What is a Social Enterprise?

According to Clause 1, Article 10 of the Law on Enterprises 2020 (Effective from January 01, 2021), a social enterprise must meet the following criteria:

- Be an enterprise registered for establishment in accordance with this Law;

- The operational objective is aimed at solving social and environmental issues for the benefit of the community;

- Use at least 51% of the total annual post-tax profits of the enterprise for reinvestment to achieve the registered objectives.

Thus, from January 01, 2021, a social enterprise is an enterprise that meets all 03 conditions mentioned above.

According to the current regulations, Article 10 of the Law on Enterprises 2014 stipulates that a social enterprise must meet the following criteria:

- Be an enterprise registered for establishment in accordance with this Law;

- The operational objective is aimed at solving social and environmental issues for the benefit of the community;

- Use at least 51% of the total annual profits of the enterprise for reinvestment to achieve the registered social and environmental objectives.

Thus, compared to the current regulations, the new regulation clearly defines that the use of at least 51% of the total reinvested profits of a social enterprise is to be from the total annual post-tax profits of the enterprise.

Sincerely!