Hanoi – Vietnam's business community faces a complex landscape in 2024, marked by global economic uncertainties and domestic challenges. Experts emphasize the crucial need for institutional reform and robust business support to foster growth and resilience.
The global economic outlook remains uncertain, with risks stemming from trade protectionism and fluctuating monetary policies. These pressures particularly impact export-dependent economies like Vietnam. Domestically, businesses are grappling with weakened consumer purchasing power, declining confidence, and rising input costs, exacerbated by the unpredictable effects of climate change and natural disasters.
To bolster the private sector, the General Statistics Office highlights the importance of institutional reform and a more favorable investment environment. Key recommendations include:
Formalizing Individual Businesses: Integrating individual enterprises into the amended Law on Enterprises would provide clearer legal recognition and support.
Improved Data Sharing: Establishing better mechanisms for data sharing between ministries, local authorities, and the national business registration database would facilitate more effective policy formulation.
Addressing Bottlenecks: Removing institutional obstacles and improving access to capital at suitable interest rates are crucial.
Access to finance remains a primary concern. Businesses are calling for greater access to funding and targeted financial support policies. The transition to a green and sustainable economy, while offering opportunities in markets like the EU and the US, requires substantial investment in clean technologies and renewable energy. Experts stress the need for government-backed financial support programs, including preferential interest rates, to facilitate this transition, particularly for small and medium-sized enterprises (SMEs) struggling to meet international environmental standards. The lack of leading technology companies and a cohesive domestic supply chain further complicates this shift.
Despite some government support, businesses face difficulties accessing sufficient capital. Many struggle with bad debts, hindering their eligibility for loans. This has forced some companies to exit the market. Experts are calling for revisions to existing regulations, such as Resolution 10 from 2017 on private economic development, and the full implementation of provisions within the Law on Support for SMEs, including corporate income tax reductions. The establishment of a nationwide credit guarantee fund for SMEs is also proposed to address the limitations of existing regional funds.
2024 saw over 157,200 new business registrations in Vietnam, with a total registered capital of over VNĐ1.5 trillion. However, these figures represent a slight decline compared to 2023. While nearly 76,200 businesses returned to operation, a record high, the number of businesses withdrawing from the market surged by 14.7%, reaching nearly 198,000. These statistics underscore the fragility of Vietnam's business ecosystem and the challenges businesses face in the current economic climate. The need for targeted support, streamlined regulations, and improved access to finance is more critical than ever for Vietnam's business community to weather these challenges and thrive.
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