IDEAS Insights Vietnam's emergent social enterprise sector | Page 3

In Vietnam today, there are ‘nearly 300 organisations…considered to have typical
characteristics of Social Enterprises’. [1] Based on data from the only available large-
scale survey on this important topic, 41% of these are based in Hanoi, and 13% in Ho
Chi Minh City. [2] Social enterprise activities in the other 58 provinces and 3
municipalities of the country are low, indicating high interprovincial inequality.
However, it has been suggested that there are about ‘165,000 potential SEs’ [3] in
Vietnam, many of which are NGOs with the ability to undertake social enterprise
activities.
There is also a significant space for the expansion of social enterprise in Vietnam. About
24 million people in Vietnam (28% of the population) are deemed to be ‘in need’, [4]
with 6.7 million people suffering from disabilities (about 8% of the population). Of
those with disabilities, about 70% are of working age: their exclusion from the
workforce therefore represents a major loss of human capital. [5] Helping such people
reconnect to the workforce is one of many examples of where social enterprise
initiatives could support the future development of Vietnam.
Vietnam’s ‘Open Door’ (Đổi mới) policy of 1986 instigated the emergence of private
enterprise in the country, replacing the older ‘command economy’ of the Democratic
Republic of Vietnam. As a result, Social Enterprises have been active in various forms
in Vietnam since the early 1990s. [6] In 1994, the U.S. Government lifted its embargo
on Vietnam, subsequently unleashing $31 billion in Overseas Development Aid (ODA)
[7] and helping catalyse the emergence of a number of socially-focused organisations.
Four years later, in a decree in 1998, the Vietnamese government began to encourage
social institutions to participate in policy implementation. A subsequent decree in 2007
made possible the establishment of social or charitable funds. [8] As a result, public
services are increasingly understood not only to be the ‘exclusive’ responsibility of the
state.
These developments have culminated in the concept of ‘social enterprise’ being legally
enshrined in Vietnam’s new ‘Enterprise Law’ since 2014. [9] According to this law, ‘at
least 51% of annual surpluses’ must be ‘reinvested and used for registered social and
environmental goals’. [10] This is similar to the ‘Community Interest Company’ (CIC)
structure, pioneered by the British government in 2005. [11]
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