The number of newly established enterprises in Vietnam is growing strongly. In the last two years, an average of 120,000 new enterprises have been set up annually but the number of bankrupt and suspended enterprises also remains high. In the first six months of this year, roughly half of all newly established enterprises have been dissolved.
In terms of scale, Vietnam still lacks large and medium enterprises. The GSO figures show that of the 505,100 active enterprises, only 10,100 enterprises operate on a large scale, accounting for 1.9% of the total number of enterprises and the rest are micro, small and medium-sized enterprises.
Micro enterprises make up a large proportion of the Vietnamese business community with 385,300 enterprises, equivalent to 74.4% of the total number of enterprises. This type of enterprise has seen the fastest growth in terms of number over the past five years but also has the lowest labour expansion.
The rapid growth in the number of small and micro enterprises in recent years reflects the effectiveness of the Government's policy of encouraging start-ups and household businesses to convert to enterprises.
As the key contributor to the GDP, enterprises play a crucial role in the economy of each country. A powerful business community can create prosperity for the national economy. Thus, the Government Resolution No. 35 on business support and development set the target of having at least one million active enterprises by 2020, including large enterprises with strong resources.
This is a highly important goal for a new phase of stable growth in Vietnam. However, with the current business situation, it is clear that this goal poses great challenges, requiring great efforts of the whole nation.
To achieve the set objective, the Government should continue to stabilise the macro economy, strongly reform the business environment, reduce administrative procedures and encourage start-ups.
In the short term, the ministries and agencies concerned must jointly work to realise the targets set at the Government Resolution 19-2018, regarding improvements to the business environment, national competitiveness capacity and removing barriers to businesses.
A comprehensive reform must be implemented in the direction of promoting business freedom and facilitating the development of enterprises. Opening the door and creating conditions for enterprises to enter the market is not enough. It is even more important to help enterprises to have easy access to resources including land, capital, and labour to invest in their production and business activities.
Therefore, the investment environment should be reformed comprehensively to ensure that enterprises are free to do business in accordance with the law, which requires the all-out efforts of the ministries, sectors and localities concerned.
