Vietnamese Businesses: Growing in Numbers, Lacking in Strength

Promising Starts and Rising Market Attraction

The business landscape in early 2026 shows steady market attraction. Nationwide, 169,842 businesses entered or re-entered the market. This figure represents an 11.2% increase year-over-year. Capital scale also improved significantly. Average registered capital grew by 35.7%.

However, mounting pressure weighs heavily on the corporate sector. In the first half of the year, 151,067 businesses exited the market. This 18.8% increase surpassed the entry rate. June trends highlighted a clearer market screening process. Newly established enterprises decreased, while capital scale for incoming firms rose sharply.

Therefore, numbers alone no longer measure business health. The real test lies in long-term survival, expansion, and sustainable growth.

Financial Vulnerability and Structural Weaknesses

According to Mr. Pham Ngoc Thach from VCCI, over one million enterprises are active. Roughly 420,000 firms report profits. Meanwhile, approximately 432,000 firms suffer losses. A substantial portion of the corporate sector fails to generate sufficient profit for reinvestment.

The root problem lies in corporate structure. Around 70% of non-state enterprises operate with capital under 10 billion VND. Over 81% employ fewer than 10 workers. Most businesses remain micro-scale with limited resources. This makes building a competitive advantage difficult.

Thin profit margins reflect this operational vulnerability. Non-state enterprises achieve a profit margin of just 2.22%. Foreign direct investment firms reach 5.25%, while state-owned enterprises record 8.3%. Minor market shifts, cost surges, or interest rate hikes can easily push small firms into crisis.

Major Obstacles: Market Demand and Credit Access

VCCI surveys identify market demand as the main barrier today. Over 60% of businesses struggle to find customers and sales outlets.

Access to credit presents another major hurdle. Over 75% of enterprises face difficulties securing bank loans. Banks require collateral for 93.5% of these loans. Consequently, small enterprises, startups, and innovative ventures struggle to secure capital, even with viable plans.

The enterprise landscape in the first six months of 2026 indicates that market attraction remains steady. Photo: Nguyen Hue/VietNamNet Newspaper

Household businesses face similar challenges. Vietnam has roughly 6.1 million household businesses, employing nearly 10 million workers. This sector provides vital economic support, yet its resilience remains fragile. Over 73% of these households report only minimal profits.

Global economic instability adds further pressure. Over 53% of manufacturing firms report reduced export orders due to international market fluctuations.

In summary, Vietnamese enterprises remain numerous but weak. Small operational scale, low profitability, limited capital, and fragile market resistance continue to hold them back.

Institutional Hurdles and Administrative Reform

Businesses also face considerable hurdles from the regulatory environment. In early 2026, VCCI received 879 business complaints regarding commercial laws. Over 51% cited unclear regulations. Nearly 37% reported high compliance costs, while 11.8% pointed to legal contradictions.

Nevertheless, clear progress exists. Authorities reduced or simplified 3,085 administrative procedures in 2025. Business satisfaction with online public services reached 90% to 91%. These figures demonstrate active reform and positive initial shifts.

Strategic Solutions for Sustainable Growth

Mr. Thach highlights five key priority solutions. First, financial institutions must unlock working capital. Lenders should transition from collateral requirements to evaluating actual cash flows and business plans.

Second, policymakers must support household businesses. Lowering tax and accounting compliance costs will help. A clear roadmap will enable capable households to transition into formal enterprises.

Third, the government must help exporters absorb external shocks. Support should focus on reducing logistics costs, diversifying supply sources, and expanding economic diplomacy.

Fourth, institutional reform must shift its focus. Evaluating execution quality must take priority over counting reduced procedures. Authorities should also strengthen post-inspection mechanisms rather than relying on pre-approval controls.

Finally, market inflow remains steady and administrative reforms show results. However, low profits, credit barriers, and institutional bottlenecks continue to limit business resilience. Improving institutional execution offers the greatest potential to drive real, lasting change in the business environment.