Identification benchmark for small enterprise in Vietnam

Following Law on provision of assistance for small and medium-sized enterprises 2017 and Decree No.39/2018 on detail regulations of to Law on provision of assistance for small and medium-sized enterprises 2017, small and medium-sized enterprises are separated into 3 sorts:

• Micro-sized enterprise
• Small enterprise
• Medium-sized enterprise

Because the large majority of operating enterprises is classified in small and medium-sized enterprises, each above kind of business organizations shall be offer exclusive assistance and priority concerning the assistance in tax and accounting regimes, production areas, technologies,… with the intention of providing conditions to improve enterprise system in nation.

The criteria used for identifying micro-enterprise base on the total number of employees participating in social insurance; the total capital or the total revenue of the previous year of the enterprise and operating field. In this document, we would like to mention the criteria used for identifying small enterprise, which is illustrated in the below table:

Notice:

*The annual average total number of employees: is calculated by the total number of employees participating in social insurance divides to 12 months (if enterprise is established under 01 year, that number would be divided to operating months).

** The total capital: is recognized by Balance sheet on Financial Report of the previous year submitted to Tax department (if enterprise is established under 01 year, the capital shall be found in Balance sheet at the previous quarter close to the time that enterprise registers for assistance).

*** The total revenue: is recognized by Financial Report of the previous year submitted to Tax department (if enterprise is established under 01 year or more than 01 year without initiating revenue, the revenue shall supplant by the total revenue in Balance sheet at the previous quarter close to the time that enterprise registers for assistance).

One considerable notice when company conducts procedure of small enterprise identification is the operating field (identified by Vietnamese industrial classification system). In case that enterprise has various business lines, the line which has the highest revenue shall be chosen.  If it is unable to recognize the highest revenue, we could decide to use the line in which has used the most employees.