Vietnam's private sector in 2025: New drivers needed for breakthroughs

At the launch ceremony of the Vietnam Private Economic Report and the Provincial Competitiveness Index (PCI) 2025, Mr. Dau Anh Tuan, Deputy Secretary General and Director of the Legal Department of the VCCI, provided an overview of Vietnam's private sector. In 2025, with its profound administrative changes, Vietnam's economic landscape presents both hopeful prospects and urgent bottlenecks that need to be addressed to create momentum for a new phase of growth. 

Data from the report shows that the private sector holds a dominant position in terms of numbers, accounting for 96.6% of all active businesses in Vietnam. Over 1 million businesses are considered a backbone of the economy. However, behind this enormous number lies a concerning reality: the internal strength of this sector remains very weak.

Specifically, over 80% of businesses have fewer than 50 employees, and over 70% have registered capital of less than VND 10 billion. This makes the resilience of Vietnamese private enterprises to market shocks more fragile than ever. The business "thermometer" for 2025 clearly reflects this caution, with only 30.9% of businesses planning to increase their size, while 54.8% chose to maintain their current size to "explore" the market.

This uncertainty stems from three major challenges: barriers to output markets, difficulties in accessing finance due to a lack of collateral, and the low predictability of the legal environment.

For the first time in many years, concerns about capital have been relegated to second place. Instead, 60.2% of businesses reported that their biggest challenge currently is finding customers. Declining market demand has become a direct barrier, particularly severe in the manufacturing industry (64.4%) and agriculture, forestry, and fisheries (60.4%).

While no longer the top concern, access to finance remains a "narrow door." As many as 75.5% of businesses admit they cannot get loans without collateral. This shows that credit flows are not truly aligned with business plans or actual cash flow, leaving businesses with good business ideas but lacking collateral in a difficult situation.

Furthermore, the report also warns about two weaknesses: innovation and management capacity. Only 8.8% of businesses implement product innovation, and the majority (92.6%) still operate under a family business model, lacking the professionalization needed to scale up.

In particular, this year's report pays close attention to the household business sector, with 6.1 million households providing livelihoods for approximately 10 million workers, considered a huge social safety net for the economy.

However, survey data raises concerns: 81.5% of business households reported a decrease in revenue, and 73.7% only had very small profits, only enough to maintain a minimum standard of living. Despite being in a difficult period, the motivation for business households to "grow" into businesses is very low, with only 15.6% of business households. The main reason is not a lack of potential, but rather concerns about tax obligations, complex accounting procedures, and inspections outweighing the benefits of the transformation.

The highlight of this launch ceremony is the PCI 2.0. The new index focuses on core criteria such as transparency, informal costs, and the proactive nature of local government. Therefore, provinces like Bac Ninh, Da Nang, Hai Phong, Phu Tho, and Quang Ninh are leading in governance quality. Alongside the PCI, the newly introduced Business Performance Index (BPI) revealed that Ho Chi Minh City, Hanoi, and Quang Ninh are leading in terms of actual development efficiency and the innovative capacity of businesses within their areas. 

Based on this factual data, Mr. Dau Anh Tuan outlined key policy implications to promote the growth of Vietnam's private sector. The key solutions include unlocking capital through diverse financial channels and enhancing transparency and stability in the legal environment to build investor confidence. Furthermore, promoting innovation, supporting digital transformation, and creating a favorable environment for sustainable business transformation are crucial. The report is not just a collection of statistics but also a reminder that for the private sector to truly become a vital driving force of the economy, a more substantial and robust partnership from all levels of local government is needed in building a constructive and transparent business ecosystem.