Draft law on supporting SMEs, a new driver for business growth

In recent years, the government has created programs and policies to help SMEs maximize their productivity. The draft law on supporting SMEs is hoped to create a breakthrough in helping the sector grow.

The Vietnamese government has exerted great efforts to develop and maintain an open, fair, and favorable business environment for enterprises by keeping a stable macro-economy, streamlining administrative procedures, cutting unnecessary costs, and improving access to supportive loans and opportunities to expand production and access markets.

The introduction of the draft law on SME support will create a legal framework and become an important tool for the development of such enterprises.

Dao Trong Ly, Chairman and CEO of Aprocimex Joint Stock Company, told VOV: “The draft has been carefully prepared and in details. Although there are some certain overlaps the draft law can get approval from the National Assembly once it’s put for discussions to get contributions and adjustments. If the bill is passed, our SMEs will be treated fairly without discrimination. We happily appreciate the law.”

The draft law has 5 chapters with specific support programs being stipulated in 10 articles of chapter 2. They are incentives in land, innovative technologies, access to credit, trade promotion, and information.

Under the bill, SMEs will be supported by the State to carry out some export activities, product research, prioritized in product consumption, guaranteed in borrowing loans, tax exemption and extension.

Pham Thi Thu Hang, Secretary General of Vietnam Chamber of Commerce and Industry, said most Vietnamese businesses are small and medium-sized enterprises which often find it hard to compete with foreign companies and are in need of more practical and appropriate support to grow.

“It’s necessary to mobilize various sources in society to support SMEs. The sources come not only from SMEs themselves, and state agencies, but also business associations, banks, and investment funds. The state assistance and these levers will create a positive effect for the development of SMEs,” explained Hằng.

The introduction of the draft law is hoped to help enterprises escape difficulties to continue growing. It will be the highest and consistent legal framework for the SME community and help to increase the number and quality of SMEs through incentive policies and support programs appropriate to the targets and directions set for the national economic development.

Do Tien Thinh, Director of the Center for Supporting Business Registration under the Ministry of Planning and Investment, said, "The bill is expected to develop a mechanism to encourage the development of SMEs and will add household businesses as beneficiaries of the draft law.

Currently there are nearly 2 million household businesses in Vietnam, which are important contributors to Vietnam’s economy. The draft law introduces incentives in land, innovative technologies, and access to credit.”

One of the highlights of the bill is that it defines the responsibility and role of the government, central agencies, provincial agencies, social organizations, and the private sector in helping SMEs and consolidating the implementation of policies for SMEs.

The draft Law on Supporting Small- and Medium-sized Enterprises will be submitted to the NA’s second session in October. The bill needs more feedback and recommendations from experts and businesses and should be reviewed with reference to international experience.