Resolution No. 68-NQ/TW dated May 4, 2025 of the Politburo has affirmed the role of the private economy as the most important driving force in Vietnam's socio-economic development. With a contribution of about 50% of GDP, more than 30% of total state budget revenue and employing 82% of the total number of workers, the private economy is not only an economic component but also a pioneering force to promote growth, innovation and improve national competitiveness. However, in order for the private economy to truly become a strategic spearhead, it is necessary to have a synchronous, transparent and effective legal framework. In this article, we will give some insights from a legal perspective on why the Communist Party of Vietnam chooses private economic development as the spearhead in the coming time, especially the Party's emphasis on the role of legal reform, protecting business interests and promoting a sustainable business environment.
1. Private economy: An inevitable driving force in the context of new development
1.1. Status and contribution of the private economy
After nearly 40 years of renovation, the private economy in Vietnam has achieved significant achievements. From more than 5 million business households and hundreds of thousands of private enterprises, the sector has contributed about 50% of GDP, created jobs for more than 82% of the workforce and contributed more than 30% of the state budget. Many private enterprises have affirmed their brands in the regional and international markets, contributing to improving Vietnam's position in the global value chain.
However, Resolution 68-NQ/TW points out that the private economy still faces many legal barriers, such as overlapping regulations, complicated administrative procedures, taxes and lack of transparency in access to resources, leading to high business costs and difficulties in the early years of development. These limitations make the private sector unable to break through in terms of scale, competitiveness and innovation. In the context that Vietnam aims to become a developed country by 2045, choosing the private economy as a strategic spearhead is an inevitable decision, requiring strong legal reforms to remove current barriers.
1.2. International context and integration requirements
In the era of deep international integration, free trade agreements (FTAs) such as CPTPP, EVFTA and RCEP place high requirements on institutional reform and a transparent business environment. The private economy, with its flexibility and ability to innovate, is the most suitable force to take advantage of the opportunities from integration. However, to effectively participate in global value chains, private enterprises need to be supported by a stable, clear legal framework that is in line with international standards. Resolution 68-NQ/TW emphasizes building a business environment that meets international standards, reducing legal compliance costs and promoting business freedom, in order to meet the requirements of global integration and competition.
2. Legal perspective: Why does the private economy need to be the spearhead?
2.1. Protection of property ownership and freedom of business
One of the main reasons why the Party chose to develop the private economy is the need to ensure property ownership and freedom of business – two important legal pillars of a socialist-oriented market economy. Resolution 68-NQ/TW clearly indicates that property rights and business freedom are not fully guaranteed, leading to apprehension in the business community. To overcome this, the Resolution requires the elimination of administrative barriers, the "beg – give" mechanism and ensure that business rights are restricted only for reasons of national defense, security, social order, ethics or environment, with the limits clearly stipulated in the law.
Protecting property ownership and business freedom not only creates trust for businesses but also encourages entrepreneurship and innovation. For example, the regulations on sealing and distraint of assets in legal cases need to comply with the right authority, order and scope, in order to avoid infringing on the legitimate rights and interests of enterprises. These legal reforms are the foundation for the private economy to develop strongly, playing a spearhead role in the economy.
2.2. Perfecting the legal framework to promote fair competition
Resolution 68-NQ/TW emphasizes the importance of ensuring equal competition between the private economy and other economic sectors, especially in access to resources such as capital, land, technology and human resources. Currently, many private enterprises have difficulty accessing these resources due to lack of transparency or favorability of legal regulations for the state-owned economic sector and FDI enterprises. To overcome this, the Resolution proposes to reform the legal system, make the process of accessing resources transparent and digitize administrative procedures, such as land licensing, planning and taxation.
At the same time, the Resolution requires to cut at least 30% of the time to process administrative procedures, 30% of legal compliance costs and 30% of business conditions in 2025. These reforms not only reduce the burden on businesses but also create a level playing field, encouraging the private sector to participate in strategic areas such as high technology, digital transformation and green economy.
2.3. Promoting innovation and digital transformation
The private economy is considered a pioneering force in innovation, digital transformation and technology development. However, in order for this region to promote its potential, it is necessary to have a legal framework to encourage research and application of new technologies. Resolution 68-NQ/TW proposes to promulgate a pilot legal framework (sandbox) for technologies such as artificial intelligence, blockchain and e-commerce, and allows businesses to deduct 200% of research and development costs when calculating corporate income tax.
These policies not only reduce the financial burden but also encourage private enterprise to invest in technology and innovation. In addition, allowing enterprises to use State-owned laboratories and research centers at reasonable fees also creates conditions for the private sector to participate in high-tech projects, thereby improving national competitiveness.
3. Legal challenges and solutions
3.1. Challenges in legal reform
Although Resolution 68-NQ/TW offers many breakthrough solutions, the implementation of legal reform still faces a number of challenges. Firstly, the management mindset of "if you can't manage it, it's banned" still exists in some agencies, leading to regulations restricting the right to freedom of business. Second, the enforcement of the law is inconsistent, with overlap and inadequacy in tax, land and investment regulations. Thirdly, corrupt and negative acts in some activities such as inspection and examination still cause difficulties for businesses, reducing trust in the legal system.
3.2. Comprehensive legal solutions
To overcome these challenges, Resolution 68-NQ/TW proposes a series of comprehensive legal solutions:
- Shift from pre-inspection to post-inspection: Strengthen post-licensing inspection and supervision instead of strict control before licensing, in order to reduce time and costs for businesses.
- Digitization and transparency of administrative procedures: Applying artificial intelligence and big data in land, tax, customs, and intellectual property management, helping to reduce compliance costs and increase transparency.
- Strictly handle acts of corruption: Build a data system and AI tools to warn early of the risks of violating the law, and at the same time exempt enterprises from physical inspection for enterprises that comply well with regulations.
- Clear delineation of legal liability: Amend criminal and civil law provisions to clearly distinguish the responsibilities of legal entities and individuals, ensure the principle of presumption of innocence and avoid affecting legitimate business activities.
4. Strategic vision and role of the legal
4.1. Targets to 2030 and 2045
Resolution 68-NQ/TW sets ambitious targets for the private economy: by 2030, the sector will contribute 55-58% of GDP, achieve a growth rate of 10-12% per year, and have at least 20 enterprises participating in the global value chain. By 2045, the private economy will contribute over 60% of GDP, with 3 million businesses operating. To achieve these goals, the legal framework needs to continue to be improved, focusing on creating a stable, transparent and competitive business environment.
4.2. The role of law in building trust
A transparent, fair and effective legal framework not only helps remove barriers but also builds trust in the business community. The resolution emphasizes the elimination of prejudice about the private economy, honoring the role of entrepreneurs and encouraging entrepreneurship. Legal reforms such as protecting property rights, simplifying administrative procedures, especially reforming court and arbitration activities to accelerate the resolution of commercial disputes and support access to resources will create a strong impetus for the development of the private economy. thereby contributing to the realization of the goal of making Vietnam a developed country by 2045.
The Communist Party of Vietnam's choice of private economic development as a strategic spearhead in the coming time is a historic decision, reflecting the inevitable requirements of the new development context. From a legal perspective, reforming the legal framework to protect the right to freedom of business, promote fair competition and encourage innovation is key for the private sector to play the most important driving force of the economy. With the comprehensive solutions outlined in Resolution 68-NQ/TW, especially the very practical legal solutions raised, Vietnam has a complete basis to build a transparent and sustainable business environment, making the private economy a pillar in the country's development journey in the new era.
Lawyer Nguyen Van Phuc
HM&P Law Firm
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