Vietnam aims to create one million new businesses by 2030

THE HANOI TIMES — Vietnam should prioritize resources and support the growth of small- and medium-sized enterprises (SMEs), with the goal of creating at least one million new businesses by 2030.

This goal was set by Prime Minister Pham Minh Chinh in Directive No. 10 issued on March 25 on the development of SMEs. The prime minister stressed that this sector must also grow in quality, scale, and contribution to the economy.

Vietnam originally targeted to have one million businesses by 2020 under Resolution No. 10/2017, with a revised target of 1.5 million this year. However, the country currently has less than one million businesses, about two-thirds of the target.

The private sector plays a vital role in the economy, contributing about 51% of GDP and more than 30% of total budget revenues by 2023. However, SMEs dominate the sector, accounting for 98%. Many are struggling to scale up and compete internationally.

To address this, the prime minister has directed government agencies to prioritize support for SMEs, focusing on innovation, competitiveness in global value chains, digital and green transformation, new business models, and technology adoption.

"Authorities must put businesses and citizens at the center of their efforts and actively remove barriers," the prime minister said, emphasizing that challenges should not be used as an excuse for inaction. He also stressed that economic and civil matters should not be unnecessarily criminalized.

Under Decree No. 80/2021, small enterprises are defined as those with capital of less than VND20 billion (US$780,000) in agriculture, industry and construction, or less than VND50 billion (US$1.95 million) in trade. Medium-sized enterprises are those with a maximum capital of VND100 billion (US$3.9 million).

In economies such as Japan, South Korea, and Taiwan (China), medium-sized enterprises make up 10-30% of the business landscape. The relatively small number of such firms in Vietnam has resulted in a weak pipeline of companies that can grow into large enterprises, experts said.

A key task outlined in the prime minister's directive is to improve policies, streamline administrative procedures, and ensure a fair and business-friendly environment. He has ordered ministries and local governments to reduce processing times, compliance costs and unnecessary business requirements by at least 30% this year. Regulatory oversight should shift from pre-approval to post-inspection, with enhanced monitoring and enforcement.

The Ministry of Finance has been tasked with accelerating loan disbursements from the SME Development Fund to provide businesses with affordable credit. It must also finalize regulations on digital assets, tokenized assets, and cryptocurrencies and submit a legal framework to the government by March.

The State Bank of Vietnam has been asked to prioritize lending to key economic sectors, including manufacturing, consumption, investment, and exports, as well as new growth drivers such as digital transformation, green transition, circular economy, and innovation.

Beyond policy and financing, the prime minister has also called on ministries and local authorities to support SMEs in developing a skilled workforce.