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| Household businesses and enterprises joining the work of trade promotion |
Policy Adjustment is Inevitable
Promoting the development of the private sector is regarded as a cornerstone of socio-economic development. This is underscored by Resolution No. 68-NQ/TW dated May 4, 2025, of the Politburo on private sector development, and Resolution No. 198/2025/QH15 dated May 17, 2025, of the National Assembly on special mechanisms and policies for promoting the private economy. These resolutions clearly affirm that the private sector is one of the most important driving forces of the national economy, serving as a pioneer in science and technology development, innovation, and digital transformation.
To turn this orientation into reality, the City People’s Committee has issued a plan to implement Resolution No. 68, clearly defining specific tasks to be the basis for organizing implementation as well as monitoring and supervising its execution, thereby ensuring that the private sector becomes the most important driving force of the local economy. At the same time, the plan sets a target that by 2030, the city will have approximately 12,000 operating businesses, contributing around 40% of total budget revenue and creating jobs for approximately 165,000 local workers.
Accordingly, the city is focusing on communication efforts to raise awareness and promote action, rebuild confidence to develop the private sector. Furthermore, the city is also giving priority to improving investment and business environment; accelerating the implementation of policies on supporting businesses in accessing land and production facilities, as well as tax and fee incentives. Human resource development, technology innovation, and digital transformation are among Hue City’s key concerns. In this context, support policies for newly established businesses are regarded as a strategic “launching pad”, not only helping businesses stabilize and grow during the high-risk early stages but also contributing to sustainable economic development. However, practical implementation in recent years shows that some of these support policies have not been well aligned with reality, and their effectiveness remains limited.
A typical example is the initial interest-rate support policy under Resolution No. 18/2019/NQ-HĐND dated December 10, 2019, which stipulates a number of support measures for newly established enterprises in Thua Thien Hue Province (now Hue City), but has yet to prove effective. Most newly established businesses and those converted from household businesses have been unable to meet the eligibility requirements to access this source of financial support. Meanwhile, small and medium-sized business development funds, with such a range of attractive incentives in terms of capital sources and interest rates that businesses could access more easily. Therefore, this support policy needs to be adjusted to better align with practical conditions.
For household businesses converting into enterprises, the most common difficulties are related to financial statements and corporate accounting practices. Therefore, maintaining and extending the period of support for costs of renting accounting service, as stipulated in the above-mentioned resolution, is considered appropriate to encourage household businesses to make the transition into enterprises.
In addition, during the transition from the presumptive tax regime to the tax declaration method, household businesses are required to adopt electronic invoices, including e-invoices connected to cash registers. Support policies for newly established enterprises in relation to electronic invoices and e-invoices generated from cash registers will serve as a strong incentive for household businesses to convert into enterprises.
More Support Policies are Needed
At a recent session of the City People’s Council, delegates voted to adopt a resolution stipulating several support policies for newly established businesses in the city. The resolution inherits existing policies while adding new measures to assist businesses during their initial entry into the market. Accordingly, newly established businesses (excluding foreign-invested businesses) are provided with financial support for the use of public digital signature services during the first year, to enable online tax declaration and payment, electronic customs clearance, insurance declaration and submission, and the signing of other electronic documents, with a support level of VND 1.5 million per business. Additionally, businesses are supported with VND 1.5 million per business for the cost of using electronic invoices upon their first registration for use.
Newly established businesses converted from household businesses that register to apply electronic invoices generated from cash registers will also receive support for the cost of purchasing cash registers connected to the tax authority. The maximum support level is set at 50% of the cash register purchase cost for the first 5,000 household businesses converting into enterprises. Additionally, micro-enterprises converted from household businesses are eligible for support covering accounting service costs during the first three years, with a maximum support period of up to 24 months at a rate of VND 1 million per month per business.
According to the Department of Finance, around 6,500 businesses are under operation in the city area. In 2025, the city recorded 1,050 newly established businesses, which meets the set target; 316 businesses resumed operations, up 6%; and 176 businesses were voluntarily dissolved, down 2%. Furthermore, during the year, 50 household businesses in the city converted into enterprises. With over 1,000 newly established businesses each year following the implementation of these policies, particularly those supporting the conversion of household businesses into enterprises, the Department of Finance expects a strong increase in the number of enterprises converted from household businesses in the coming period. An estimated 200 newly established businesses are projected to originate from such conversions, accounting for about 20% of the total number of new businesses established each year. Accordingly, these support policies not only encourage business development but also accompany businesses during their initial market entry, laying a solid foundation for their long-term growth.