On August 26, 2021, the Government issued Decree 80/2021/ND-CP guiding the Law on Support for Small and Medium-Sized Enterprises (SMEs), which came into effect on October 15, 2021, and replaced Government Decree No. 39/2018/ND-CP dated March 11, 2018.
1. Criteria for identifying small and medium-sized enterprises according to Decree 80/2021
According to Article 5 of Decree 80/2021/ND-CP, the criteria for identifying SMEs are as follows:
(1) Micro-enterprises in the agriculture, forestry, fisheries, and industrial and construction sectors that employ no more than 10 people participating in social insurance on average per year and have total annual revenue not exceeding 3 billion VND or total capital not exceeding 3 billion VND.
Micro-enterprises in the trade and service sectors that employ no more than 10 people participating in social insurance annually and have total annual revenue not exceeding 10 billion VND or total capital not exceeding 3 billion VND are considered eligible for social insurance benefits.
(2) Small enterprises in the fields of agriculture, forestry, fisheries and industry, construction employing an average of no more than 100 people participating in social insurance and having a total annual revenue of no more than 50 billion VND or a total annual capital of no more than 20 billion VND, but not being micro-enterprises as defined in clause (1).
Small businesses in the trade and service sector employing social insurance workers on average not exceeding 50 people per year and total annual revenue not exceeding 100 billion VND or total annual capital not exceeding 50 billion VND, but not micro-enterprises as defined in clause (1).
(3) Medium-sized enterprises in the fields of agriculture, forestry, fisheries and industry, construction employing an average of no more than 200 people participating in social insurance and with total annual revenue not exceeding 200 billion VND or total annual capital not exceeding 100 billion VND, but not small or micro-enterprises as defined in clauses (1), (2).
Medium-sized enterprises in the trade and service sector employing workers participating in social insurance with an average annual workforce of no more than 100 people and total annual revenue of no more than 300 billion VND or total capital of no more than 100 billion VND, but not micro-enterprises or small enterprises as defined in clauses (1), (2).
Note on how to determine
In the regulations defining small and medium-sized enterprises, there is one word and one word or, the correct interpretation is as follows:
A business must satisfy both conditions simultaneously for a single entity:
- Condition 1: Average number of workers participating in social insurance per year; and
- Condition 2: Total revenue for the year or Total capital.
2. Differences in criteria between Decree 80/2021/ND-CP and Decree 39/2018/ND-CP
| mục | Criteria | Decree 80 / 2021 / ND-CP | Decree 39 / 2018 / ND-CP |
| A | Identifying the business sector of small and medium-sized enterprises | The scope of operation of small and medium-sized enterprises is determined based on the main business sector that the enterprise has registered with the business registration authority. | 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. |
| B | Determine the average annual number of employees covered by social insurance in small and medium-sized enterprises. | 1. The number of employees participating in social insurance is the total number of 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 annual number of employees participating in social insurance is calculated by dividing the total number of employees participating in social insurance for all months of the preceding year by 12 months. The number of employees covered by social insurance for the month is determined at the end of the month and is based on the social insurance payment documents submitted by the enterprise to the social insurance agency for that month. | 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. | ||
| 3. In the case of a business operating for less than one year, the average annual 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. | |||
| C | Determine the total capital of small and medium-sized enterprises. | 1. The total capital for the year is determined in the balance sheet shown in the financial statements of the immediately preceding year that the enterprise submitted to the tax authorities. The total capital for the year is determined at the end of the year. | |
| 2. 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. | |||
| D | Determine the total revenue of small and medium-sized enterprises. | 1. Total revenue for the year is the sum of revenue from the sale of goods and provision of services by the enterprise, as determined from the financial statements of the immediately preceding year that the enterprise submitted to the tax authorities. | |
| 2. 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 this Decree. | |||
| E | Identifying and registering small and medium-sized enterprises | 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 are legally responsible for the accuracy of their declarations. | |
| 2. If a business discovers that its declared business size is inaccurate, it must proactively make adjustments and resubmit the declaration. This resubmission must be completed before the small and medium-sized enterprise is eligible for support. | |||
| 3. In cases where a business intentionally makes false declarations about its scale to receive support, the business will be held legally responsible and must return all the funds received as support. | |||
| 4. Based on the time the enterprise proposes support, the agency or organization supporting small and medium-sized enterprises will cross-check the enterprise's information on the National Enterprise Registration Portal to verify that the declared information meets the eligibility criteria for support. | Do not have | ||
3. Other distinguishing features
The content now includes support for technology in SMEs and newly established businesses, along with various digital transformation solutions for automation, improved business efficiency, management consulting, intellectual property rights, and more.
Changes in the level of support for consulting, human resource development, etc., with higher levels of support, greater value, more convenience, and wider reach, coming from a network of consultants, direct training, and online training.
More incentives are offered to businesses owned by women or with a large female workforce, such as "Tuition fee exemption for trainees from small and medium-sized enterprises (SMEs) in particularly difficult socio-economic areas, SMEs owned by women, SMEs employing a large number of female workers, and SMEs that are social enterprises when participating in business management training courses."
The regulations regarding age limits for male and female workers have been changed to only requiring a minimum of 06 consecutive months of employment in an SME before participating in the training course.
The regulations clearly and specifically state the content of interest rate support for SMEs regarding the interest rate differential. Specifically, the interest rate differential subsidized by the state budget for loans to innovative start-up SMEs and small and medium-sized enterprises participating in industry clusters and value chains through credit institutions is 2% per year.
4. The legal framework governing small and medium-sized enterprises.
Decree 80 / 2021 / ND-CP The regulations are issued with various support measures to help create leverage for SMEs to develop favorably and contribute to boosting the national economy.
For any unclear issues regarding the Decree, your company can contact EXPERTIS's Consulting Department for timely clarification.