The government has issued Decree No. 39_2018_ND_CP Government regulations detailing certain provisions of the Law on Support for Small and Medium-Sized Enterprises.
This Decree, effective from March 11, 2018, provides guidance on the Law on Supporting Small and Medium-Sized Enterprises, detailing the incentives and support available to small and medium-sized enterprises.
In particular, thanks to this decree, the definition of small, micro, and medium-sized enterprises has become clearer and less ambiguous than before the decree was issued.
What are micro-enterprises, small enterprises, and medium-sized enterprises?
The following are guidelines for accurately identifying the types of businesses eligible for incentives and support.
How to identify a micro-enterprise
Micro-enterprises in the agriculture, forestry, fisheries, and industrial and construction sectors are those with an average annual number of employees participating in social insurance not exceeding 10 people. , and Total revenue for the year must not exceed 3 billion VND. or The total capital should not exceed 3 billion VND.
Micro-enterprises in the trade and service sectors are those with an average annual number of employees participating in social insurance not exceeding 10 people. , and Total revenue for the year must not exceed 10 billion VND. or The total capital should not exceed 3 billion VND.
Note the interpretation of the words "and" and "or" in the above regulation.
How to define a small business
Small businesses in the agriculture, forestry, fisheries, and industrial and construction sectors have an average annual number of employees participating in social insurance not exceeding 100 people. , and Total revenue for the year must not exceed 50 billion VND. or Total capital must not exceed 20 billion VND, but it must not be a micro-enterprise as defined in Clause 1 of this Article.
Small businesses in the trade and service sectors have an average annual number of employees participating in social insurance not exceeding 50 people. , and Total revenue for the year must not exceed 100 billion VND. or Total capital must not exceed 50 billion VND, but it must not be a micro-enterprise as defined in Clause 1 of this Article.
How to identify a medium-sized enterprise
Medium-sized enterprises in the fields of agriculture, forestry, fisheries, and industry and construction are those with an average annual number of employees participating in social insurance not exceeding 200 people and total annual revenue not exceeding VND 200 billion or total capital not exceeding VND 100 billion, but are not small or micro-enterprises as defined in Clauses 1 and 2 of this Article.
Medium-sized enterprises in the trade and service sectors are those with an average annual number of employees participating in social insurance not exceeding 100 people and total annual revenue not exceeding VND 300 billion or total capital not exceeding VND 100 billion, but are not micro-enterprises or small enterprises as defined in Clauses 1 and 2 of this Article.
The business scope of small and medium-sized enterprises is determined based on the provisions of the law on the economic sector classification system and the provisions of specialized laws.
In cases where a business operates in multiple sectors, small and medium-sized enterprises (SMEs) are defined based on the sector with the highest revenue. If the sector with the highest revenue cannot be determined, SMEs are defined based on the sector employing the most workers.
1. The number of employees participating in social insurance includes all employees managed, employed, and paid wages by the enterprise who participate in social insurance in accordance with the law on social insurance.
2. The average number of employees participating in social insurance per year is calculated by dividing the total number of employees participating in social insurance for the year by the number of months in the year, and is determined based on the social insurance payment documents submitted by the enterprise to the social insurance agency for the immediately preceding year.
In the case of businesses operating for less than one year, the average number of employees participating in social insurance is calculated by dividing the total number of employees participating in social insurance during the operating months by the number of operating months.
Total capital is determined in the balance sheet shown in the financial statements of the immediately preceding year that the enterprise submitted to the tax authorities.
In the case of businesses operating for less than one year, the total capital is determined in the business's balance sheet at the end of the quarter immediately preceding the time the business applies for the support.
Total revenue for the year is the sum of the revenue from the sale of goods and services by the business, and is determined based on the financial statements of the immediately preceding year that the business submitted to the tax authorities.
In cases where a business has been operating for less than one year, or for more than one year but has not yet generated revenue, the business shall determine its classification as a small and medium-sized enterprise based on the total capital criteria stipulated in Article 9 of this Decree.
1. Small and medium-sized enterprises (SMEs) shall use the form prescribed in the Appendix attached to this Decree to self-determine and declare their size as a micro-enterprise, small enterprise, or medium-sized enterprise and submit it to the agency or organization supporting SMEs. SMEs shall be legally responsible for the accuracy of their declarations.
2. If a business discovers that its declared business size is inaccurate, the small and medium-sized enterprise (SME) must make adjustments and resubmit the declaration. This resubmission must be completed before the SME is eligible for the support.
3. In cases where a business intentionally makes false declarations about its scale to receive support, it shall be held legally responsible and shall reimburse all funds and related costs that it has received as support.
Small and medium-sized enterprises (SMEs) can access a network of consultants on the National SME Support Portal and the websites of ministries and ministerial-level agencies to select consultants or consulting organizations and consulting services that suit their business needs.
Small and medium-sized enterprises (SMEs) submit applications for consulting support to agencies and organizations supporting SMEs. The submitted application is a prerequisite for the SME support agency to consider providing consulting services to the SME.
Support for business startup and business management training. The state budget will support at least 50% of the total cost of a training course on business startup and business management for small and medium-sized enterprises;
Trainees from small and medium-sized enterprises (SMEs) located in areas with particularly difficult socio-economic conditions, and SMEs owned by women, are exempt from tuition fees for participating in the training course.
Vocational training support: Small and medium-sized enterprises (SMEs) that send employees to participate in basic-level training courses or training programs lasting less than 03 months are exempt from training costs. The remaining costs will be agreed upon between the SME and the employee.
On-site training support for small and medium-sized enterprises (SMEs): SMEs operating in the manufacturing and processing sectors will receive support covering 50% of the total cost of an on-site training course, but not more than once a year.
On-site training courses at companies must have a minimum of 10 participants.
