Criteria for Identifying High-Tech Enterprises

Previously, according to Article 18 of the High Technology Law of 2008, regardless of the size of the enterprise, to qualify for incentives as a high-tech enterprise, companies had to allocate 1% of their total revenue and 5% of their total workforce to research and development activities. Therefore, when the Investment Law of 2014 was amended, the Ministry of Planning and Investment also amended Article 18 of the High Technology Law of 2008 within the Investment Law of 2014. The issuance of Decision No. 19/2015/QD-TTg by the Government of Vietnam regarding the Criteria for Identifying High-Tech Enterprises reduced the ratios related to revenue and workforce allocated to research and development by half compared to the previous regulations in Article 18 of the High Technology Law of 2008. This created significant convenience for enterprises, removing barriers and encouraging investment in high technology.

Based on Article 18 of the High Technology Law of 2008; Article 75 of the Investment Law of 2014; and Article 1 of Decision No. 19/2015/QD-TTg:

“High-tech enterprises are those that meet the criteria specified in Points a and b of Article 75 of the Investment Law and simultaneously meet the following specific criteria:

The revenue from high-tech products of the enterprise must reach at least 70% of the total annual net revenue.

The total expenditure on research and development activities conducted in Vietnam over the total annual net revenue for small and medium enterprises must be at least 1%. For enterprises with total capital over 100 billion VND and a total workforce of over 300 employees, this ratio must be at least 0.5%.

The number of employees with a professional qualification of university level or higher directly engaged in research and development, over the total number of employees of the enterprise, for small and medium enterprises must reach at least 5%. For enterprises with total capital over 100 billion VND and a total workforce of more than 300 employees, this ratio must be at least 2.5% but not less than 15 individuals.”

Accordingly, based on this regulation, the criteria to determine a high-tech enterprise will include the following criteria:

Firstly, the enterprise produces high-tech products listed in the Category of High-Tech Products Encouraged for Development;

Secondly, the enterprise must apply environmentally friendly measures, energy-saving production processes, and quality management meeting Vietnamese standards and technical regulations; in cases where Vietnamese standards and technical regulations are not available, international specialized organization standards will be applied;

Thirdly, the revenue from high-tech products of the enterprise must reach at least 70% of the total annual net revenue;

Fourthly, the total expenditure on research and development activities conducted in Vietnam over the total annual net revenue for small and medium enterprises must be at least 1%. For enterprises with total capital over 100 billion VND and a total workforce of over 300 employees, this ratio must be at least 0.5%.

Fifthly, small and medium enterprises must have at least 5% of their workforce with a professional qualification of university level or higher directly engaged in research and development over the total number of employees. For enterprises with total capital over 100 billion VND and a total workforce of over 300 employees, this ratio must be at least 2.5% but not less than 15 individuals.

Decision No. 19/2015/QD-TTg also stipulates that enterprises that have submitted applications for a certificate of high-tech enterprise status before this Decision takes effect from August 1, 2015, but have not yet been granted the certificate, shall comply with the criteria set out in this Decision. Ministers, heads of ministerial-level agencies, heads of government agencies, and chairpersons of the provincial and municipal People's Committees under central authority are responsible for implementing this Decision.

Source: vi.sblaw.vn

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