Principles for provision of assistance for small and medium-sized enterprises in Vietnam

Principles for provision of assistance for small and medium-sized enterprises in Vietnam (Internet image)

Regarding this matter, LawNet would like to answer as follows: 

1. Principles for provision of assistance for small and medium-sized enterprises (SMEs) in Vietnam

Principles for provision of assistance for SMEs are specified in Article 5 of the Law on assistance for small and medium-sized enterprises 2017 as follows:

- Provision of assistance for SMEs shall comply with market rules and international treaties to which the Socialist Republic of Vietnam is a signatory.

- Contents, subjects, procedures, resources, levels of assistance and results of assistance for SMEs shall be transparent.

- The State shall assist SMEs with certain focuses for a limited period of time and in accordance with objectives of the assistance and its ability to balance resources.

- The provision of assistance for SMEs using resources provided by non-state organizations and individuals shall comply with their own regulations and regulations of law.

- In the cases where an SME is concurrently entitled to more than one level of the same form of assistance in accordance with regulations of this Law and other relevant regulations of law, it will be entitled to most favorable level.

If more than one SME satisfy the conditions for the assistance in accordance with regulations of the Law on assistance for small and medium-sized enterprises 2017, the women-owned SME and the SME using more women employees will be given priority.

- An SME will receive the assistance if it satisfies fully regulations of the Law on assistance for small and medium-sized enterprises 2017 and other relevant regulations of Law.

2. Prohibited actions related to provision of assistance for SMEs in Vietnam

Prohibited actions related to provision of assistance for SMEs in Vietnam specified in Article 7 of the Law on assistance for small and medium-sized enterprises 2017 include:

- Failure to provide the assistance for SMEs in accordance with principles, subjects, competence, contents and procedures prescribed in regulations of law.

- Abuse of positions and power to violate regulations of law on the assistance for SMEs

- Discriminatory actions, unnecessary delay, obstructing or harassing SMEs and organizations and assistance for SMEs.

- Deliberate provision of incorrect information related to the provision of assistance for SMEs

- Failure to use the resources for intended purposes.

3. Sources of funding for assisting SMEs in Vietnam

- Sources of funding for assisting SMEs include:

+ Loans subsidized and guaranteed by the State;

+ Funding provided by the state budget;

+ Sources of funding from remission of taxes, fees, land rental, land levy and other financial obligations in accordance with regulations of law;

+ Legal sources of capital provided by domestic and foreign organizations and individuals.

- Sources of funding for assisting the following SMEs shall be estimated, verified, approved and stated in accordance with regulations of law.

+ Loans subsidized and guaranteed by the State;

+ Funding provided by the state budget;

+ Sources of funding from remission of taxes, fees, land rental, land levy and other financial obligations in accordance with regulations of law;

(Article 6 of the Law on assistance for small and medium-sized enterprises 2017)

4. Criteria for identification of SMEs in Vietnam

- An SME is either a micro-enterprise, small enterprise or medium-sized enterprise having the annual average number of employees who participate in social insurance is not greater than 200 and satisfying one of the following criteria:

+ The total capital is not greater than 100 billion dong;

+ The enterprise’s revenue of the previous year is not greater than 300 billion dong;

- Micro-, small and medium-sized enterprises are identified according to each industry such as agriculture, forestry, aquaculture; industry and construction and trade and services.

- The Government shall provide detailed guidance on this Article.

(Article 4 of the Law on assistance for small and medium-sized enterprises 2017)

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