Brian Jeffrey
Despite their increasing importance to Vietnam’s economy, private sector companies encounter various institutional challenges. Many are advocating for fair treatment, transparency, and a nurturing investment climate to flourish and grow.
AMACCAO, a diversified private economic group with three decades of experience, has launched numerous industrial and consumer brands, created about 6,000 jobs, and contributed to significant national projects. The company leads efforts in green, circular, and digital economy initiatives, with a goal of generating and retaining foreign exchange for Vietnam.
The announcement of Resolution 68 regarding private sector development, issued by the Politburo, was warmly welcomed by AMACCAO’s leadership, who appreciated the acknowledgment of the private sector as a key economic driver.
Nguyen Van Vinh, General Director of AMACCAO, highlighted that the private sector in Vietnam has consistently achieved an annual growth rate of 10-12%, nearly double the national GDP growth rate of 6%.
As per the General Statistics Office, by 2024, the private sector is expected to account for around 50% of GDP, generate 30-40% of total state revenue, and employ 85% of the national workforce. Additionally, productivity in this sector has increased by an average of 9-10% each year.
These statistics clearly demonstrate the private sector’s critical role as a fundamental pillar and dynamic engine of Vietnam’s economy.
However, Vinh pointed out that private firms have not received policy support that reflects their contributions. In contrast, state-owned and foreign-invested companies frequently benefit from preferential treatment regarding regulations, administrative processes, and policy frameworks.
He cited instances where foreign investors received expedited approvals for investments, construction permits, and tax incentives—advantages not similarly available to domestic businesses. Local enterprises also encounter numerous obstacles, particularly in the areas of inspections and audits.
A 2024 survey revealed that 33% of private companies intended to expand within the next two years, up from 27% in 2023. Among foreign direct investment (FDI) firms, that figure climbed to 37%, compared to just 26% the previous year.
While this uptick is encouraging, it still doesn’t reach pre-pandemic levels, where 50% of firms generally planned expansions. Furthermore, businesses continue to face new hurdles, including global economic instability and emerging U.S. tariff policies set for early 2025.
The Vietnam Chamber of Commerce and Industry (VCCI) indicates that these circumstances highlight the necessity for enhanced government action aimed at creating a more favorable business environment, propelling the private sector as a “lever for a prosperous Vietnam,” as suggested by Party General Secretary To Lam.
To assist local businesses in growing and expanding their regional reach, Vinh urged the government to implement more robust reforms to foster a business environment characterized by fairness and equal opportunity.
“We hope there will be no separation between private and foreign firms. Any benefits given to FDI firms should also be accessible to domestic companies,” he stated. He stressed the need for simpler and more efficient tax incentives, approval durations, and administrative procedures.
Vinh is confident that Vietnamese companies can excel in sectors like renewable energy, environmental services, manufacturing, infrastructure, and real estate—often matching or surpassing the efficacy of foreign entities. Only a handful of sectors, such as semiconductors and high-end electronics, still rely on advanced foreign technologies.
He also advocated for a reduction in bureaucratic hurdles. “Many processes are redundant, overlapping, and unnecessarily time-consuming,” he remarked.
With improved legal and institutional frameworks, Vinh is optimistic that the Vietnamese private sector can flourish on a global stage and make substantial contributions to the national economy.
A representative from another private company noted a persistent “foreign superiority complex” among Vietnamese consumers and some regulators, who often perceive foreign businesses as superior, wealthier, or more advantageous.
This attitude influences regulatory practices, with foreign firms frequently receiving preferential treatment, including tax breaks, land incentives, and faster approvals—while domestic firms face longer, more complicated processes and stricter oversight.
“This creates an impression of inequity in the business landscape,” the representative commented.
Nguyen Viet Thang, CEO of Hoa Phat Group, expressed hope regarding the government’s recognition of the private sector: “For the first time, we observe the government viewing private businesses as a critical economic segment.”
Thang noted that Vietnam has rightly elevated the role of private enterprises, which now represent the largest portion of the national economy.
Nonetheless, for the private sector to genuinely thrive, the government must extend beyond administrative reforms and construct a comprehensive and supportive business ecosystem.
In the domestic market, policies are essential to ensure healthy competition. In sectors where the government intends to nurture significant local players, suitable protective measures should bolster domestic production.
“Equally crucial,” Thang added, “is that the government offers clear economic guidance so businesses can craft the most effective investment and production strategies. Only then can private firms align with national objectives.”
