Luu Thi Thanh Mau, Vice Chairwoman of the Vietnam Young Entrepreneurs Association and Head of the VPSF 2025 organizing committee, said nationwide provincial dialogues had repeatedly highlighted complex administrative procedures and institutional inconsistencies across sectors and levels, which burden enterprises.

Overlapping and conflicting provisions in major laws such as the Land Law, Construction Law, and Investment Law have made implementation difficult. Investment and land-related dossiers are often delayed, disrupting project execution timelines.

A lack of policy consistency and rapid regulatory changes have undermined business confidence, making it difficult to plan or adapt. Small and micro enterprises are particularly vulnerable to legal risks and the threat of criminalizing civil or economic activities. Existing regulatory and policy barriers have also hindered market entry and expansion for many firms.

Entrepreneurs also voiced concern over the absence of effective feedback mechanisms and legal advisory channels for business associations. The “top-down enthusiasm, bottom-up inertia” mindset and “ask-give” bureaucracy remain widespread at local levels. Some even noted discriminatory treatment between state-owned and private enterprises.

While local leaders have acknowledged and committed to resolving many issues raised during the dialogues, Mau noted that several critical concerns remain unaddressed and may require action from higher authorities.

One prominent issue is the application of Article 5 in National Assembly Resolution No. 198/2025, which aims to limit the criminalization of business activities.

Criminal law overreach deters innovation

According to Dau Anh Tuan, Deputy Secretary General of the Vietnam Chamber of Commerce and Industry (VCCI), businesses continue to express concern about legal uncertainties in production and investment activities, a sentiment VCCI has tracked over many years through various forums and surveys.

These risks are not limited to erratic policy shifts, but also stem from the fear of being criminally prosecuted for what are essentially civil or commercial disputes. Resolution 68-NQ/TW (2023) of the Politburo, focused on developing the private economy, recognized this issue and proposed bold solutions. The National Assembly has since institutionalized those principles in Resolution 198/2025.

Tuan pointed out that many criminal cases arise from civil disputes related to contracts, investment, bidding, and loans - matters typically governed by civil and commercial law.

Under the 2015 Penal Code, crimes such as tax evasion (Article 200), customer deception (Article 198), false advertising (Article 197), counterfeit goods (Article 192), and smuggling (Article 188) can be broadly applied to cases with purely economic or administrative implications. These offenses must be re-evaluated to clearly distinguish between criminal behavior and administrative violations or business errors.

This lack of clarity has a chilling effect on innovation. Many entrepreneurs hesitate to invest or test new business models, while others withdraw from the market altogether out of fear they could face criminal charges for ambiguous legal infractions.

Legal reform needed to boost private sector

Dr. Le Truong Son, Rector of Ho Chi Minh City University of Law, emphasized that despite Vietnam's shift from a centrally planned economy to one of the region's most dynamic market-oriented systems, significant barriers to private sector growth persist.

Highlighting the three systemic bottlenecks identified by General Secretary To Lam - institutional inefficiencies, infrastructure limitations, and human resource challenges - Son proposed several remedies. These include enhancing legal transparency, consistency, and enforcement, as well as reforming laws to promote private sector development and economic efficiency.

Dau Anh Tuan agreed, stressing that one of the main causes of criminalization risk is the vague language in criminal law. “The line between criminal acts and civil or administrative violations remains poorly defined,” he said.

“To address this root issue, we must review and revise economic crimes in the Penal Code,” he added.

Tuan advocated for aligning with the spirit of Resolution 68: criminal prosecution should be reserved for cases involving deliberate wrongdoing, fraud, serious harm, or clear intent to exploit legal loopholes. For disputes that can be resolved through negotiation, compensation, or behavioral correction, administrative or civil measures should take precedence.

“A legal framework designed to support rather than punish, one that favors civil over criminal remedies, will unleash the full potential of the private sector - an essential driver for sustainable economic growth,” Tuan concluded. “This is more than legal reform. It’s a national development strategy.”

Nguyen Le