Vietnam: What are the regulations on the application and procedures for financing for small and medium enterprises of the Fund?
- What is “financing” from the Small and Medium Enterprise Development Fund in Vietnam?
- What are the regulations on the application and procedures for financing for small and medium enterprises of the Fund?
- What are the regulations on the Fund's financing agreement for small and medium enterprises in Vietnam?
What is “financing” from the Small and Medium Enterprise Development Fund in Vietnam?
According to Clause 5, Article 4 of Decree No. 39/2019/ND-CP, “financing” refers to the situation in which the Fund gives its capital as a sponsorship and carries out activities in support of enhancing the capability of small and medium enterprises.
In particular, the Small and Medium Enterprise Development Fund in Vietnam is an off-budget state financial fund, operating for non-profit purposes, established by the Prime Minister under Clause 1, Article 2 of Decree No. 39/2019/ND-CP.
Vietnam: What are the regulations on the application and procedures for financing for small and medium enterprises of the Fund?
What are the regulations on the application and procedures for financing for small and medium enterprises of the Fund?
The application and procedures for financing for small and medium enterprises of the Fund according to Article 30 of Decree No. 39/2019/ND-CP are as follows:
- Application documentation for financing shall be composed of the followings:
+ Application form for financing submitted from small and medium enterprises;
+ Dossiers on production and business plans and projects of small and medium enterprises, other documents evidencing that enterprises meet financing requirements prescribed in clause 1 of Article 29 herein.
- Small and medium enterprises shall submit the application package for financing at the Fund’s main office or by post.
- The Fund shall receive and verify the adequacy of application documentation for financing; assess the feasibility of production and business plan or project and other financing requirements prescribed herein; issue a decision on approval of financing and inform requesting small and medium enterprises in writing.
In case of refusal of financing, the Fund shall inform the requesting enterprise with clear reasons for such refusal.
- The Fun shall be responsible for issuing verification and assessment procedures, making a decision on whether application for financing is accepted, disbursing financing capital according to the principles of clear distinction of responsibilities and obligations of individuals or organizations involved in the process of verification, assessment and grant of the financing decision and disbursement of financing capital.
- The Fund shall establish a review committee to consider granting decisions on approval of financing. The Members' Board of the Fund shall decide the organizational structure of the review committee.
- The Fund shall have the right to hire independent consultant or establish the financing advisory group composed of scientists, administrators and/or experts with proper specializations to give their counsels on financing.
What are the regulations on the Fund's financing agreement for small and medium enterprises in Vietnam?
According to Article 31 of Decree No. 39/2019/ND-CP on the Fund's financing agreement for small and medium enterprises in Vietnam as follows:
- Financing agreement between the Fund and the receiving small and medium enterprise shall be made in writing, must comply with provisions laid down herein and must include at least the followings:
+ Information about the legal person of the Fund and the receiving small and medium enterprise, place and time of entry into such agreement;
+ Contractual terms and conditions regarding financing form, amount, purposes of finances and financing currency unit, disbursement of finances and effect of the financing agreement;
+ Rights, obligations and liabilities of each party involved; method for dealing with disputes or difficulties arising from the process of implementation of the agreement and other arrangements in conformity with the Fund’s managerial requirements.
- Notwithstanding provisions laid down in clause 1 of this Article, involved parties may reach other agreement in compliance with provisions laid down herein and other relevant laws.
Acceptance testing on constituents of investment projects receiving finances according to Article 32 of Decree No. 39/2019/ND-CP as follows:
- Based on dossiers on acceptance testing of financing presented by the receiving small and medium enterprise, the Fund shall carry out the acceptance testing on financing.
- Dossiers on acceptance testing on financing shall comprise the followings:
+ Application form for acceptance testing on financing, submitted by the receiving enterprise;
+ Documents and payment evidences related to investment in development of premises, purchase of machinery and equipment of production and business plan or project.
- The Fund shall receive and assess the adequacy of dossiers on acceptance testing on financing; verify such dossiers and conduct the acceptance testing on its financing.
- The Fund shall be responsible for issuing verification, assessment and acceptance testing procedures to ensure compliance with the principles of fairness and public disclosure.
- On an annual basis, the receiving enterprise shall be responsible for sending the Fund a review report on performance of production and business plan or project already receiving finances or its financial statement.
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