Over 38% of Vietnamese businesses still face informal costs despite reforms: survey

More than 38% of businesses in Vietnam still pay informal charges, highlighting persistent gaps between regulatory reforms and their implementation, according to a survey by the Vietnam Chamber of Commerce and Industry (VCCI).

The survey found that 38.18% of firms incurred unofficial costs in their dealings with authorities, despite the government's efforts in recent years to streamline administrative procedures and improve the business environment.

Speaking at a meeting with the National Assembly's Committee for Economic and Financial Affairs in Hanoi on Monday, VCCI president Ho Sy Hung said many obstacles facing businesses now stem not from a lack of regulations but from shortcomings in enforcement.

According to the VCCI report, the government in 2025 simplified or abolished more than 3,000 administrative procedures and over 2,300 business conditions, while cutting cumulative processing times by more than 29,000 days. Satisfaction with online public services reached 90-91%.

However, among 879 business complaints collected in the first months of 2026, 51.4% concerned unclear or impractical regulations, 36.7% involved rules that increased compliance costs, and 11.8% related to overlapping or conflicting legal provisions.

The survey also revealed persistent implementation problems. Some 25% of businesses said actual administrative procedures differed from publicly posted processes, while 33.33% reported that processing times exceeded statutory deadlines.

In addition, 24.04% of firms said they had cancelled or postponed investment and business plans due to difficulties encountered during administrative procedures.

Hung said Vietnam is entering a period of institutional reform on an unprecedented scale and pace as the country's governance philosophy shifts from "control" to "development facilitation."

Businesses, he said, are seeking a more stable and predictable legal framework, greater consistency among regulations, and a narrower gap between policy design and implementation.

"A policy may look good on paper, but if it encounters obstacles during implementation, it will not truly reach businesses," he said.

Private sector faces mounting pressures

The VCCI report showed that Vietnam's private sector is under pressure from both long-standing structural weaknesses and external economic headwinds.

As of 2025, the sector comprised more than 1 million enterprises, accounting for 96.6% of all active businesses and employing approximately 9.27 million workers. However, growth in the number of firms has not been matched by corresponding improvements in quality, productivity, or resilience.

Last year, around 35,800 enterprises were dissolved, up nearly 67% from the previous year, while another 112,700 suspended operations. The sector continues to be dominated by small businesses with limited financial resources and low profitability.

The 2025 Provincial Competitiveness Index (PCI) survey, which covered 3,546 businesses, found that the biggest challenge is no longer market entry but market access. The share of firms reporting difficulties in finding customers rose from 45.3% to 60.2%, a level comparable to the most challenging period of the Covid-19 pandemic.

Access to finance remains a structural bottleneck. Some 75.5% of businesses said they could not obtain loans without collateral, while 93.5% of loan applications required pledged assets.

Policy predictability also remains weak, with only 6-8% of firms saying they could anticipate future policy changes.

Meanwhile, Vietnam's household business sector, which comprises around 6.1 million households and employs roughly 10 million workers, faces its own challenges. About 81.5% of household businesses reported declining revenue in 2025, while only 15.6% expressed an intention to formalize their operations by registering as enterprises.

According to VCCI, requirements related to taxation, accounting and electronic invoicing have become a "psychological barrier" discouraging many household businesses from expanding.

The organization said many of the obstacles facing businesses today stem not from a lack of regulations but from shortcomings in implementation. Responsibility-shifting among government agencies, weak inter-agency coordination, and inconsistent interpretation and enforcement of laws are significantly increasing costs for businesses.

For investment projects, the biggest bottlenecks remain planning procedures, land clearance, the determination of land-related financial obligations, and lengthy administrative processes.

Based on its survey findings and feedback from the business community, VCCI said the next phase of reform should focus not only on shortening administrative procedures but also on improving the overall quality of the business environment.

The organization proposed five key priorities: focusing on the quality rather than the quantity of administrative reforms; accelerating the shift from pre-approval controls to post-audit supervision based on digital data; improving the consistency and predictability of the legal system; treating businesses as partners in policymaking; and strengthening policy implementation and enforcement at both central and local levels.