Firms constrained by capital, weak governance, dated tech: Vietnam PM

State-owned Vietnamese companies operate with modest efficiency, sluggish investment and limited collaboration, while private firms are mostly small and medium in size, constrained by capital, weak governance, outdated tech and shallow integration into domestic and global value chains, PM Le Minh Hung said. The business climate is marred by overlapping, inconsistent legal rules and ineffective enforcement. State-owned Vietnamese enterprises are yet to fully deliver, with modest efficiency, sluggish investment and limited cooperation with private and foreign-invested peers, while private firms are overwhelmingly small and medium in size, constrained by capital, weak governance, outdated technology and shallow integration into domestic and global value chains, according to Prime Minister Le Minh Hung. Private firms with Foreign investment still exhibit fragile linkages with local firms, while technology transfer and localisation are scant, he said after a meeting between permanent cabinet members and the business community to clear bottlenecks and unlock resources for growth. The business climate is marred by overlapping, inconsistent legal rules and ineffective enforcement by some ministries, agencies and localities. Capital, labour and science-technology have not kept pace with business needs, he was cited as saying by the government. Some enterprises have been passive in policy consultations and institutional reforms, while compliance with laws, corporate governance standards and social responsibility remains inadequate. Vietnam has more than a million active enterprises with assets worth over VND 30 quadrillion ($1.14 trillion) as of late June. These contribute more than 60 per cent of gross domestic product (GDP) and 55 per cent of total state budget revenue, and employ 17.6 million workers. The prime minister stressed that all policies must aim at creating an open, stable and transparent business climate, ensuring equal access to resources, safeguarding business freedom and encouraging innovation, digital transformation, green transition and corporate competitiveness, according to domestic media outlets. He directed government agencies to finalise key draft laws for submission to the National Assembly during its 2026 sessions. Administrative reform must cut unnecessary procedures and business conditions, shift more from pre-licensing to post-inspection where appropriate, and accelerate digitalisation and data integration, he mpted. A sweeping financial market reform plan must be submitted to the prime minister this month, he added. Authorities were also directed to accelerate the development of the Vietnam International Financial Centre in both Ho Chi Minh City and Da Nang to facilitate capital mobilisation through diversified financial products and instruments.