8:57:11 AM | 4/22/2025
Reforming economic institutions, improving the business environment, and supporting businesses will be key to making breakthroughs in 2025.
Overview of the Business Forum 2025 organized by the Business Forum Magazine
This statement was delivered by Mr. Hoang Quang Phong, Vice President of the Vietnam Chamber of Commerce and Industry (VCCI), at Business Forum 2025, themed "Supporting Businesses to Address Challenges and Enhance Competitiveness," recently organized by the Business Forum Magazine in Hanoi.
Businesses face more risks
The world economy is facing many risks and challenges, he said, adding that geopolitical tensions, trade-tech wars, and growing trade protectionism are causing commodity prices and inflation to rise, possibly disrupting trade flows and slowing global growth. Risks related to energy security, food, cybersecurity, natural disasters, and extreme climate remain.
According to many international organizations, the reciprocal tariff policy introduced by U.S. President Donald Trump and the subsequent reactions of countries have had, and will continue to have, a strong impact on the global economy, trade, investment, and financial markets, especially on countries with large trade surpluses with the U.S., including Vietnam.
According to data from the General Statistics Office under the Ministry of Finance, economic growth reached 6.93% in the first quarter of 2025. During this period, the country recorded more than 72,900 newly registered and resumed enterprises, a year-on-year increase of 18.6%. On average, over 24,300 enterprises were established or resumed operations each month.
However, according to a nationwide survey by VCCI, only 32% of businesses said they would expand their production and operations in the next two years. Vietnam has nearly 1 million active businesses, but 98% of them are micro, small, and medium-sized, with only about 2% being large.
“These facts show that the business community is facing many difficulties and challenges. Business operations are adversely impacted by the overall context, geopolitical conflicts, and supply disruptions,” Phong said.
In addition, private businesses still face many barriers in accessing resources, especially credit, land, materials, and high-quality human resources, particularly in technology, engineering, and finance. The legal system remains overlapping, the business environment constrained, and administrative procedures are often complicated and cumbersome, leading to additional costs and risks that need to be addressed.
Moreover, the Government's preferential and support policies have not been fully effective, with limited beneficiaries and unclear fairness in access to development resources.
Currently, the U.S. government has announced a 90-day delay before imposing reciprocal tariffs on countries, including Vietnam. The time is short, and challenges remain, especially for key export-led industries. Therefore, Phong emphasized that supporting businesses in accessing new markets, boosting exports, and promoting domestic consumption should be given greater attention.
Removing institutional barriers to enable private sector breakthroughs
Mr. Hoang Quang Phong added that reforming economic institutions, improving the business environment, and supporting businesses are key to achieving breakthroughs in 2025. In addition to enhancing the private sector’s capacity to absorb capital and improve competitiveness, it is important to help them gradually master core technologies and integrate more deeply into global value chains.
Mr. Phan Duc Hieu, Standing Member of the National Assembly's Economic and Financial Committee, said that institutional reform involves not only reducing administrative procedures but also lowering compliance costs. He emphasized that the potential for reform remains substantial. Vietnam must take three immediate actions: improve the quality of current regulations - an urgent and critical task; enhance the effectiveness and consistency of legal enforcement; and ensure the quality of new legal regulations.
Given the evolving global and domestic economic context, institutional reform should not only aim to improve the business and investment environment but also generate major breakthroughs, he noted. Inappropriate legal regulations should be abolished rather than simply amended. A sustainable mechanism for institutional reform must be developed.
Globally, there are four forms of institutional reform. Vietnam has already implemented three: issuing sound regulations, implementing individual reforms, and applying reforms in specific sectors driven by certain agencies. However, reform remains difficult if driven solely by law enforcement bodies. Therefore, it is necessary to institutionalize reform as part of the legislative culture and system, moving beyond reliance on specific individuals or organizations.
“In the coming time, the Government should establish a specialized agency to oversee and promote effective institutional reform. This agency would manage the quality of the drafting process, identify priorities for regulatory improvement, coordinate legal drafting, and develop tools, guidelines, training programs, support mechanisms, and best practices,” said Hieu.
Tran Thi Hong Minh, President of Central Institute for Economic Management (Central Policy and Strategy Commission) The effectiveness of business support policies is still low Business development policies have not created the most favorable conditions for Vietnamese businesses, particularly small and medium-sized enterprises (SMEs), to invest and enhance their business capacity, participate in business linkages, and form production and supply chains at domestic, regional, and international levels. The effectiveness of SME support policies remains limited. Vietnam lacks specific policies to foster business linkages, particularly in areas such as tax incentives, access to capital, credit guarantees, and business premises, based on the degree of participation in production and supply chain linkages. Current regulations do not sufficiently facilitate access to financing within the value chain. In the coming period, it is necessary to remove institutional bottlenecks, simplify business conditions, and optimize administrative processes through digital transformation, modern ICT applications, and advanced technologies. It is also crucial to stimulate business linkages to create production and supply chains, supported by preferential policies on tax, capital access, credit guarantees, and business premises, depending on the level of participation in these linkages. Foreign investment attraction policies should be amended to include binding conditions on the localization rate and the proportion of products and services supplied by Vietnamese SMEs. At the same time, promoting the formation and growth of large-scale Vietnamese private businesses is essential. These businesses would help connect, support, and lead domestic SMEs in various industries, strengthening the country's position in global supply chains and value chains, while fostering business connections across all sectors.
Trinh Minh Anh,Chief of Office of the Inter-Agency Steering Committee for International Economic Integration Carefully studying FTAs for successful integration Free trade agreements (FTAs) present an opportunity for Vietnam to deeply integrate with the world, but leveraging FTA advantages depends on each business’s capabilities. Businesses must identify clear strategies to make the most effective use of these opportunities and contribute to the country’s sustainable economic development. Businesses must carefully study the regulations related to tariffs, rules of origin (C/O), technical standards, and non-trade commitments (labor, environment, sustainable development) in each FTA, such as CPTPP, EVFTA, and UKVFTA. They should also attend seminars and courses organized by the Ministry of Industry and Trade, VCCI, or industry associations to gain insights on how to capitalize on incentives. Furthermore, utilizing the FTA Portal of the Ministry of Industry and Trade (ftaportal.moit.gov.vn) is essential for accessing tariff schedules, regulations, and enforcement guidelines, while staying updated on early warning information related to trade defense cases. Additionally, businesses should optimize rules of origin (C/O) to ensure products meet the criteria for tariff preferences, such as localization rates or pure origin, as per each FTA. Partnering with domestic or regional suppliers within the FTA can also increase the proportion of domestic inputs and reduce reliance on imports from outside the FTA region. Enhancing competitiveness is crucial by improving product quality through investments in technology, design innovation, and compliance with technical standards, food hygiene, and safety requirements of FTA markets, such as the EU green standards. Businesses should also participate in industry associations and collaborate with them to obtain market insights, resolve emerging challenges (such as transportation costs and technical barriers), and address international disputes. By adopting these strategies, businesses will be better positioned to fully capitalize on the benefits of FTAs, ensuring long-term growth and competitiveness in the global market. Bach Thang Long, Deputy General Director of Garment 10 Corporation - Joint Stock Company Flexible and timely fiscal policies are needed As one of the long-standing and pioneering textile and garment enterprises, Garment 10 recognizes its national responsibility and continuously innovates and enhances its competitiveness to navigate challenges. From our business practices, we would like to recommend the following to competent authorities: Fiscal policies must be flexible and timely, with more preferential credit packages, along with tax and fee rescheduling, postponement, and reductions for labor-intensive industries like textiles and garments. The government should establish green financial funds, assist businesses in investing in technology, and encourage the adoption of environmental, social, and corporate governance (ESG) standards. At the same time, governmental agencies should boost trade promotion, leverage signed FTAs, and engage in bilateral negotiations with the United States to eliminate tariff barriers. They should also accelerate programs to connect businesses with global distribution systems and support promotional efforts in potential markets like the Middle East, Africa, and South America. Additionally, processes should be further simplified, and digital transformation in import, export, investment, and tax procedures should be accelerated to create a transparent and favorable business environment. The State Bank of Vietnam should introduce a separate preferential credit package for the textile and garment industry, similar to the 2% interest rate support packages for businesses affected by the COVID-19 pandemic or the previously implemented green credit package. Simultaneously, it is essential to stabilize exchange rates or establish a forex hedging mechanism for textile and garment businesses. Furthermore, all industries currently subject to a 10% tax rate should have it reduced to 8%. Nguyen Quoc Hiep,Chairman of the Vietnam Association of Construction Contractors
Improving documental quality requires clear explanations This year is considered an opportunity for construction companies, as substantial public investment is available, provided domestic companies are selected to participate. The current difficulties faced by contractors are mainly related to the Law on Tender. Therefore, in the future, contractors' opinions should be considered during the amendment of the Law on Tender to ensure it aligns with practical needs. The quality of legal documents needs to be improved due to their lack of clarity. If policy documents are transparent and clear, businesses will avoid confusion and operational challenges. Agencies should be established to review the quality of legal documents to ensure favorable conditions for businesses and the business environment. Currently, all legal documents are reviewed before being issued. However, the implementation of feedback remains limited. Therefore, to improve document quality in the future, a clear explanation of which feedback is accepted or rejected should be provided to ensure transparency and clarity.
Ngo Sy Hoai, Vice President and General Secretary of the Vietnam Timber and Forest Products Association (Viforest) Focusing on high-value products The U.S. tariff policy is challenging for businesses, particularly exporters. Export-oriented industries, such as textiles, leather and footwear, wooden furniture, and electronics, still lack self-reliance. The impact of the tariffs has revealed that growth based on extensive expansion is unsustainable. The wood industry continues to rely on cost, labor intensity, and abundant cheap inputs as competitive advantages. Therefore, when the U.S. tariff policy was announced, businesses were significantly impacted. Viforest members are negotiating with foreign partners to share the 10% tariff. However, businesses have stated that their current profit margins are below 5%, making it impossible for them to absorb the tariff. The challenge becomes even greater if they rely too heavily on a single market. In 2024, the United States accounted for 56.4% of the wood industry's exports. A few anti-dumping and anti-subsidy investigations under U.S. legislation could destabilize Vietnamese businesses. Therefore, it is time to reflect on past trends and accept the possibility of reciprocal tariffs. It is time to shift focus from quantitative growth to improving quality. For the wood industry, producing fewer but higher-value products may be necessary. Although few companies can adopt this approach, they will be less affected when reciprocal tariffs are imposed. They will be the leaders in sustainable development. |
By Mai Anh, Vietnam Business Forum
Vietnamese
