Nguyen Duy Minh (who previously worked in e-commerce) decided to establish a small business specialising in clean food in Ha Noi at the beginning of 2025. “The business startup environment has become more open, and the initial costs are not too high, so many people like me are willing to give it a try,” he said.
The synergistic effect
According to data from the National Statistics Office, in the first four months of the year, the whole country saw 77,800 newly registered businesses (a 50.7% increase) with a total registered capital of nearly 785 trillion VND (a 60.1% increase) and a total registered workforce of 357,000 (a 0.3% increase).
Dau Anh Tuan, Deputy Secretary General of the Viet Nam Federation of Commerce and Industry, believed that the high number of newly established and reactivated businesses shows that the institutional framework is moving in a more favourable direction for the private sector.
Notable among these is the Politburo’s Resolution No.68-NQ/TW on the development of the private economy. This is followed by the National Assembly’s Resolution No.198/2025/QH15, along with Government action programmes aimed at improving the investment and business environment.
Many administrative procedure reform policies continue to be promoted in line with Conclusion 18-KL/TW, focusing on reducing business conditions, simplifying licensing procedures, and lowering compliance costs for businesses. The revised laws related to investment, bidding, land, and taxation have also been improved towards greater transparency and consistency.
Policies supporting businesses with financial and credit support, tax deferrals and extensions, as well as promoting digital transformation, innovation, and the development of small and medium-sized enterprises (SMEs) continue to be implemented. The consistent message, considering the private sector as a crucial driving force of the economy, has contributed to strengthening market confidence.
“The synergy of these policies has created a ‘positive psychological effect,’ helping businesses be more confident in entering the market or resuming operations after a period of temporary suspension,” Tuan commented.
Existing pressures
L.II.N Clothing (a women’s fashion brand) announced its permanent closure after more than 10 years of operation. A brand representative shared that this decision stemmed from the realisation of a market that has changed too much. Maintaining an ineffective business model is unlikely to generate long-term value, so businesses are choosing to proactively cease operations rather than continue in an unsustainable state.
This is not an isolated case, as many businesses are simultaneously impacted by both internal and external factors. A recent survey conducted by the Private Economic Development Research Board (Board IV) in collaboration with the Ministry of Finance also revealed that the Middle East conflict has created significant pressure.
Nearly 90% of businesses reported increased input costs. More than half reported a sharp increase, commonly between 5–10%. Notably, 18.4% of businesses experienced increases exceeding 20%.
The shock has also spread to the supply chain and output markets. 52.2% of businesses were affected by disruptions to international transport and logistics, manifested by increased freight rates, longer transit times, and additional costs. Simultaneously, 53.5% reported a decrease in export orders, primarily in Asian and Middle Eastern markets.
Many businesses were forced to adopt a defensive stance. 64.5% of businesses postponed or adjusted their investment plans. Consequently, business resilience was eroded, with only 17% rating themselves as high, while the majority rated themselves as medium or low.
As a result, the wave of businesses withdrawing from the market remains high. In the first four months of the year, 72,200 businesses temporarily suspended operations, a 5.1% increase compared to the same period last year; nearly 21,500 businesses ceased operations pending dissolution, a 6.6% increase. And nearly 15,200 businesses completed dissolution procedures, an increase of 98.7%. On average, about 27,200 businesses leave the market each month.
The continuous establishment and rapid closure of businesses cause significant waste of national resources and development opportunities. Only when businesses have the conditions to survive longer and accumulate sufficient capacity can large businesses and a strong business force be formed. The focus of future policies will be on creating a sufficiently favourable business environment for businesses to survive and thrive.
Synchronising support solutions
The focus of future policies should not be solely on increasing the number of businesses. Emphasis should be placed on improving operating conditions and reducing unreasonable restrictions so that businesses can compete on equal footing with other sectors of the economy.
At the same time, approaches should shift towards building a synchronised ecosystem, rather than isolated solutions, which will address the challenges of business development more fundamentally, from the institutional environment to market opportunities and growth potential.
Regarding specific solutions, Tuan suggested continuing to implement synchronised support measures, focusing on reducing fees and charges to directly alleviate the cost burden on businesses. Simultaneously, maintaining preferential tax policies on gasoline and oil will create more room to support the economy.
In addition, consideration should be given to targeted tax deferral, postponement, and reduction programmes, prioritising sectors and fields facing significant difficulties. Simultaneously, businesses also expect the Government to provide sector-specific support packages with concrete, practical solutions tailored to each field, aiming to improve the effectiveness and absorption of policies.
These solutions, if implemented consistently and promptly, will contribute to improving the resilience of businesses and support their recovery and development in the current volatile environment.
Regarding implementation, according to Dr. Nguyen Minh Thao, Deputy Head of the Department of Enterprise Development and Business Environment, Institute of Economic and Financial Strategy and Policy, Ministry of Finance, Viet Nam has achieved many positive results in improving its institutional framework in terms of policies and legal documents.
However, the biggest challenge now is putting these reforms into practice. Solutions need to be implemented concretely, consistently, and measurably so that businesses truly feel the change in the business environment.
It is necessary to strengthen the organisation, implementation, and supervision of policy decisions, ensuring that policies do not remain merely on paper but are truly put into practice. Ministries, sectors, and localities need to proactively expand channels of communication and focus on resolving obstacles arising during implementation.
Along with this, establishing a rapid policy response mechanism is essential to promptly address practical shortcomings, shorten adjustment times, and reduce costs for businesses. Simultaneously, strengthening independent oversight and regular monitoring will help ensure policies are implemented correctly and allow for timely adjustments to any inappropriate aspects.
“In particular, administrative procedure reform and the promotion of digital transformation need to be accelerated further, thereby building a transparent, stable, and secure business environment, creating a foundation for businesses to invest and develop confidently in the long term,” this expert emphasised.
