The Small and Medium Enterprises Promotion Law: Not yet effective

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The "delay" of support

According to the General Statistics Office (GSO), in the first 5 months of 2018, there were 52,300 registered enterprises in the whole country with a total registered capital of VND 516.9 trillion, an increase of 3.5% in volume and an increase of 6.4% in registered capital over the same period of 2017. The average registered capital was VND 9.9 billion, an increase of 2.8%. At the same time, the number of temporarily suspended businesses is nearly 33,400 enterprises, an increase of 3.9% over the same period last year. The total number of enterprises completing dissolution procedures is more than 5,500 units, an increase of 18.1% over the same period last year, of which 5,061 enterprises have capital below VND 10 billion, accounting for 91.5% and increasing by 17%.

The figures show that small and medium enterprises are still "floating" on the "basket boat" on the sea. Meanwhile, with the goal of having 1 million effective businesses in 2020 by the Government, every year the country must have 150,000 newly established enterprises and they must really "live healthy", which is not easy for businesses. Therefore, the Small and Medium Enterprises Promotion Law is considered as a "gift" that the State and the Government bring to the business community in general, and small and medium enterprises in particular. The scope of support has been defined by the law, such as: Supporting newly-transformed enterprises from households; supporting the formation of start-up ecosystem, and so on. This is expected to help the Government's goal of success.

Commenting on the situation of supporting enterprises, Mr. To Hoai Nam, Vice Chairman cum Secretary General of the Association of small and medium enterprises said that the law and the policy framework under the law was relatively complete, which was a big step in supporting enterprises. However, the Law has only been issued for less than 6 months. Therefore, this requires a certain "delay" due to subjective and objective reasons. Therefore, the number of enterprises benefiting from supporting policies is not as expected.

According to Mr. Ha Quyet Thang, the Director of Kim Long Production and Trading Service Co, Ltd., (specializing in producing and manufacturing mechanical parts and molds), the regulations and policies are introduced, which creates more motivation and trust for businesses. However, when he was asked about the support from the Small and Medium Enterprises Promotion Law, he said that he only heard about support information but did not receive the support from any issued regulations. Therefore, enterprises still have to develop by themselves, find other sources of support according to the development needs of enterprises.

Do not wait

In fact, many ministries, sectors and localities have quickly implemented policies to support enterprises. However, in order to implement the policies and solutions prescribed in the Small and Medium Enterprises Promotion Law effectively, the Prime Minister recently issued Directive No. 15 / CT-TTg on organizing the effective implementation of this Law. Accordingly, the Prime Minister also requested leaders of ministries, ministerial agencies, People's Committees of provinces and cities to focus on implementing solutions such as: perfecting the legal framework, exempting tax for enterprises, effectively implementing the support schemes in accordance with the provisions and targets laid down in the Law.

This showed that the Government and management agencies were aware of the importance and urgency to support the business community, especially when small and medium enterprises account for 95% of total enterprises. It is important, however, that these guidelines have to go from central down to the local level, so in fact, enterprises still have to pay a lot of unofficial expenses.

In order to support this, Mr. To Hoai Nam said that, partly due to limited State resources, there is a lack of cooperation among ministries and sectors. Therefore, the agencies, ministries and sectors need to build a uniform legal system to help businesses work smoothly.

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In addition, many enterprises want the support to be deployed quickly, in line with the desire of enterprises such as capital, trade promotion, business cooperation. In the near future, the reform of administrative procedures must be stepped up, reducing unnecessary procedures, reducing "sub-licenses" and business conditions that obstruct businesses. Many experts also said that businesses must also take the initiative, find new business direction, to raise high competitiveness, and create momentum for development and effective operation.