Deputy Director of the Enterprise Development Department Bui Thu Thuy speaks at the event (Photo: VNA) HCM City (VNS/VNA) - A consistent legal framework related to taxdeductions, land allocations and credit programmes is needed to support small-and medium-sized enterprises (SMEs), experts have urged.
After the Law on Support of SMEs tookeffect in early 2018, a decree on the fund to promote SMEs and severalcirculars on human resources and counsellors to help SMEs were issued.
However, after nearly two years ofimplementation, the law has had little positive impact, according to Bui Thu Thuy,Deputy Director of the Enterprise Development Department under the Ministry ofPlanning and Investment.
She spoke at a meeting on SME supportorganised by the Ministry of Planning and Investment on November 26 in HCM City.
Under the law, more than 50 cities andprovinces across the country have organised activities to support SMEs andstart-ups, but many localities are confused about implementing the law as theyhave failed to identify the key product value chains in their areas, accordingto Thuy.
SMEs account for the majority of thecountry’s total number of businesses, but have not joined product value chains,according to Thuy.
Exports of many key commodities have hadvery strong growth, but 70 percent of exports are from foreign-investedenterprises (FDI), she said.
Nguyen Dinh Tue, Director of the Centre forSupport and Development of SMEs in HCM City, said: “A lot of content in the lawis not consistent, and even in conflict with other relevant laws such as theEnterprise Law and Tax Law.”
“This has made SMEs ineligible forsupport,” he added.
He recommended that the law clearlyidentify the difficulties facing SMEs and the “appropriate support” that isavailable.
Nguyen Duy Tan, Director of Tien Giang province’sEnterprise Promotion and Investment Promotion Centre, said that SMEs lacked notonly capital and land for production, but also information about policies,technologies and markets.
They also lack sufficient human resourcesand necessary skills, he added.
The Law on Support for SMEs, with fourchapters and 35 articles, focuses on principles, content and resources tosupport SMEs, and defines the responsibilities of agencies, organisations andindividuals related to support for SMEs.
Under the law, SMEs are defined asmicro-enterprises and small- and medium-sized enterprises with fewer than 200employees (who receive social insurance) per year.
The enterprises must meet one of thefollowing two criteria: total investment capital does not exceed 100 billionVND (4.3 million USD) and total revenue from the previous year is not more than300 billion VND; or they are officially classified in certain fields such asagriculture, forestry, fisheries, industry and construction, or trade and services.
The law requires that support for SMEs mustrespect market rules and fall in line with international treaties of whichVietnam is a member.
The support given to SMEs must be donetransparently in terms of beneficiaries, procedures and processes, as well asresources, support level and support results, according to the law.
SMEs, which account for 95 percent ofVietnam’s business community, play a major role in the country’s economy andaccount for 98 percent of all enterprises with about 40 percent of GDP.
In the first quarter of the year, as manyas 15,000 enterprises closed (an increase of 20.8 percent compared to the sameperiod last year), and more than 15,300 enterprises completed filings for dissolution, according to the GeneralStatistics Office.
The Government aims to have at least onemillion “healthy” enterprises by the end of 2020, which means that each year,at least a total of 150,000 new enterprises must be set up.
While the government has made a number ofreforms, SMEs continue to face challenges related to credit, human resources,market access, and competition with foreign firms./.
After the Law on Support of SMEs tookeffect in early 2018, a decree on the fund to promote SMEs and severalcirculars on human resources and counsellors to help SMEs were issued.
However, after nearly two years ofimplementation, the law has had little positive impact, according to Bui Thu Thuy,Deputy Director of the Enterprise Development Department under the Ministry ofPlanning and Investment.
She spoke at a meeting on SME supportorganised by the Ministry of Planning and Investment on November 26 in HCM City.
Under the law, more than 50 cities andprovinces across the country have organised activities to support SMEs andstart-ups, but many localities are confused about implementing the law as theyhave failed to identify the key product value chains in their areas, accordingto Thuy.
SMEs account for the majority of thecountry’s total number of businesses, but have not joined product value chains,according to Thuy.
Exports of many key commodities have hadvery strong growth, but 70 percent of exports are from foreign-investedenterprises (FDI), she said.
Nguyen Dinh Tue, Director of the Centre forSupport and Development of SMEs in HCM City, said: “A lot of content in the lawis not consistent, and even in conflict with other relevant laws such as theEnterprise Law and Tax Law.”
“This has made SMEs ineligible forsupport,” he added.
He recommended that the law clearlyidentify the difficulties facing SMEs and the “appropriate support” that isavailable.
Nguyen Duy Tan, Director of Tien Giang province’sEnterprise Promotion and Investment Promotion Centre, said that SMEs lacked notonly capital and land for production, but also information about policies,technologies and markets.
They also lack sufficient human resourcesand necessary skills, he added.
The Law on Support for SMEs, with fourchapters and 35 articles, focuses on principles, content and resources tosupport SMEs, and defines the responsibilities of agencies, organisations andindividuals related to support for SMEs.
Under the law, SMEs are defined asmicro-enterprises and small- and medium-sized enterprises with fewer than 200employees (who receive social insurance) per year.
The enterprises must meet one of thefollowing two criteria: total investment capital does not exceed 100 billionVND (4.3 million USD) and total revenue from the previous year is not more than300 billion VND; or they are officially classified in certain fields such asagriculture, forestry, fisheries, industry and construction, or trade and services.
The law requires that support for SMEs mustrespect market rules and fall in line with international treaties of whichVietnam is a member.
The support given to SMEs must be donetransparently in terms of beneficiaries, procedures and processes, as well asresources, support level and support results, according to the law.
SMEs, which account for 95 percent ofVietnam’s business community, play a major role in the country’s economy andaccount for 98 percent of all enterprises with about 40 percent of GDP.
In the first quarter of the year, as manyas 15,000 enterprises closed (an increase of 20.8 percent compared to the sameperiod last year), and more than 15,300 enterprises completed filings for dissolution, according to the GeneralStatistics Office.
The Government aims to have at least onemillion “healthy” enterprises by the end of 2020, which means that each year,at least a total of 150,000 new enterprises must be set up.
While the government has made a number ofreforms, SMEs continue to face challenges related to credit, human resources,market access, and competition with foreign firms./.
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