A major goal in a defining phase

Viet Nam is entering a pivotal phase of its economic development. Achieving at least two million officially operating enterprises by 2030 remains a major challenge, especially as the country currently has fewer than one million.

Following the issuance of Resolution No. 68-NQ/TW on private-sector development, the average monthly number of new enterprises has surpassed 19,100 — an increase of nearly 48 percent compared with earlier periods. According to the General Statistics Office (Ministry of Finance), in the first nine months of 2025, more than 230,000 enterprises were newly established or resumed operations — a rise of nearly 25 per cent year-on-year.

This is a positive signal, showing that public and business confidence is being reignited after the difficult period caused by the COVID-19 pandemic and global upheavals. However, the number of enterprises withdrawing from the market remains high, with nearly 198,000 leaving in 2024.

This demonstrates that the challenge is not only to “create more” enterprises but, more importantly, to “keep them”, enabling them to grow sustainably, overcome obstacles, and continue contributing to the economy.

According to Dau Anh Tuan, Deputy Secretary-General of the Viet Nam Chamber of Commerce and Industry (VCCI), the key lies in trust — “Trust that encourages household businesses to become enterprises, trust that keeps firms from leaving the market, trust in effective support policies, and trust in a brighter entrepreneurial future,” he said.

Building trust to bring household businesses “into the light”

One of the greatest untapped resources for expanding Viet Nam’s enterprise base lies in its household- and individual-business sector. Currently, there are about five million household businesses nationwide, but only about two million are formally registered. This segment generates substantial economic value but mostly operates in the informal sector, with limited access to capital, technology, markets, and policy support.

Therefore, encouraging household businesses to convert into enterprises is a sound direction, but success requires policies that fit real-world conditions.

“If we continue applying complex regulations on accounting, taxation, and social insurance as for regular companies, these households will have no incentive to formalise,” said Tuan. He suggested developing a separate legal framework for micro-enterprises and individual businesses. Policies should be flexible and inclusive, allowing people to “step into the light” gradually rather than forcing conversion.

Trust that encourages household businesses to become enterprises, trust that keeps firms from leaving the market, trust in effective support policies, and trust in a brighter entrepreneurial future

Dau Anh Tuan, Deputy Secretary-General of the Viet Nam Chamber of Commerce and Industry (VCCI)

Recent studies show that the reasons why businesses withdraw from the market are highly diverse: high compliance costs, constantly changing regulations, limited access to capital, and inadequate premises or human resources. In particular, small and micro-enterprises — which account for more than 90% of all enterprises — have weak resilience and are easily affected by fluctuations.

Therefore, it is essential to conduct regular research to identify the root causes behind business exits, rather than merely recording the numbers. At the same time, an early warning system and a policy feedback mechanism should be established to promptly adjust inappropriate regulations, thereby strengthening the confidence of the business community.

Effective and targeted support policies

Small and medium-sized enterprises (SMEs) are the backbone of the economy, yet current support programmes remain fragmented and largely superficial. The Law on Support for SMEs, enacted in 2017, still faces numerous shortcomings, including insufficient resources and a lack of effective coordination mechanisms. Many enterprises report that they have been unable to benefit from preferential policies, while weak management capacity, limited access to credit, and a shortage of market information continue to hinder their development.

VCCI representatives suggest that Viet Nam should reform the support system along market-oriented lines, with the State acting as a “smart facilitator” that commissions professional intermediary organisations to provide services such as training, consultancy, and digital-transformation assistance.

Support policies should be differentiated by business type: start-ups need skills and networking; manufacturing enterprises need technology and financing; exporters need trade promotion and market data. The “one-size-fits-all” approach should be replaced with flexible, practical solutions.

Moreover, for sustainable entrepreneurship, education must be the starting point — equipping students with entrepreneurial thinking, practical business skills, and an innovation mindset. Local start-up programmes, incubators, co-working spaces, and investor-matching platforms are vital “launch pads” to turn ideas into reality.

Beyond policies, start-up communication plays a key role in fostering inspiration. Stories of entrepreneurs overcoming adversity and successful business models should be widely shared to ignite the spirit of “daring to dream big” among young people. Local authorities should view entrepreneurship as a new growth driver, implementing concrete measures such as reducing land-rental costs, providing legal and tax advisory support, and helping small enterprises stay resilient during their early years.

A flexible and human-centred institutional approach

According to Dr Nguyen Quoc Viet, public-policy expert at the University of Economics, Viet Nam National University, formalising the household-business sector — which contributes significantly but operates largely in the “grey area” — is a crucial part of reaching the two-million-enterprise goal.

Under Decree 70/ND-CP, from July 1, 2025, household businesses with annual revenue exceeding 1 billion VND in certain sectors (food, hospitality, retail, transport, beauty, and entertainment) must use e-invoices connected with the tax authority. Around 37,000 households will thus move from lump-sum to declared taxation. While this is intended to formalise the informal economy, some business households have reacted negatively — closing shops, pausing operations, or avoiding bank transfers — reflecting fears and a lack of trust that the policy will be enforced fairly and transparently.

Dr Viet argued that rather than viewing household businesses solely through the lens of “tax management”, they should be recognised as a dynamic component of the market economy, operating within informal institutional frameworks — that is, systems of rules, norms, and trust naturally formed within communities, enabling transactions to take place smoothly without excessive state intervention.

Rather than viewing household businesses solely through the lens of “tax management”, they should be recognised as a dynamic component of the market economy, operating within informal institutional frameworks — that is, systems of rules, norms, and trust naturally formed within communities, enabling transactions to take place smoothly without excessive state intervention.

Dr Nguyen Quoc Viet, a public-policy expert at the University of Economics, Viet Nam National University

In any economy, the informal or “underground” sector coexists alongside the formal one. It reflects the spontaneous nature of the market and serves as a “safety valve” for the livelihoods of millions of people. However, when the legal system is weak, lacks transparency, or imposes excessively high compliance costs, business entities tend to avoid entering the formal sector.

Therefore, formalising the informal sector cannot rely solely on administrative orders; it must be pursued through a comprehensive, consistent, and human-centred institutional reform process, in which laws are designed to support and align with the spontaneous operations of the market.

According to Dr Nguyen Quoc Viet, the success of the formalisation process depends on finding a balance between strengthening regulation and facilitating conditions for citizens and businesses. When laws are applied fairly, procedures are simple, and property rights are clearly protected, people will voluntarily move into the “light” because they feel safe and see tangible benefits.

Hence, institutional reform — particularly in tax policy and administration — must pursue a dual goal: strengthening state revenue while encouraging formal entrepreneurship, thereby expanding a sustainable enterprise base.

Both experts agree that to achieve the goal of two million enterprises, the decisive factor is not the number of policies but the quality of trust — trust built on fairness in law, transparency in enforcement, and genuine government partnership with businesses.

When citizens feel safe to start a business, when enterprises believe continued investment is worthwhile, and when government is viewed as a “partner” rather than a “supervisor”, Viet Nam’s business community will truly flourish.

The goal of two million enterprises by 2030 is not just a figure — it embodies a vision of a confident, inclusive, and innovative economy where every individual can realise their potential, every business is protected, and every entrepreneurial effort is respected.