Sources of funding for assisting small and medium-sized enterprises in Vietnam

Sources of funding for assisting small and medium-sized enterprises in Vietnam (Internet image)

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

1. Sources of funding for assisting small and medium-sized enterprises (SMEs) in Vietnam

According to Clause 1, Article 6 of the Law on Support for Small and Medium Enterprises 2017, 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.

2. Principles for provision of assistance for SMEs in Vietnam

Principles for provision of assistance for SMEs in Vietnam according to Article 5 of the Law on Support for Small and Medium Enterprises 2017 are 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 Support for Small and Medium 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 Support for Small and Medium Enterprises 2017 and other relevant regulations of Law.

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

Prohibited actions related to provision of assistance for SMEs according to Article 7 of the Law on Support for Small and Medium 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.

4. Assistance for startups in Vietnam

Assistance for startups according to Article 17 of the Law on Support for Small and Medium Enterprises 2017 are as follows:

- A startup may receive the assistance if the following conditions are fulfilled:

+ The startup has been put into operation for up to 05 years from the day on which its first ERC is issued.

+ The startup has not initiated public offering of its securities (in cases of a joint-stock company)

- Such an SME above is entitled to the following forms of assistance

+ Assistance in the application and transfer of technologies, use of equipment at the technical establishments, incubators and co-working spaces, provision of instruction on testing and completing new products, services and business models;

+ Assistance in advanced training in development of products, investment attraction, providing advice on intellectual property, carrying out the procedures related to technical regulations and standards, measurement and quality;

+ Assistance in communication, publicity, promotion, connection of startups and attraction of investment from venture capital funds;

+ Assistance in commercialization of the results of scientific research and technological development, exploitation and development of intellectual property;

+ The Government shall introduce policies on interest rate subsidy on loans taken by startups. The subsidy on interest rate is provided by credit institutions.

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