Improving effectiveness of support policies for small and medium enterprises

(ĐN) - In recent years, Dong Nai, like the rest of Vietnam, has introduced a range of policies and measures to support the development of private enterprises, recognizing them as a key driver of socio-economic growth.

Creating a transparent and favorable business environment is something enterprises urgently need today. In the photo: Kim Vinh Thang Co., Ltd. (Ho Nai Industrial Park) holds a briefing with workers before production. Illustrative photo.

The Law on Support for Small- and Medium-sized Enterprises (SMEs), approved by the National Assembly in 2017, along with other supporting policies, has contributed to fostering the development of an increasingly robust business community. However, over time, various practical issues have arisen that require further study and adjustment to ensure the effectiveness of these support policies, especially for small and medium-sized enterprises.

Ambitious goal for the private sector

In Dong Nai, the provincial government has made developing the private sector a priority, with a particular focus on SMEs. More than eight years after the law came into effect, the province is home to roughly 105,500 non-state business units, including 76,500 registered companies and 29,000 dependent branches, with a combined registered capital of 754 trillion VND. The private economy contributes significantly to the province’s growth, job creation, and social welfare.

Despite these achievements, local private enterprises still face numerous obstacles. Many struggle with limited access to capital, inadequate resources, and challenges scaling up or improving competitiveness. Financial capacity and management expertise remain limited, while labor productivity and operational efficiency are still modest. These challenges are partly due to an incomplete understanding of the private sector’s role in the economy, as well as outdated or inconsistent legal and institutional frameworks. Leadership and governance oversight have sometimes fallen short, while property rights and business freedoms are not always fully protected. Access to key resources such as capital, technology, land, natural resources, and highly skilled labor remains a significant barrier.

In line with Politburo Resolution No. 68-NQ/TW, issued on May 4, 2025, regarding private sector development, the Dong Nai Provincial Party Committee has launched a comprehensive plan aimed at promoting private enterprise, streamlining administrative procedures, and enhancing overall business support.

At a roundtable on the implementation of the Law on Supporting Small and Medium-Sized Enterprises, held by the Vietnam Fatherland Front Committee of Dong Nai Province on November 26, Vice Chair Luu Thi Ha stated that the province has set ambitious goals for the 2026–2030 period: to establish 36,000 new enterprises, with over 40% of them being innovative startups. The private sector is projected to grow by 10–12% annually, contribute 55–58% to the province’s GRDP, account for 35–40% of total budget revenue, and generate employment for 84–85% of the workforce. These are critical targets that demand significant efforts not only from government authorities and enterprises, but also from the broader political system and local organizations.

To create strong momentum for the private sector, Dong Nai is aiming to reduce administrative procedures, legal compliance costs, and business conditions by 30% while striving to be among the top ten provinces nationwide in terms of technology, innovation, and digital transformation.

Practical solutions for small and medium enterprises

According to Phan Van Chau, chairman of the Dong Nai Lawyers’ Association, one of the current weaknesses among businesses is not a lack of determination, but a lack of legal knowledge. Many enterprises, especially small businesses and startups, still fail to give sufficient attention to complying with relevant legal regulations. To address this, he emphasizes the need to strengthen legal dissemination and education, enabling businesses to understand the law better, proactively protect their rights, and move toward sustainable development. The Dong Nai Lawyers’ Association plans to propose the establishment of mobile legal advisory teams to provide on-site support and help prevent the situation where "the law looks good on paper but is disconnected from reality."

In the National Assembly, lawmakers discussing SME support policies have called for a timely revision of the 2017 SME Support Law. After seven years, the law has revealed several shortcomings: criteria for defining SMEs remain vague, policies for digital transformation, innovation, and international integration are not clearly defined, and there is no specific priority for micro-enterprises, household businesses transitioning into companies, or innovative startups.

Tran Hoang Ngan, a National Assembly delegate from Ho Chi Minh City, emphasized the need to continue developing and refining the legal framework with bold, innovative policies that create a transparent and business-friendly environment. He highlighted key areas for support, including land, infrastructure, investment, finance, credit, administrative procedures, science and technology, innovation, digital transformation, and workforce training. The policies, he stressed, must align with the realities of economic development.

At Trang Dai Ward, local official Phan Quang Tuan, secretary of the Party Committee and chairman of the Ward People’s Council, said the community aims to make the private sector a key driver of growth. While the policy to upgrade household businesses into registered enterprises is considered the right approach, many residents remain hesitant. The ward has a large number of household businesses, but the registration rate is low. Tuan stressed the need for additional policies that provide legal and managerial guidance, support digital transformation, streamline administrative procedures, and clearly communicate available incentives, so that residents can see real benefits and be motivated to formalize their businesses.

By Vuong The – Translated by Thien Kim, Minho