The criteria to be recognized as a medium-sized enterprise in Vietnam

Law on provision of assistance for small and medium-sized enterprises 2017, released on 12/06/2017 and taking effect on 01/01/2018 has initiated the legal basis with the intention of providing assistance and priority for enterprises satisfied with the regulated criteria. According to this provision, the Vietnamese Government has implemented some general assistance such as: the access to credit, tax and accounting regimes, production areas, … for sorts of enterprise and exclusive assistance such as: remission of land levy, free administrative procedure fee, … for startups.

If enterprise have desire to be recognized as a medium-sized enterprise in order to receive the regulated advantages, they need to take consideration to these issues described in Article 4:

• The total annual average number of employees participating in social insurance;
• The total capital;
• The total revenue of the previous year.

Notwithstanding, these above criteria shall be changed concerning business line, operating field that the company exercises (identified by Vietnamese industrial classification system), in detail:

• If enterprise has business line in these fields: agriculture, forestry, aquaculture; industry and construction:
• The total annual average number of employees participating in social insurance: not exceed 200 people;
• The total capital: not higher thanh 100 billion VND (recognized by Balance sheet on Financial Report);
• The total revenue of the previous year: not greater than 200 billion VND (recognized by Financial Report of the previous year).
• If enterprise has business line in trade and services, there would be slight change in requirement of the total annual average number of employees participating in social insurance: decreases at not higher than 100 people and the total revenue of the previous year: increase the ceiling figure, not higher than 300 billion VND.

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: 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: 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.
• 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.