Institutional barriers that need to be improved to develop Vietnam’s private economy

1. The legal and policy framework is incomplete and inconsistent

• The legal system on business is still complicated, with many overlapping and unclear regulations, making it difficult for businesses to comply and implement.
• The quality of legal documents is not high, there are many points that are not suitable for practice, and are frequently changed, causing businesses to lack confidence in the stability of the investment environment.

2. Management thinking is still heavy on control, not strongly shifting to service and creation

• The current institution still focuses on “management” instead of “service and creation”, leading to a situation of asking – giving, subjective approval, making it difficult for businesses to access land, credit, and fair investment opportunities.
• Private enterprises are not treated equally with state-owned enterprises or FDI enterprises in accessing resources and support policies.

3. Complicated administrative procedures, high compliance costs

• Administrative procedures are still complicated, many business conditions are unnecessary, causing time and cost waste and creating risks for businesses.
• The implementation of administrative reforms is still slow, not creating a truly favorable, transparent and stable business environment

4. Property rights and freedom of business are not fully protected

• Although the law has stipulated the protection of property rights and freedom of business, in reality, businesses are still concerned about legal risks, even the risk of “criminalizing economic relations”.
• The fear of risk and lack of trust in the system make many business households reluctant to convert into official enterprises, limiting the scale and development motivation.

5. Lack of policies to support businesses in expanding their scale and innovating

• There are not many substantive policies to support private enterprises in expanding their scale, improving management capacity, innovating technology, and building brands.
• Private enterprises have difficulty accessing resources such as capital, land, technology, and high-quality human resources due to unequal competition with the state sector and FDI.

6. The competitive environment is not truly equal

• Some preferential and support policies of the State are still difficult to access or ineffective for private enterprises.
• Competition with state-owned enterprises and FDI in terms of resources and markets is still disadvantageous for the private sector.

Conclusion

For the private economy to truly become the leading important driving force, Vietnam needs to:

• Make a breakthrough in institutional reform, ensuring a transparent, fair and stable business environment.
• Eliminate barriers to “asking – giving”, cumbersome administrative procedures.
• Substantively protect property rights and freedom of business.
• Support private enterprises in accessing resources and developing scale, innovation