The Wealthy Worry About Succession

Another PwC survey on the next generation revealed that 42% of Vietnamese successors struggled to demonstrate their capabilities, compared to 29% across Asia and 30% globally. Among the surveyed nations, the divide between founders and their successors in Vietnam ranked among the widest.

These metrics align with what I observe while consulting on brand strategy for domestic private corporations. Across many enterprises, the most difficult inquiry is neither product development nor market capture; it is who will take the wheel after the founder, and whether that individual commands genuine trust. For most wealthy Vietnamese, assets do not sit within diversified investment portfolios; they reside almost entirely within the operating companies they lead. For these owners, transferring the enterprise and passing down the family legacy are one and the same. If that transition fails, both vanish together.

I characterize the coming ten years as the transition decade of Vietnam’s economy.

The underlying cause is historical. Nearly the entire Vietnamese private sector emerged within a narrow historical window: from the Doi Moi reforms of 1986, through the 1990 Company Law, to the 1999 Enterprise Law. First-wave founders launched ventures between the ages of 25 and 40. Today, they are between 60 and 75. Unlike Japan or Europe, where leadership handovers have occurred steadily across multiple decades, Vietnam will witness tens of thousands of first-generation transitions concentrated within a single timeframe.

This sector generates approximately half of national GDP, over 30% of state budget revenue, and 82% of all jobs. Resolution 68 on private sector development sets a target by 2030 of two million active enterprises and at least 20 major corporations participating in global value chains. Neither target will materialize if businesses built over two to three decades break apart during leadership handovers.

When an enterprise fails to secure a successor, two primary outcomes emerge. The first is a gradual sell-off: selling to competitors, investment funds, or foreign buyers. Divesting out of strategic intent is a sound business decision. Selling because no one is prepared to take over leads to depressed valuations, costs domestic brands their strategic autonomy, and allows reputation, connections, and organizational culture built over decades to slip out of Vietnamese hands. The second outcome is collapse: the enterprise retains customers and turns a profit, yet contracts or closes because no candidate is willing—or trusted—to assume leadership.

Japan—home to the world’s highest concentration of century-old enterprises—is experiencing a profound succession shock. The Ministry of Economy, Trade and Industry estimated that by 2025, 2.45 million small and medium-sized business owners would surpass age 70, with 1.27 million lacking designated successors, even though approximately 600,000 of those firms were operating profitably. Without intervention, Japan risked losing 6.5 million jobs and 22 trillion yen in GDP. One official termed this an era of mass business closures. Many firms shuttered not because of operating losses, but because heirs declined to take over, and founders’ proprietary knowledge could not be transferred in time.

Germany, with its admired Mittelstand industrial base, faces a comparable dilemma. A 2025 survey by development bank KfW covering over 13,000 enterprises indicated that roughly 109,000 businesses seek successors each year, while 114,000 plan outright liquidations. For the first time, projected shutdowns surpassed planned handovers. Approximately 47% of surveyed owners stated that no family member wished to continue the enterprise.

Culturally closer to Vietnam, Professor Joseph Fan of the Chinese University of Hong Kong tracked more than 200 listed family-owned firms across Hong Kong, Taiwan, and Singapore through transition phases, from five years before to three years after founders relinquished executive control. Average market values fell nearly 60%. Professor Fan compared the severity of these events to corporate bankruptcies and highlighted a striking pattern: the majority of shareholder value evaporated before successors assumed office. Equity markets priced in the disruption early because much of an Asian family enterprise’s valuation remains intangible—anchored to the reputation, networks, and personal capital of a single figure.

Three international examples reveal a common pattern: when founding generations retire en masse, economies can shed hundreds of billions of dollars in enterprise value. That value is lost not to shifting markets or disruptive technology, but to breakdowns in leadership handovers.

Vietnam faces two distinct hurdles. First, this marks the first comprehensive economic succession wave in modern domestic history. Japanese enterprises rely on centuries of house codes, overseas Chinese dynasties utilize family constitutions, and European estates leverage legal trusts. Today’s Vietnamese founders are pioneers in the truest sense: few ever served as designated successors, leaving them without domestic models for delegating control, just as their children lack domestic models for stepping into inherited roles. Second, the two generations operate on different conceptual systems. Parents built success through intuition, personal networks, and risk-taking across an emerging regulatory landscape. Their children, frequently educated abroad, are trained in formal governance, data modeling, and operational transparency. A founder often struggles to see a successor’s distinct strengths through an established entrepreneurial lens. This disconnect explains why 42% of Vietnamese successors find it difficult to showcase their abilities.

Over the past three years, I have asked the people I encountered about business handovers: founders, next-generation heirs, estate lawyers, family office advisors, and cultural researchers. One veteran advisor noted that whether a successor develops self-awareness or slips into complacency depends less on inherited wealth, elite schooling, or parenting style than on whether they have weathered corporate crises firsthand. Yet most wealthy Vietnamese families still navigate succession through personal trust and informal verbal understandings, operating without business wills, formalized shareholder agreements, or written family constitutions. While a founder stays healthy, operations run on one person’s personal authority. When health fails, legal vacuums turn family ties into legal disputes.

Dynasties that endure across generations in Japan, Hong Kong, Sweden, or the Philippines share four common practices. They initiate transitions early, measuring preparation in decades. They transfer intangible assets before tangible ones: core values, tacit operational knowledge, and stakeholder networks. They draft binding governance charters while relationships remain cooperative rather than waiting for disputes to emerge. And their successors earn legitimacy across the family, the organization, and the market by demonstrating competence in operational environments where failure carries real consequences.

Vietnam’s Tran Dynasty practiced this approach as early as the 13th century through the Senior Emperor (Thái Thượng Hoàng) institution: a reigning monarch abdicated while in good health, stepped into an advisory role, and allowed the heir to exercise real authority while retaining executive counsel to help navigate missteps. Historical precedents for institutional succession exist; they simply remain underutilized within modern enterprise management.

The solution does not rest on public policy alone. It requires family businesses to treat succession as a project with concrete timelines, initiated immediately rather than in response to a crisis. It demands founders willing to delegate authority while healthy and codify governance rules while relations remain harmonious. It calls on successors to recognize that legitimacy does not stem from bloodlines or executive titles, but is earned through verified capability and genuine respect for those who came before. It also requires successors to build networks among their peers, as their primary challenge is often isolation—unable to speak candidly with aging parents about strategic visions, or reveal internal vulnerabilities to operational staff.

Vietnam’s founding generation accomplished the hardest task of Doi Moi: building valuable enterprises to hand down. The remaining obligation—assuming control without diminishing what was created—belongs to the next generation. International precedents show the economic cost when this transfer breaks down. Vietnam retains one distinct advantage: time to prepare. Yet the transition decade has already begun, and that window is narrowing.

Source: vnexpress.net