Creating enabling environment to strengthen private economic sector

After nearly 40 years of renewal, Vietnam's private economic sector has expanded rapidly in terms of business numbers, but most enterprises remain small in scale and continue to face bottlenecks in market access, capital, policy predictability and innovation.

As the private economic sector is now regarded as “the most important driving force of the economy,” Dau Anh Tuan, Vice Secretary-General and Head of the Legal Department of the Vietnam Chamber of Commerce and Industry (VCCI), said the priority is not simply to create more businesses but, more importantly, to help existing enterprises survive, accumulate resources and grow. Local authorities need to continue improving the quality of governance, strengthening market linkages and creating conditions for private enterprises to participate more deeply in value chains.

From “quantity” to “strength”

* Looking back on nearly 40 years of renewal, the private economic sector has undergone a major transformation in terms of its role in the economy. What are the key challenges facing the sector today?

Dau Anh Tuan, Vice Secretary-General and Head of the Legal Department of the VCCI

The development of Vietnam's private economic sector has reflected profound changes in perceptions. Once not fully recognized, the private sector has gradually established its role in the economy through a process of institutional reform. The 1990 Law on Companies and Law on Private Enterprises, the 1999 Enterprise Law and the country's deeper integration into the global economy laid important foundations for this transformation. In 2025, Politburo Resolution No. 68-NQ/TW, issued on May 4 on the development of private economic sector, marked another major turning point, identifying the private sector as “the most important driving force” of the economy and a pioneering force in the country's industrialization and modernization.

As the sector's role has grown, so have the requirements. Vietnam now has more than 1 million active enterprises, with private enterprises accounting for about 96.6%. However, more than 80% of enterprises have fewer than 50 employees, while more than 70% have capital of less than VND10 billion.

The core challenge now is how to transform a sector that is “large in number but not yet strong” into one with more enterprises capable of accumulating resources, expanding their operations and increasing productivity.

* More than 60% of businesses said finding customers was their biggest challenge in 2025. Why has market access become such an urgent issue?

— This is a noteworthy shift. Market pressures are intensifying, and finding customers and securing orders have become more pressing challenges than many of the traditional bottlenecks. Without customers and orders, it is difficult for businesses to expand production or make long-term investments. Therefore, business support policies need to place greater emphasis on trade promotion, supply-demand linkages, supply-chain connectivity and helping businesses make better use of free trade agreements.

Workers at a private mechanical engineering company in Dong Nai.

This also shows that the central challenge has changed. Previously, we focused largely on helping businesses enter the market. Now, with the number of businesses already substantial, the more important question is how to help them survive, accumulate resources and expand. In 2025, 297,500 businesses entered the market, while 227,200 exited. Most existing businesses are still not ready to expand their operations.

* Access to capital remains difficult, with 75.5% of businesses saying they cannot obtain loans without collateral. What needs to change?

— This is a structural bottleneck. If access to credit depends too heavily on collateral, young enterprises, businesses with new models and those with strong growth potential but limited assets will be disadvantaged. This shows that lending has yet to fully reflect cash flows, business plans and growth potential.

Businesses need to strengthen financial management, improve transparency and develop convincing business plans. At the policy level, the approach should gradually shift from one based primarily on collateral toward assessments of cash flows, business plans and a company's position within the value chain.

Without addressing this issue, it will be difficult for small businesses to accumulate sufficient resources to invest in technology, expand production and increase their scale.

Creating room for businesses to grow

* Against this backdrop, how do you assess the situation in Dong Nai, and what should the locality do to promote private economic sector’s development?

— In the 2025 PCI classification of provincial governance quality, Dong Nai was placed in the “fairly good” group. This provides an important foundation for the locality to continue improving its business environment and supporting the private sector.

However, what matters is whether the quality of governance can be translated into tangible improvements in business performance. Dong Nai should pay particular attention to linking private businesses with large corporations, FDI enterprises and supply chains. A small business operating in isolation will find it difficult to grow. But by gradually becoming a supplier that meets requirements for quality, management and technology, it can build capacity, accumulate resources and grow into a stronger enterprise.

* Besides market access and capital, the report also shows that businesses have limited ability to predict policy changes, while innovation remains a weakness. What challenges does this pose?

— Businesses need a transparent and predictable policy environment. Limited policy predictability can increase compliance costs and make businesses more cautious about long-term investment decisions.

Therefore, improving the business environment is not simply about cutting administrative procedures. Policies need to be more transparent, stable, accessible and predictable. At the same time, innovation is another key issue. If businesses rely solely on low-cost labor, cost advantages or traditional strengths, it will be difficult to remain competitive over the long term. They need to gradually shift toward competing on the basis of quality, technology, management, branding and innovation capacity.

“The ambition for double-digit growth and the aspiration to usher in an era of the nation's rise must be demonstrated through the growth of businesses, the livelihoods of households and a transparent, business-friendly environment. This reflects the strong determination of the political system in the new term, and we expect localities to play an important role by creating the conditions needed to unlock the potential of Vietnam's private economic sector.”

Dau Anh Tuan, Vice Secretary-General and Head of the Legal Department of the VCCI

* Based on these issues, what recommendations do you have for private businesses and Dong Nai authorities to help the private sector become a true driver of growth?

— For businesses, the first priority is to strengthen management capacity, improve financial transparency, proactively seek markets and invest in innovation. Businesses cannot simply wait for policy support; they must also strengthen their own competitiveness.

They also need to look beyond their existing markets, seek opportunities to join supply chains, raise product standards and build the capacity needed to become suppliers and partners of larger businesses. When market access is the biggest challenge, businesses need to be even more proactive in finding customers, diversifying markets and improving product quality.

For local authorities, the priority is to continue improving the quality of governance, enhance transparency and policy predictability, while creating favorable conditions for businesses to access markets, resources and value chains. The ultimate measure of effectiveness should be whether businesses can grow sustainably, accumulate resources, expand their operations and invest in new technologies.

By V. The – Translated by M.Nguyet, Thu Ha