The 2013 Constitution of Vietnam stipulates that “Human rights and citizens’ rights may only be restricted by law when necessary for reasons of national defense, national security, public order, social safety, social morality, or community health.”

After significant efforts, the constitution also established a groundbreaking principle: “Everyone has the right to conduct business in industries not prohibited by law.”

This approach marks a departure from the more cautious stance of the 1992 Constitution, which only granted “the right to do business in accordance with the law.” This fundamental shift created vast opportunities for citizens to pursue business and trade activities.

In practice, this constitutional principle emerged after the Enterprise Law of 1999 and its subsequent amendments granted businesses almost complete freedom to operate in any industry not explicitly banned by law. Listing business activities on business registration certificates is no longer a mandatory requirement.

For many years, removing institutional bottlenecks has been a core task aimed at ensuring business freedom while reducing risks and costs for enterprises.

Government Resolutions 19 and 02, issued annually, have set ambitious goals such as significantly improving the business environment, raising Vietnam’s position in global business rankings, and cutting both input costs and informal expenses for businesses and citizens.

In some years, Resolution 02 outlined specific requirements to reduce and reform business conditions, including narrowing the scope of certain industries, removing unnecessary business conditions, and eliminating industries from regulatory lists when more effective management solutions are available or when they lack a clear scientific and practical basis. The resolution also mandated monitoring and controlling the addition of new investment and business conditions.

However, business regulations continue to proliferate like mushrooms after rain. Between 2021 and March 2024, approximately 2,866 business conditions were simplified or removed through 243 legal documents, representing around 18% of the total 15,801 business regulations. This means that about 13,000 business conditions - possibly even more - are still in force.

Economist Nguyen Dinh Cung lamented that thousands of conditional business industries and tens of thousands of related regulations form dense “forests” of barriers that hinder business activities.

Examples of these issues are evident in complaints such as, “A single chocolate bar requires 13 permits,” or bizarre regulations like “It’s illegal to feed pigs banana stems or water hyacinths.”

Furthermore, Decree No. 1/2021/CP-ND, Article 7, requires business registrants to specify their industry or trade in the enterprise registration application. Failing to do so results in the application being rejected. This interpretation has unintentionally narrowed the scope and spirit of the Enterprise Law, which upholds the principle that businesses have the right to operate in any non-prohibited sector. Instead, it restricts businesses to officially registered economic activities as determined by the Prime Minister.

This shift undermines the core intention of the 1999 Enterprise Law, which sought to eliminate the outdated “permission-based” mindset that once hindered national development. Such an approach has proven to be a major obstacle to private sector growth.

To facilitate management, state authorities have imposed countless unnecessary business conditions, leaving little room for citizens to freely engage in business activities. These burdensome “sub-licenses” infringe upon the constitutional right to business freedom, which clearly states: “Everyone has the right to conduct business in industries not prohibited by law.”

To address this issue, authorities should consider the following measures:

First, the state should clearly announce the industries prohibited for private business operations, as specified in the Investment Law. Any changes to the list of prohibited industries must be made publicly and promptly, with appropriate compensation mechanisms for those previously allowed to operate in such fields. This would prevent ministries from arbitrarily introducing new business conditions, allowing “sub-licenses” to proliferate.

Second, any organization or individual found obstructing the right to free business activity in non-prohibited industries must be deemed to have violated the Constitution and subject to legal consequences. Only by adopting a clear stance on this issue can arbitrary governance practices be curtailed and ultimately eliminated.

While the 2013 Constitution asserts, “Everyone has the right to conduct business in industries not prohibited by law,” it also maintains that “Human rights and citizens’ rights may only be restricted by law when necessary for reasons of national defense, national security, public order, social safety, social morality, or community health.”

It is essential to enshrine these reformative principles in the upcoming revised Constitution to further affirm the right to free business operations.

Tu Giang - Lan Anh