialist-oriented market economic structure, eliminate the mindset of ‘attaching more importance to SOEs than POEs’ and the monopoly of SOEs in some sectors,” Party General Secretary Lam wrote.

“We will form and develop large and strong private economic groups with international competitiveness, with a mission of leading and supporting other domestic enterprises to partake deeply in the global value chain,” he continued. “Simultaneously, there must be separate policies to support the development of small- and medium-sized enterprises (SMEs), business households and cooperative economy, encouraging such households to transform into businesses and develop new and effective cooperative models.”

He pointed out that in order for the private economy to develop in scale and contribute positively to long-term development, it is necessary to encourage POEs to participate in strategic areas, and develop important infrastructure, high technology, and energy security.

The state will also have a policy to attract the private sector to participate in a number of national important projects such as high-speed railways, urban railways, energy infrastructure, digital infrastructure, and defence and security.

Vu Van Tien, chairman of Geleximco, which operates in sectors such as industrial production, property, and finance, said that Resolution 68 will help POEs like his thrive.

“It is a comprehensive revolution and a great way out for POEs after so many years. POEs have faced massive difficulties but they cannot overcome them due to improper regulations,” Tien told the same conference, which was attended by leaders of Vietnam and representatives of hundreds of Vietnamese enterprises.

“For all the resolutions to be effectively implemented, it is suggested that a dedicated agency be responsible for assessing and supervising how they deployed, and receiving feedback and proposals from the public and enterprises,” Tien said.

Vuong Quoc Toan, chairman of property group Lan Hung, said that hundreds of thousands of POEs in Vietnam are finding it very hard to access land for production and business.

“While the majority of POEs are SMEs which are cash-strapped and need land of 1,000-5,000sq.m for production, industrial parks only lease small parts of land, which is costly,” Toan said.

PM Chinh said that under Resolution 68, localities based on their land situation have to earmark at least 20ha in each industrial area or 5 per cent of their land area for SMEs.

“The government will soon enact a decree to concretise regulations,” he stressed. “The government stands ready to listen to enterprises’ feedback and solve their difficulties.”

For businessmen like Nguyen Danh Dat from Danh Dat Trading JSC in Hanoi, he is awaiting the government’s action plan to be materialised soon, so that POEs can grow further.

“There has been growing demands for foreign foods and auto repair services, creating immense opportunities for companies like ours. We are planning to establish a new company using high technology in agricultural production,” Dat said. “However, we have been required to submit dossiers about the technology. This means that it will take a month or two to complete related procedures,” Dat said.

“We also wonder that if we apply high technology to all of our performance stages, will we be recognised as a high-tech company, which will often receive preferential policies from the government? As far as I’m concerned, the standards to recognise what a high-tech company is remains unclear,” he added.

More support policies are being discussed to help the vast amounts of smaller businesses in the country, photo Le Toan

Tran Hoang Ngan, National Assembly deputy Ho Chi Minh City

The private economic sector accounts for half of GDP, a third of total budget revenue, and around 60 per cent of total development investment capital. Thus, we have to have many policies to support the sector to promote its important role and driving force, which is currently identified as the most important impetus.

We have set a goal to have two million private enterprises by 2030. This would mean we have to advance special solutions as currently, on average, we only have an additional 30,000-40,000 enterprises each year.

One of the solutions proposed is that we must have a policy to support individual business households to switch to an enterprise level. This could help us to achieve this goal. At the same time, it is necessary to have solutions to expand larger-scale enterprises.

Regarding support for access to land, and production and business sites, localities with land, potential, and strengths have to be given mechanisms to establish and expand industrial parks for private enterprises to rent at a suitable price.

To be independent and self-reliant in this front, the private sector must have the best conditions to be strong, and must be given great support in finance, credit, and access to land. Therefore, there must be a regulation to encourage localities to create clean land for the private sector.

Khuong Thi Mai, National Assembly deputy Nam Dinh province

In order for Resolution 68 to be materialised, it is important to legislate policies, synchronise the legal system, and remove current overlapping laws. For example, a mechanism change is needed for private enterprises not to be bound by business conditions, and a pre-audit mechanism must be shifted to a post-audit one.

This means private enterprises can invest and develop according to their capacity, without having to carry out administrative procedures that take time and cost to quickly enter the market. The state must check and supervise their operations through inspection.

It is necessary to strongly reform the implementation stage, especially administrative procedures related to land, environment, construction, and investment. Enterprises do not have to wait for investment policies, and resolving administrative procedures too long.

This year, it is needed to eliminate unnecessary business conditions, inappropriate overlapping regulations that obstruct the development of private businesses. At least 30 per cent of time for processing administrative procedures, at least 30 per cent of legal compliance costs, and at least 30 per cent of business conditions must be removed, and this must continue to be reduced in the coming years.

I propose that there be more regulations on abolishing conditional business lines, investment procedures, investment policies, and investment certificates. It is needed to only retain investment incentives, and conditional business investment lines – it is because investors are currently still managing each individual venture through procedures for accepting investment policies.

Nguyen Thi Viet Nga, National Assembly deputy Hai Duong province

I agree with the policy of strongly shifting from pre-audit procedures to post-audit mechanisms, especially in the management of business conditions. This is a direction in line with international practices, contributing to reducing compliance costs for enterprises, encouraging creative startups and expanding production.

However, without a sufficiently strong, transparent, and effective post-audit mechanism, this policy can easily become a loophole for businesses to take advantage of. In reality, many people have capitalised on the lax policy to establish hundreds of companies without veritable operations, but to buy and sell invoices, evade taxes, engage in money laundering, cause budget losses, and distort the competitive environment.

I propose that the government need to add specific requirements for the post-audit system, and data connection between tax, customs, and banking agencies, while strengthening inspection and examination of digital technology applications in supervision, and considering building feasible sanctions.

At the same time, it is necessary to clearly define the sectors that are required to be pre-audited based on risks and international experience to shun widespread or loose application.

Next, it is also necessary to have feasible mechanisms to encourage businesses to apply new technologies and smart technologies in activities to develop and improve labour productivity.

The resolution on private sector development must be materialised as soon as possible, with the government needing to enact detailed regulations so that the implementation of the resolution can be carried out.

Ta Van Ha, National Assembly deputy Quang Nam province

I would like to suggest that more support be given to businesses in terms of trade policy and international integration. Currently, enterprises are facing numerous difficulties. When they want to market their products into international markets, they need assistance from promotion to legal support.

At present, in trade disputes with foreign countries, Vietnam is at a disadvantage, so it is very necessary for the state to offer support to them in this regard.

Secondly, businesses are now in critical need for policy stability. Newborn enterprises are facing massive difficulties in all conditions, while policies remain unstable with constant changes. Normally, it would take from 5-15 years or even longer for a startup to grow successfully. When an enterprise is newly established with some investment, policies change again, meaning that the enterprise must do everything from scratch, meaning a great waste in resources, efforts, and money.

Thirdly, it is now urgent to continue reforming administrative procedures, creating the most favourable conditions for domestic enterprises to perform.

In fact, many domestic companies want to sell some products in the Vietnamese market, but they cannot. So they have to cooperate with foreign businesses to market such products, whose number can be hundreds.

Many Vietnamese companies have been set up in Singapore, Taiwan, and many other markets to sell many types of products worth tens to hundreds of millions of US dollars, while they cannot do that in their home market.

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