Ho Chi Minh City Business Outlook 2026: Growth, Business Exits and Rising Compliance Pressure

Specifically, Ho Chi Minh City recorded 34,096 newly established enterprises, up 22.81% year-on-year. At the same time, 7,483 enterprises completed dissolution procedures, an increase of 158.66%, while 31,321 enterprises temporarily suspended operations, up 10.51%. In total, 38,804 enterprises fell into the category of businesses withdrawing from the market during the first seven months of the year.

Importantly, 38,804 does not mean that all 38,804 businesses have permanently closed, since the majority were temporarily suspended. Therefore, this figure alone is not sufficient to conclude that the market is in recession. Instead, it reflects a market undergoing stronger polarization: new businesses continue to enter the market actively, while companies with limited financial resources, management capabilities, or adaptability are facing greater pressure.

Capital Is Still Flowing, but It Is Shifting

• Looking only at the number of businesses exiting the market may paint a negative picture. However, other economic indicators suggest that manufacturing and consumer activity in Ho Chi Minh City continue to maintain positive momentum.
• During the first seven months of the year, the Industrial Production Index (IIP) increased by 10.7%, while total retail sales of goods and consumer service revenue rose by 13.3%. The city also attracted more than USD 9.8 billion in FDI, up 44.45% year-on-year, while state budget revenue reached approximately VND 575.46 trillion, an increase of 20.7%.
• This suggests that the issue is not that "there are no opportunities left in the market." Rather, the standards required for a business to survive and scale are becoming increasingly demanding.

Why Is the Business Environment Becoming More Challenging?

Businesses are facing growing cost pressures. Economic reports from Ho Chi Minh City indicate that rising logistics costs and input material prices are putting pressure on business resilience and profit margins, particularly for companies with limited financial capacity.

At the same time, requirements around corporate governance and regulatory compliance are becoming increasingly important.

Since late 2025, regulations concerning deductible expenses for corporate income tax purposes have changed significantly. For purchases of goods, services, and other payments of VND 5 million or more per transaction, businesses must have non-cash payment documentation, in accordance with applicable regulations, in order for such expenses to qualify as deductible expenses.

In parallel, data sharing and cross-checking between the tax authorities and Vietnam Social Security are being strengthened. Although data-sharing mechanisms have existed for years, the development and integration of digital databases continue to accelerate in 2026.

As a result, businesses will find it increasingly difficult to maintain inconsistent information across accounting records, employment records, payroll data, and social insurance obligations.

The Workforce Cost Equation Also Needs to Be Recalculated

A common mistake among new businesses is to focus only on gross salary when preparing their workforce budget.

In reality, employers must also account for mandatory contributions to social insurance, health insurance, and unemployment insurance. For standard cases, the employer contribution rate is approximately 21.5% of the salary fund used as the basis for insurance contributions. In addition, employers are required to contribute 2% of the salary fund used as the basis for mandatory social insurance contributions to the trade union fund.

Therefore, workforce planning is not simply about "whether you can hire the right people." It is also about whether the company has sufficient resources to retain its workforce when revenue has not yet reached expectations.

Restructuring Does Not Automatically Mean "Resetting" Tax Incentives

Some businesses may choose to restructure or establish a new legal entity when their business model changes. However, establishing a new company does not automatically mean that the business will qualify for tax incentives.

Current incentive policies for small and medium-sized enterprises and innovative start-ups come with specific eligibility requirements and exclusions. Therefore, the decision to dissolve an existing entity and establish a new one should be evaluated from legal, tax, financial, and strategic perspectives—not simply as a way to optimize tax benefits.

5 Things Business Owners Should Prepare

1. Manage cash flow before managing revenue

• Do not build financial plans based solely on projected revenue. Businesses should develop multiple cash-flow scenarios and maintain a sufficiently long runway to sustain operations while revenue remains uncertain.

2. Standardize accounting and tax compliance from day one

• Separate personal and corporate finances, use electronic invoices in accordance with regulations, and pay particular attention to non-cash payment requirements for expenses of VND 5 million or more.

3. Calculate the true "total employment cost"

• Workforce budgets should cover not only gross salaries but also mandatory insurance contributions, trade union contributions, benefits, recruitment costs, training, and employee replacement costs.

4. Proactively manage legal risks

• Businesses with related-party transactions need to pay close attention to transfer-pricing declaration and documentation requirements, as well as regulations governing deductible interest expenses. Businesses temporarily suspending operations must also complete the required notifications and related obligations in accordance with applicable regulations.

5. Pursue lean growth

• Rather than making large investments from the outset, businesses should validate market demand, test products or business models at an appropriate scale, control receivables, and expand only after key business indicators have been proven.

The Market Is Still Open, but It Is No Longer Forgiving

The first seven months of 2026 show that Ho Chi Minh City is not a market that is closing down. Manufacturing, consumer spending, FDI inflows, and state budget revenue have all maintained positive growth.

At the same time, nearly 39,000 businesses falling into the category of temporary suspension or completed dissolution demonstrate that the ability to enter the market does not necessarily translate into the ability to survive in it.

In this new phase, competitive advantage will not belong only to businesses with good ideas or rapid growth. It will increasingly belong to companies that can manage cash flow, control costs, build the right workforce, and—most importantly—embed compliance into their operations from the very beginning.

The market is not closing. But the bar for staying in business is rising.