Review of key policies supporting private sector development in Viet Nam

The private sector has become a key pillar of Viet Nam’s economy, contributing nearly half of gross domestic product (GDP), generating more than 30 per cent of State budget revenue, and employing over 80 per cent of the workforce. Despite its growing importance, small and medium-sized enterprises (SMEs), which account for the vast majority of businesses, continue to face structural constraints that limit productivity, competitiveness, innovation, and participation in global value chains.

This report reviews the policy and regulatory framework supporting private sector development in Viet Nam, with a focus on SMEs. Drawing on an analysis of laws, regulations, policy documents, and stakeholder consultations, it assesses the effectiveness of existing policies and identifies key institutional barriers to enterprise growth. The review focuses on eight policy areas: business environment reforms, access to finance, tax incentives, human resource development, science and technology, innovation and digital transformation, green transition, SME–foreign direct investment (FDI) linkages, and the formalization of household businesses.

The findings show that, despite significant progress in improving the legal framework, implementation challenges remain. SMEs continue to face regulatory inconsistencies, limited access to finance, skills shortages, weak innovation capacity, barriers to green transformation, and insufficient integration into FDI-led supply chains. Household businesses also encounter substantial obstacles to formalization.

To address these challenges, the report proposes policy recommendations to strengthen the enabling environment for private sector development. These include simplifying regulations, expanding access to finance, improving workforce skills, promoting innovation and technology adoption, supporting green and digital transitions, strengthening SME–FDI linkages, and facilitating business formalization. The report emphasizes the importance of a strategic and facilitative State role in fostering a dynamic, productive, and resilient private sector that can drive inclusive and sustainable economic growth in Viet Nam.