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Only 1.8% of household businesses plan to expand, while more than 60% intend to maintain their current scale, according to findings from a household business survey released at a briefing on April 23. Vietnam Chamber of Commerce and Industry (VCCI) officials said the results point to a “survival” and “defensive” mindset among household firms facing market pressures and legal difficulties.
The survey, conducted over the past three months and covering more than 1,000 household businesses, found that 1.8% plan to expand, over 60% will keep their current operating scale, and 33% plan to shrink. VCCI also noted that some household businesses intend to dissolve within the next two years.
VCCI attributed the pessimistic trend partly to weak business activity in the previous year. More than 81% of respondents reported revenue declines, and about three-quarters are operating with very thin profit margins.
“This level is enough to survive, but difficult to accumulate funds or withstand any subsequent shocks,” said Doan Anh Tuan, Deputy General Secretary of VCCI.
When asked about the biggest constraints, legal difficulties were cited as the most pressing issue by 73% of household businesses. VCCI said this affects households more than problems related to input materials amid domestic volatility and the Middle East conflict (59%).
On tax-related obligations, more than 36% of households do not know or have only heard about electronic invoicing. A third of respondents reported lacking the devices and internet infrastructure needed for implementation, and many also do not know how to repair or handle technical errors during electronic invoicing rollout.
VCCI reported that more than 80% of household businesses avoid converting to a corporate model. Officials said the concerns include procedures, high social insurance costs, and increased audit exposure.
By revenue scale, VCCI noted that households in the 500 million to 3 billion VND group are less inclined to convert to a corporation. Only 16% of household businesses plan to convert to a company within two years.
VCCI said the main motives for conversion include genuine growth needs—such as requiring a legal entity for contracts, expanding scale, or obtaining bank loans. However, the barriers appear to outweigh these motives: VCCI stated that over 90% of households fear more complex tax and accounting procedures.
VCCI said the resulting risk perception reduces investment and expansion intent among household businesses. “The institutional environment may inadvertently keep household businesses small, defensive, and averse to growth,” said Mr. Tuan.
VCCI’s Deputy Head of the Legal Affairs Division, Pham Ngoc Thach, argued that tax, accounting, and electronic invoicing rules should be simplified to better match household businesses’ capacity, particularly micro firms, elderly household heads, and businesses in rural areas.
On proposed policy changes, the Ministry of Finance is considering raising the taxable revenue threshold to 1 billion VND. However, Le Thi Duyen Hai, Vice Chair and General Secretary of the Vietnam Tax Advisory Association, said this is not the core solution. She argued that household businesses do not lack willingness to pay taxes; instead, they need easy and transparent compliance solutions, especially regarding penalties.
“They fear the thin line of penalties; stepping over a small amount could constitute a violation,” she said.
Pham Ngoc Thach agreed that effective policy should not only tighten control, but also help household businesses feel confident to survive, recover, and grow.
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