Creating a more enabling environment for private enterprises

Businesses continue to face many difficulties

Ly Kim Chi, Chairwoman of the Ho Chi Minh City Food and Foodstuff Association and Chairwoman of Tan Dong Hiep Group, said the greatest values of Resolution No. 68 lie not only in continuing to affirm the role of the private sector, but more importantly in creating a major shift in the mindset underpinning the formulation and implementation of state management policies: from management to facilitating development, from pre-inspection to post-inspection, from procedure-based management to risk-based management, and from a control-oriented mindset to one of accompanying, encouraging, and serving businesses. The city currently has 350,000 enterprises and leads the country with an average of 23.75 enterprises per 1,000 residents. It aims to have at least 750,000 operating enterprises by 2030.

However, many businesses say that although the policy direction is sound, it has yet to deliver substantive results, with private enterprises still facing certain difficulties and barriers. The Business Performance Index (BPI) report released by the Viet Nam Chamber of Commerce and Industry (VCCI) in May showed that 60.2% of businesses had difficulty finding customers while 75.5% were unable to obtain loans without collateral.

These figures reveal a considerable gap between policy and the actual conditions needed for businesses to grow. According to Chi, three prominent issues need to be prioritised. First is the lack of consistency between the reform spirit of Resolution No. 68 and the process of translating it into specific policies. Some draft policies still tend to introduce additional administrative procedures, expand pre-inspection requirements, and create further documentation and procedural obligations. Other bottlenecks include administrative procedures, access to capital, policy implementation, and the slower-than-expected conversion of household businesses into enterprises.

Similarly, Duong Kim Quan, General Director of Bcons Construction Investment Joint Stock Company and Vice Chairman of the Ho Chi Minh City Construction Science and Technology Association, said that during project implementation, dossiers are often required to pass through numerous rounds of consultation with departments, sectors, and specialised agencies, as well as multiple appraisal stages.

Some matters require opinions from many units, but consultations are still conducted sequentially, response times are inconsistent and, in some cases, agencies offer differing views, forcing businesses to supplement, revise, or explain their dossiers repeatedly. Even a delay of a few months can generate substantial interest, management, staffing, and opportunity costs. Moreover, business lending rates have at times reached 14% per year. If a project is delayed for several years, interest costs become a major burden, but all these expenses are ultimately incorporated into product prices, meaning homebuyers must bear them.

Businesses currently face high operating costs, leaving them with limited profits and little capacity to accumulate capital for technological innovation, production expansion, or improved competitiveness. Meanwhile, small enterprises and start-ups struggle to access finance because of requirements relating to loan eligibility, collateral, and appraisal procedures. Although the legal framework is relatively comprehensive at the macro level, differing interpretations during implementation continue to prolong dossier-processing times.

Dr Nguyen Vinh Huy, Vice Chairman of the Ho Chi Minh City Business Association and Chairman of the Saigon Centre Business Association.

Dr Nguyen Vinh Huy, Vice Chairman of the Ho Chi Minh City Business Association and Chairman of the Saigon Centre Business Association, said businesses currently face high operating costs, leaving them with limited profits and little capacity to accumulate capital for technological innovation, production expansion or improved competitiveness. Meanwhile, small enterprises and start-ups struggle to access finance because of requirements relating to loan eligibility, collateral, and appraisal procedures. Although the legal framework is relatively comprehensive at the macro level, differing interpretations during implementation continue to prolong dossier-processing times.

Building business confidence

To ensure the effective implementation of Resolution No. 68, Ly Kim Chi said its spirit should serve as a benchmark in the formulation and review of draft laws, decrees, and circulars related to production and business activities. Policies should not only achieve their management objectives but also ensure stability, transparency, clarity, ease of implementation, and consistent enforcement. At the same time, substantive consultation mechanisms with the business community and associations should continue to be maintained from the earliest stages of policy formulation.

Chi also recommended that the authorities further accelerate administrative reform, modernise state management by making a stronger shift from pre-inspection to post-inspection, and accelerate data connectivity and sharing among regulatory agencies to reduce the need for businesses to repeatedly submit the same dossiers and information.

“The momentum of the private sector begins with confidence in policy. When policies become more stable, transparent, and consistent, our business community will be more willing to invest, innovate, and pursue long-term development,” Chi said.

Alongside these measures, Duong Kim Quan said reasonable interest rates must be maintained. In practice, businesses are concerned not only about high lending rates but also about the relatively high deposit rates currently offered by some banks, which are close to 10% per year. This discourages entrepreneurship and investment, as businesses may consider bank deposits a safer and less burdensome option that still provides a reasonable return.

To support businesses, Ho Chi Minh City has recently reduced and simplified 441 administrative procedures, including 435 related to production and business activities. The city has determined that it will continue introducing measures to create even more favourable conditions for private enterprises.

The Viet Nam Fatherland Front Committee of Ho Chi Minh City is currently supervising several departments and sectors regarding their implementation of the HCMC Municipal Party Committee’s action programme for Politburo Resolution No. 68-NQ/TW on private-sector development.

Truong Thi Bich Hanh, Member of the Standing Board of the HCMC Municipal Party Committee and Permanent Vice Chairwoman of the City’s Viet Nam Fatherland Front Committee, expressed hope that the supervision would enable the city to conduct a comprehensive assessment and introduce practical measures to promptly remove difficulties for businesses, allowing the private sector to develop strongly and truly become an important driver of the city’s economy.