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The criteria to identify a micro-enterprise in Vietnam

According to Law on provision of assistance for small and medium-sized enterprises 2017, taking effect on 01/01/2018 and Decree No.39/2018 on detail regulations of to Law on provision of assistance for small and medium-sized enterprises 2017, taking effect on 11/03/2018, 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. Besides, as for each enterprise exercising in each certain business field shall exist exclusive requirements. In detail:

  1. In agriculture, forestry, aquaculture; industry and construction

Pursuant to regulations, micro-enterprise conducting these above business field has to satisfy:

  • The total annual average number of employees participating in social insurance: not exceed 10 people;
  • The total capital: not higher than 03 billion VND;
  • The total revenue of the previous year: not greater than 03 billion VND.
  1. In trade and services:

The core feature of trade and services that does not have high demand in employees, but is capable of making more profit than other fields. Consequently, there is slight difference in identifying micro-enterprise in these two fields:

  • The total annual average number of employees participating in social insurance: not exceed 10 people;
  • The total capital: not higher than 03 billion VND;
  • The total revenue of the previous year: not greater than 10 billion VND.

However, Vietnam has been developing a project that could assist the micro, small and medium enterprises having potential development in one or more fields, regions in one or more stages. Classifying accurately of the size of enterprise plays essential role, because for each sort of enterprise, Vietnamese Government shall offer different assistance and priority relating to tax, administrative procedure,… with the aim of helping promote the enterprise.

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).
  • The operating field: is identified by Vietnameseindustrial classification system. In case that enterprise has various business lines, the line which has highest revenue shall be chosen.

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