Vietnam’s private sector continues to expand rapidly in both enterprise numbers and overall scale. According to data from the Ministry of Finance (MoF), as of August 31, Vietnam had 1,071,731 operating enterprises with total registered capital in excess of VND32,500 trillion ($1.25 trillion). Private enterprises accounted for 96 per cent of all enterprises and held approximately VND24,500 trillion ($942.3 billion) in registered capital, equivalent to 75.2 per cent of total registered capital across the market. Yet behind these impressive figures, the private sector’s underlying capacity continues to reveal significant weaknesses.
The Vietnam Private Sector Economic Report 2025, prepared by the Vietnam Chamber of Commerce and Industry (VCCI), highlighted a persistent structural weakness: Vietnam’s private sector is “large in number but small in individual scale.” More than 80 per cent of domestic private enterprises have fewer than 50 employees, while 70 per cent have registered capital of less than VND10 billion ($384,615). This shortage of both human resources and financial capacity has left the economy without enough leading enterprises capable of driving supply chains, while leaving a large number highly vulnerable to even modest market fluctuations.
Internal constraints
Beyond their limited scale, private enterprises also face a range of internal constraints and an unfavorable business environment.
First, access to capital remains a major challenge. The proportion of enterprises reporting difficulties in accessing capital has remained high, at more than 50 per cent, with little sign of improvement. The formal credit system remains heavily reliant on collateral, putting private businesses at a disadvantage in both borrowing conditions and interest rates. At the same time, cumbersome procedures and the persistent presence of “informal costs” are directly discouraging business operators.
Second, institutional risks and compliance costs remain significant. The share of enterprises reporting difficulties related to policies and regulations has risen sharply, from 16.9 per cent to 24.3 per cent. Businesses are effectively operating in an environment of uncertainty, with only 6-8 per cent able to predict policy changes “frequently” or “always.” Limited timely access to draft regulations also deprives businesses of opportunities to provide input and prevents them from proactively adjusting their business plans.
Third, barriers to market entry and hidden costs remain an obstacle. Though business registration can now be completed in less than one month, the quality of overall administrative services has not kept pace. Unclear guidance, underdeveloped online registration systems, and the conduct of some implementing officials often require businesses to revise and resubmit documents multiple times, resulting in significant losses in terms of time and administrative costs.
More concerningly, informal costs arising across a range of processes, from obtaining business and construction permits to handling imports and exports and accessing infrastructure, remain invisible barriers that undermine businesses’ incentives to formalize and expand production.
Removing key bottlenecks
Mr. Dau Anh Tuan, Deputy Secretary-General of the VCCI, said the government should, in the next phase of development, improve access to capital and diversify financing channels for the private sector; enhance the transparency, stability, and predictability of the policy and legal environment; simplify market entry procedures and reduce informal costs; while strongly promoting innovation and digital transformation at businesses.
This includes accelerating the shift from collateral-based lending toward lending based on cash flow, business plans, and value chains, in line with the direction set out in Politburo Resolution No. 68-NQ/TW. The State Bank of Vietnam should issue specific guidance on criteria for non-collateral-based credit assessment while expanding the range of eligible collateral to include intangible assets and future assets.
At the same time, the quality of regulations should be improved by making them clearer and more consistent and reducing overlaps between legal documents. “The obstacle today is not the lack of a legal framework, but the quality of regulations, contradictions between legal documents, and, in particular, implementation,” Mr. Tuan said, calling on drafting agencies to strengthen substantive regulatory impact assessments (RIA) and ensure sufficiently-long transition periods for businesses to prepare.
The quality of guidance and business registration procedures should also continue to improve. Currently, only 19.3 per cent of enterprises do not need to revise their applications, while nearly 10 per cent must make four or more revisions. Business registration agencies should standardize guidance, publish sample application checklists, and strengthen online support to reduce repeated revisions.
At the same time, informal costs should be decisively reduced throughout the entire chain of interactions between businesses and the public sector. International comparative data shows that 26 per cent of businesses in Vietnam have had to make “facilitation payments” when applying for operating licenses; nearly three-times the regional average of 9.5 per cent. Similar problems are reported in obtaining construction permits, at 31.4 per cent, and import permits, at 32.3 per cent.
Administrative processes should also be further digitized, while internal oversight should be strengthened and business satisfaction surveys introduced as a tool for monitoring service quality.
Call to action
At the launch of the “Listening to Build” initiative, Mr. Bui Anh Tuan, Director General of the Department of Private Enterprise and Collective Economy Development at the MoF, said the government, the Prime Minister, and ministries are making a concerted effort to remove obstacles and unlock resources in support of socio-economic growth.
This determination is reflected in the implementation of Resolution No. 35/NQ-CP, under which, for the first time, the government has established a highly-specific roadmap for addressing obstacles facing businesses. The handling of feedback and recommendations from the business community has become a mandatory item in reports for regular government meetings, with at least half a page of each resolution dedicated to reaffirming government directives.
Mr. Tuan also highlighted a major shift in how the government collects and handles feedback from the business community. The process is now clearer, more specific, and measured through substantive outcomes. A joint working group comprising the MoF’s Department of Private Enterprise and Collective Economy Development, VCCI’s Legal Department, and the Government Office continually updates a detailed tracking system covering which organization raised an issue, the relevant sector, the specific article or law creating the obstacle, and the status of its resolution. The report is compiled weekly for submission to government leaders.
Assessing the “Listening to Build” initiative, an MoF representative described it as a particularly significant initiative involving direct participation from the private sector. This cooperation means that efforts to resolve business difficulties are no longer ad hoc, but are becoming part of a regular, transparent operating mechanism with measurable results.
In practice, regulators have moved directly into areas of concern. At the MoF, for example, which receives substantial feedback on sensitive areas such as taxation, customs, and real estate, Ministry leaders have directed officials to hold direct dialogue and work with individual business associations and enterprises. Unclear issues are discussed and addressed directly by regulators, helping generate greater confidence within the business community.
With close coordination between the MoF and the VCCI, the business and investment environment is expected to undergo substantive improvements, in line with the government’s message: “Remove bottlenecks and unlock resources for the country’s socio-economic development.”
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