Vietnam Advances Private Sector Development Policy

Overview

On 18 May 2025, at a national conference to implement Resolutions No. 66-NQ/TW and No. 68-NQ/TW of the Politburo of the Communist Party of Vietnam, General Secretary To Lam highlighted the following four pivotal resolutions as cornerstones for ushering Vietnam into a new era of development^[1]:

1. Science, Technology, and Digital Transformation (Resolution No. 57-NQ/TW, 22 December 2024): Prioritises breakthroughs in science, technology, innovation, and digital transformation to drive modern production and national growth;

2. International Integration (Resolution No. 59-NQ/TW, 24 January 2025): Promotes deeper global integration to leverage international commitments for economic growth;

3. Legal and Judicial Reform (Resolution No. 66-NQ/TW, 30 April 2025): Aims to modernise law-making and enforcement to meet the demands of national development; and

4. Private Sector Development (Resolution No. 68-NQ/TW, 4 May 2025): Positions the private economy as a key driver, with policies to reduce administrative barriers, digitise public services, and support small and medium enterprises.

On 22 May 2025, The Economist featured General Secretary To Lam on its cover with the headline “The Man with a Plan for Vietnam”^[2]. The article underscored Vietnam’s economic achievements and challenges, portraying General Secretary To Lam as a resolute leader striving to sustain growth amid global trade tensions and domestic complexities. It depicted him as a reformer committed to achieving a “second miracle” for Vietnam’s economy.

To advance Vietnam’s private economic sector as the cornerstone of a socialist-oriented market economy, the following key resolutions were issued:

1. Resolution No. 68-NQ/TW dated 4 May 2025 of the Politburo (“Resolution 68”): Signed by General Secretary To Lam, Resolution 68 establishes the private economy as a central driver of Vietnam’s socialist-oriented market economy. It outlines policies to streamline administrative processes, promote digitalisation of public services, and provide targeted support for small and medium enterprises to enhance their competitiveness and growth.

2. Resolution No. 198/2025/QH15 dated 17 May 2025 of the National Assembly (“Resolution 198”): Adopted by the National Assembly, Resolution 198 reinforces the private sector’s role by introducing legislative measures to create a favorable business environment. It emphasises reducing regulatory barriers, improving access to finance, and fostering innovation to empower private enterprises.

3. Resolution No. 139/NQ-CP dated 17 May 2025 of the Government (“Resolution 139”): Issued by the Government, Resolution 139 operationalises the Politburo and National Assembly directives through actionable policies. It focuses on implementing digital governance tools, enhancing infrastructure, and providing incentives to bolster the private sector’s contribution to national economic goals.

The three resolutions collectively form a comprehensive policy framework for Vietnam’s private sector development which aims to transform the sector into a dynamic force for sustainable development within a socialist-oriented framework.

Resolution 68: Strategic Blueprint 

Context

1. Achievements: The private sector has grown significantly over 40 years of Doi Moi (i.e. “restoration” or economic reforms initiated in Vietnam in 1986), with strong brands emerging in regional and global markets.

2. Challenges: Micro and small enterprises, with low financial capacity, dominate technological innovation, productivity, and strategic vision. Legal and institutional bottlenecks, inadequate leadership, and limited resource access hinder progress.

3. Objective: Unleash the private sector’s potential to enhance economic growth and national competitiveness.

Guiding Principles

1. Driving force: The private sector is a pioneer in growth, employment, and innovation, vital to an independent and globally integrated economy.

2. Strategic task: Rapid, sustainable, and high-quality private sector development is a long-term priority.

3. Eliminating bias: Remove prejudices, respect entrepreneurs, and ensure equal access to resources and opportunities.

4. Business environment: Create a transparent, low-cost, and internationally standardised business environment.

5. Party leadership: Strengthen Party leadership and State enablement, centering on businesses and fostering ethical entrepreneurs.

Objectives 

1. By 2030:
   • Two million enterprises (20 per 1,000 people);
   • 20 large enterprises in global value chains;
   • 10-12% annual private sector growth, contributing 55-58% to gross domestic product (“GDP“), 35-40% to state budget, and 84-85% employment;
   • Labor productivity growth of 8.5-9.5% annually; and

   • Top three in ASEAN for technological capacity and innovation.

2. By 2045:
   • Three million enterprises, contributing over 60% to GDP, with high global competitiveness.

Key Solutions

1. Mindset renewal: Promote entrepreneurship, build trust, and combat negative perceptions.

2. Institutional reform: Develop market-oriented laws, reduce administrative burdens by 30% by 2025, and ensure fair resource access.

3. Protecting rights: Strengthen contract enforcement, intellectual property protection, and limit inspections to once annually.

4. Resource access: Improve access to land, capital, and human resources (“HR“) through digital tools, green credit, and small and medium enterprise (“SME“) support funds.

5. Innovation and transformation: Support research and development (“R&D“), digital/green transformation, and industry clusters with tax incentives and regulatory sandboxes.

Resolution 198: Special Mechanisms 

Key Provisions 

1. Scope: Applies to businesses, households, traders, and innovative startups.

2. Business Environment:
   • Limit inspections to once per year, prioritise remote checks, and penalise abuse of inspection powers.
   • Shift to post-inspection, eliminate market barriers, and ensure fair competition.
   • Avoid criminalisation of civil/economic violations and prohibit retroactive laws.
   • Broaden the scope and criteria to apply a fast-track bankruptcy resolution procedure: reduce the time taken by at least 30%.

3. Land Access: Support infrastructure for industrial parks, reserve land for SMEs/startups with 30% rent reductions for five years.

4. Financial Support:
   • 2% interest rate support for green, circular economy, and environmental, social, and governance (ESG) projects.
   • Corporate income tax (CIT)/personal income tax (PIT) exemptions for startups and SMEs; abolish licence fees from 2026.
   • Reserve public procurement up to VND20 billion for SMEs.

5. Innovation and HR:
   • Allow 20% taxable income for innovation funds and 200% R&D expense deductions.
   • Provide free digital platforms, training for 10,000 directors, and consulting for SMEs.

6. Large Enterprises: Support 1,000 pioneering enterprises and a “Go Global” program for international expansion. 

Resolution 139: Action Plan

Key Directives 

1. Urgent action: Ministries and localities to implement Resolution 198 by 2025.

2. Business environment:
   • Reduce administrative burdens by 30% by 31 December 2025.
   • Shift to post-inspection, limit inspections to once annually, and prioritise digital/remote checks.
   • Enhance data sharing and combat illicit goods.

3. Land access: Amend Land Law by 2025-2026, complete National Land Database, and reserve land for SMEs/startups.

4. Financial support: Implement 2% interest rate support and tax exemptions by 2025.

5. Innovation and growth: Support R&D, digital transformation, and large enterprise development per Resolution 198.

6. Action plan for Government program implementation: Include a detailed list of tasks specifying legal documents under the Government’s authority for review, revision, and supplementation, along with the presiding agency, coordinating agency, completion timeline, and expected deliverables.

Conclusion

Vietnam is undergoing a significant transformation in its legal and economic landscape, driven by the Government’s ambitious agenda to foster a competitive, innovative, and sustainable private sector. New laws, constitutional amendments, regulations, and guidelines are being progressively introduced to support robust economic growth and create a business-friendly environment, with clear targets set for 2030 and a long-term vision extending to 2045.

These reforms aim to position Vietnam’s private sector as a global leader by promoting transparency, ensuring equitable access to resources, and fostering innovation. The success of the initiatives set out above hinges on their effective implementation, sustained political commitment, and the resolve to overcome potential challenges such as bureaucratic delays or inconsistent policy execution. If successful, these efforts could establish Vietnam as a leading ASEAN economy by 2030, with a thriving private sector by 2045.

For businesses, this dynamic environment presents both opportunities and challenges. Therefore, proactively aligning business strategies with Vietnam’s evolving legal and economic framework is critical. Staying informed about legislative developments, engaging with stakeholders, and adapting to market shifts will enable companies to capitalise on emerging opportunities and navigate potential risks effectively.

If you have any queries on the above, please feel free to contact any of our team members.

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^[1]https://baochinhphu.vn/tong-bi-thu-to-lam-bon-nghi-quyet-dot-pha-la-bo-tu-tru-cot-dua-dat-nuoc-buoc-vao-ky-nguyen-moi-102250518122030271.htm (accessed on 26 May 2025).

^[2]https://www.economist.com/leaders/2025/05/22/the-man-with-a-plan-for-vietnam (accessed on 26 May 2025).