Hanoi-Vietnam: What are the definitions of small and medium-sized enterprises and identification thereof?

13:27, 11/07/2024

The phrase "small and medium-sized enterprises" is quite common among accountants in Vietnam. However, not everyone fully understands the definitions of small and medium-sized enterprises or the criteria for their identification. The following article will help readers address the aforementioned matter.

Small and medium-sized enterprises in Vietnam (SMEs) are enterprises characterized by their small scale in terms of capital, labor, or revenue. SMEs can be divided into three categories based on their scale: micro-enterprises, small enterprises, and medium enterprises. To identify an SME and apply regulations correctly, it is necessary to master different criteria in different cases according to legal provisions.

Criteria for identifying SMEs to apply accounting policies for SMEs (Decision 48/2006/QD-BTC - effective until December 31, 2016, and Circular 133/2016/TT-BTC - effective from January 1, 2017) or large enterprises (Circular 200/2014/TT-BTC) will be based on the criteria of total capital or number of employees according to Decree 56/2009/ND-CP.

According to the provisions of Decree 56/2009, SMEs are understood to be business entities that have registered for business according to legal regulations, divided into three levels: micro, small, and medium according to the scale of total capital (total capital is equivalent to total assets determined in the balance sheet of the enterprise) or annual average number of employees (total capital is a prioritized criterion). To be specific:

Scale Area	Micro-enterprise	Small enterprise		Medium enterprise
Scale Area	Number of employees	Total capital	Number of employees	Total capital	Number of employees
I. Agriculture, forestry and fisheries	10 people or less	20 billion VND or less	From over 10 people to 200 people	From over 20 billion VND to 100 billion VND	From over 200 people to 300 people
II. Industry and Construction	10 people or less	20 billion VND or less	From over 10 people to 200 people	From over 20 billion VND to 100 billion VND	From over 200 people to 300 people
III. Trade and Services	10 people or less	10 billion VND or less	From more than 10 people to 50 people	From over 10 billion VND to 50 billion VND	From over 50 people to 100 people

Depending on the nature and objectives of each policy or support program, the leading agency can specify the above criteria to suit.

Under the criteria to identify SMEs for the extension of the deadlines for CIT and VAT payment according to regulations in Circular 16/2013/TT-BTC guiding the extension and reduction of State budget revenue according to Resolution 02/NQ-CP on solutions to remove difficulties for production and business, support the market, and handle bad debts, SMEs, including branches, affiliates independently account, cooperatives, are enterprises using:

- Less than 200 full-time employees per year;

- Annual revenue not exceeding 20 billion VND.

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