Vietnam’s private sector entering ‘a new bright phase’: report

Vietnam’s private sector has moved beyond a defensive phase and is preparing for a new period of expansion despite persistent challenges, according to a report by the Vietnam Chamber of Commerce and Industry (VCCI).

VCCI on Monday released the “Vietnam Private Economy Report 2025 and Provincial Competitiveness Index 2025 (PCI 2025)” at a ceremony held one year after the issuance of the Politburo's Resolution 68 on private sector development.

The event comes as Vietnam simultaneously pursues three major institutional reforms: reducing the number of provinces and centrally governed cities from 63 to 34, transitioning to a two-tier local government model, and institutionalizing policies aimed at making the private sector the country’s most important economic driver. The two-tier local government model features province/city and commune/ward levels only, with the district level removed.

The report was compiled from one of the most comprehensive surveys conducted on Vietnam’s private sector in recent years, covering 3,546 domestic private enterprises, 586 foreign-invested companies, and 1,001 household businesses across all 34 provinces and cities.

Private sector moving beyond defensive phase

Speaking at the event, Ho Sy Hung, chairman of VCCI, said Vietnam’s private sector had overcome its defensive period and was now building internal strength in preparation for faster growth.

According to Hung, businesses are ready to accelerate if bottlenecks related to markets, access to capital and policy transparency are addressed decisively within the next 12-18 months.

He added that the PCI and the Business Performance Index (BPI) would help more accurately measure governance quality and the capacity of local authorities to support economic development during the country’s next reform phase.

“To achieve the target of 2 million enterprises by 2030, investment and business policies need to shift strongly from a management mindset to a partnership mindset, from reducing administrative burdens to creating competitiveness for enterprises,” Hung said.

“I believe Vietnam’s private sector is truly entering a new bright phase, with renewed energy, ambition and prospects.”

Persistent structural challenges remain

Presenting key findings from the report, Dau Anh Tuan, deputy secretary general and head of VCCI’s legal department, said Vietnam had more than 1 million active enterprises by the end of 2025, up 6.6% from the previous year.

Combined with approximately 6.1 million household businesses, the private sector currently employs around 26 million workers, accounting for 50.2% of total employment nationwide.

The number of newly established enterprises reached a record 297,500 in 2025, up 27.4% year-on-year. Meanwhile, 85.7% of surveyed companies said they were maintaining or expanding operations, reflecting cautious but improving business sentiment after difficulties faced during 2023 and 2024.

Despite the positive signals, the report highlighted major structural challenges facing the private sector.

About 60.2% of businesses said they struggled to find customers, sharply higher than 45.3% in 2024 and 41% in 2022.

Meanwhile, 75.5% of companies said they could not access loans without collateral.

The share of loans requiring collateral in Vietnam reached 93.5%, significantly higher than in Malaysia (33.4%), Thailand (55.8%) and the global average of 68.3%, according to the report.

The report also warned that Vietnamese businesses continue to lag behind regional peers in innovation capacity.

Bac Ninh province tops competitiveness rankings

According to PCI 2025, the five provinces and cities with the strongest competitiveness rankings were Bac Ninh, Danang, Hai Phong, Phu Tho and Quang Ninh.

Pilot results from the 2025 Business Performance Index showed the leading localities in private-sector effectiveness were Ho Chi Minh City with 5.67 points, Hanoi with 5.41 points, and Quang Ninh with 5.33 points.