This is a notable content of the Law on provision of assistance for small and medium-sized enterprises 2017 approved by the National Assembly of Vietnam on June 12, 2017, which officially takes effect from January 01, 2018.
According to Article 18 of the Law on provision of assistance for small and medium-sized enterprises 2017 of Vietnam, investors in startups shall include venture capital funds and domestic and foreign organizations and individuals doing business via contribution of capital to establishment of startups, purchase of shares or stakes of startups. A venture capital fund which is created from investments of private investors aims to invest in startups according to the following principles:
- The amount of investment in a startup shall not exceed 50% of charter capital of the post-investment startup;
- The private investor who contributes to the fund shall be financially capable and take the responsibility for his/her stakes.
Concurrently, the investors in startups will be entitled to remission of corporate income tax on revenues from their investment in startups for a limited period of time in accordance with regulations of law on corporate income tax.
Besides, according to the local budget, the People’s Committee of the province shall send the People’s Council of the province a request for the decision on assigning state-owned finance organizations of the province to invest in startups according to the following principles:
- The eligible venture capital funds shall be selected to invest in startups;
- Investments from the local budget shall not exceed 30% of total capital raised from eligible venture capital funds selected by the startups;
- The investments shall be transferred to private investors within 05 years from the day on which the stakes are contributed. The transfer of investments shall comply with regulations of law on management and use of the state capital invested in business operation activities at premises of enterprises.
View more details at the Law on provision of assistance for small and medium-sized enterprises 2017 of Vietnam, effective from January 01, 2018.
Ty Na
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