How many years does a household business need to operate before it can be received assistance when converting to an SME in Vietnam?

How many years does a household business need to operate before it can be received assistance when converting to an SME in Vietnam?

Article 16 of the Law on Provision of Assistance for Small and Medium-sized Enterprises 2017 stipulates assistance for SMEs in conversion from household business to SMEs as follows:

1. An SME converted from a household business will receive assistance if the following conditions are fulfilled:

a) Before being converted to a SME, the household business has obtained the enterprise registration certificate (ERC) and is run in accordance with regulations of law.

b) The household business has been operating continuously for at least 01 year by the day on which the first ERC is issued.

2. Such an SME mentioned in Clause 1 of this Article is entitled to the following forms of assistance

a) Free consultancy and instruction on applications and procedures for the enterprise establishment;

b) Exemption from fees for enterprise registration and the first provision of enterprise information; exemption from fees for assessment and fees and licensing fees for the first license of business lines subject to conditions and exemption from licensing fees within 3 years from the day on which the first ERC is issued;

c) Free consultancy and instruction on the tax administrative procedures and the accounting regime within 03 years from the day on which the first ERC is issued;

d) Remission of corporate income tax for a limited period of time in accordance with regulations of law on corporate income tax.

dd) Remission of land rental, land levy and the levy on non-farming land for a limited period of time in accordance with regulations of law on land.

3. The SME converted from a household business shall inherit all rights, obligations and legal interests of the household business in accordance with regulations of law. If a household business is converted into a limited liability company or a joint stock company, the household business owner, with his/her entire property shall be liable for the outstanding loans of the household business unless otherwise agreed by the parties in accordance with regulations of law.

4. The household business shall be shut down as soon as the SME converted from this household business is issued with ERC.

5. The Government shall provide detailed guidance on Clause 2 of this Article.

Thus, household businesses converting to SMEs that have operated continuously for at least 1 year from the date of issuance of the first business registration certificate will be supported. Your business household is not eligible to receive support because from March 2022 to September 2022 there are only 6 months. If you want support, you can proceed with the conversion procedure in March 2023 in Vietnam.

How many years does a household business need to operate before it can be received assistance when converting to an SME in Vietnam? (Image from the Internet)

Which agency will provide counseling for household businesses converting to SMEs in Vietnam?

According to Article 15 of Decree 80/2021/ND-CP, assistance in counseling, preparation of documentation and completion of procedures for enterprise establishment as follows:

1. The People’s Committees of provinces shall assign their Departments of Planning and Investment to provide counseling and instructions for household businesses to convert into enterprises free of charge regarding the following issues:

a) Documentation and procedures for enterprise registration;

b) Documentation and procedures for registration of the certificate of eligibility for conditional business lines (if any).

2. A household business that wishes to receive the instructions mentioned in Clause 1 of this Article shall submit a physical or electronic application to the Department of Planning and Investment, including: valid copy of the Business Registration Certificate of the household business; valid copy of the TIN registration certificate; valid copies of documents proving payment of licensing fees, taxes and other amounts payable to state budget (if any), tax declaration forms within 01 years before conversion.

Within 03 working days from the receipt of the application, the Department of Planning and Investment shall provide counseling and instructions on the issues specified in Clause 1 of this Article free of charge.

Therefore, household businesses converting to SMEs will receive free counseling from the Department of Planning and Investment on the order, procedures, and business registration documents in Vietnam.

Best regards!