Favourable conditions needed for SMEs

With around 97% of Vietnamese enterprises categorized as small and medium-sized enterprises (SMEs), their development conditions remain limited. In particular, getting access to land and production sites is regarded as the most pressing challenge for SMEs.

For enterprises, particularly SMEs, it is very difficult to secure production sites within industrial parks and clusters. Illustrative photo

To address this bottleneck, in addition to the self-driven efforts of the business community, there is a pressing need for stronger measures and more flexible models to ensure that small and medium-sized enterprises can benefit more effectively from government support policies.

Struggling to find premises

Domilk Joint Stock Company (Long Thanh commune) specialises in producing confectionery made from local dairy ingredients under the Long Thanh dairy brand. According to Deputy Director Vu Nhu Y, the company is facing difficulties in finding production and business premises that meet regulatory standards. Specifically, the enterprise has sought to establish an agricultural processing facility in areas with available raw material sources within the province. Yet, after knocking on many doors, it has yet to be introduced to or offered suitable production land for lease.

He noted that while compliance with standards is essential, it must also align with the actual scale of SMEs. His company wishes to build a factory of less than 5,000 square meters, yet it has been rejected by all industrial parks and clusters in the province, as developers often prioritize large corporations and foreign-invested firms that lease large plots of land. SMEs are therefore left with minimal opportunities. Renting ready-built factories in central industrial parks is also prohibitively expensive, far beyond the financial capacity of small businesses. In the long run, this creates a widening gap in competitiveness and growth opportunities of SMEs.

For many SMEs, access to clean industrial land is a matter of survival, particularly as they are required to relocate production facilities out of residential areas. However, industrial land remains scarce and expensive. According to enterprises, clean land is not only a place to build factories, but also their foothold in the value chain. Without stable land, SMEs cannot be committed to long-term investment, productivity improvements, or competitiveness. Given that most of them are small and medium-sized in scale, the majority of enterprises in the locality find it extremely difficult to meet the stringent conditions required to gain access to production land in industrial parks, let alone in industrial clusters.

In this context, small enterprises and start-ups are often compelled to rent residential land or small plots, which creates significant obstacles to scaling up, making systematic investment, and ensuring long-term development. “We always aspire to grow stronger and be able to lease production sites within concentrated areas allowed by the State. However, our current resources remain insufficient.  As a last resort, we have to operate outside concentrated planned zones. We know that things have to change in the long term, but we must survive now in order to seek future opportunities,” shared the owner of a mechanical engineering company.

Alongside providing support for enterprises, the State needs to adopt appropriate financial policies for infrastructure investors in industrial parks and clusters, encouraging them to extend greater attention and offer preferential conditions for SMEs.

 

Industrial parks must prioritize land allocation for SMEs

Encouragingly, the Party Central Committee issued Resolution No. 68-NQ/TW on May 4, 2025 regarding the development of the private economy. This resolution outlines a series of policies designed to remove institutional barriers and foster the comprehensive growth of enterprises. Notably, the resolution requires localities to allocate at least 5% of their land resources in industrial parks and clusters to SMEs, innovative start-ups, and high-tech enterprises, alongside preferential policies such as a 30% reduction in land rent for a period of five years. This marks a significant opportunity for SMEs to expand and strengthen their competitiveness and establish a stronger market presence.

To implement Resolution 68, practical solutions must be accelerated. On May 17, the National Assembly adopted Resolution No. 198/2025/QH15, introducing several special mechanisms and policies to promote the development of the private sector. According to Bui Thu Thuy, Deputy Director of the Department for Private Enterprise and Collective Economic Development under the Ministry of Finance, the Ministry is collecting feedback on the draft Government decree guiding the implementation of Resolution 198. The draft stipulates that each industrial park and cluster must allocate 20 hectares or 5% of land resources for SMEs, private technology firms, and start-ups. These enterprises would also be entitled to a minimum 30% rental discount, funded by local budgets.

Expressing his expectations for these new policies, Dang Van Diem, Chairman of the Dong Nai Business Federation, stated: “This is a time when the private economy, particularly SMEs, is highly valued. The overarching policies are in place; what the business community is expecting are stronger and more positive actions from the State in implementing these policies at the local level. In particular, resolving bottlenecks and facilitating SMEs in getting access to production land at affordable costs is vital, as it determines the effectiveness of plan to relocate enterprises and production facilities into concentrated industrial zones that Dong Nai is currently developing.”

By: Van Gia

Translated by: Quynh Nhu – Thu Ha