Guide to License Fee Exemption for Small and Medium Enterprises under Decree 22/2020/ND-CP?

What criteria are used to identify small and medium enterprises?

Article 4 of the 2017 Law on Support for Small and Medium Enterprises provides the criteria for identifying small and medium enterprises as follows:

– Small and medium enterprises include micro-enterprises, small enterprises, and medium enterprises, having an average annual number of employees participating in social insurance of not more than 200 persons and satisfying one of the following two criteria:

+ Total capital of not more than 100 billion VND;

+ Total revenue of the immediately preceding year of not more than 300 billion VND.

– Micro-enterprises, small enterprises, and medium enterprises are identified by the fields of agriculture, forestry, and fishery; industry and construction; commerce and services.

– The Government prescribes this Article in detail.

Rules on license fee exemption for small and medium enterprises

Update note: From 01/01/2026, the collection and payment of license fees has ended under Clause 7, Article 10 of Resolution 198/2025/QH15; Decree 139/2016/ND-CP and Decree 22/2020/ND-CP were repealed by Decree 362/2025/ND-CP. Therefore, enterprises no longer have to pay license fees; the provisions cited below are of historical reference value only.

At Point c, Clause 1, Article 1 of Decree 22/2020/ND-CP amending and supplementing several articles of Decree 139/2016/ND-CP (both decrees were repealed by Decree 362/2025/ND-CP) on license fees, accordingly:

“c) Adding Clauses 8, 9, and 10 to Article 3 as follows:

9. Small and medium enterprises converting from business households (under Article 16 of the Law on Support for Small and Medium Enterprises) are exempt from license fees for 03 years from the date of first issuance of the Enterprise Registration Certificate.

a) During the license fee exemption period, if small and medium enterprises establish branches, representative offices, or business locations, the branches, representative offices, and business locations are exempt from license fees during the period the small and medium enterprises are exempt from license fees.

b) Branches, representative offices, and business locations of small and medium enterprises (eligible for license fee exemption under Article 16 of the Law on Support for Small and Medium Enterprises) established before the effective date of this Decree have their license fee exemption period counted from the effective date of this Decree until the end of the period the small and medium enterprises are exempt from license fees.

c) Small and medium enterprises converting from business households before the effective date of this Decree apply license fee exemption under Articles 16 and 35 of the Law on Support for Small and Medium Enterprises”.

How are small and medium enterprises converting from business households supported?

Pursuant to Article 16 of the 2017 Law on Support for Small and Medium Enterprises, specifically:

– Small and medium enterprises converting from business households are supported if satisfying the following conditions:

+ Before enterprise establishment, the business household had registered and operated under the law;

+ The business household had continuous production and business activities for at least 01 year up to the date of first issuance of the Enterprise Registration Certificate.

– Support contents include:

+ Free advice and guidance on enterprise establishment dossiers and procedures;

+ Exemption from enterprise registration fees and first-time enterprise information provision fees; exemption from appraisal fees, fees, and licensing fees for first-time business licensing for conditional business lines and trades; exemption from license fees for 03 years from the date of first issuance of the Enterprise Registration Certificate (previous policy — from 01/01/2026, the collection and payment of license fees has ended under Clause 7, Article 10 of Resolution 198/2025/QH15);

+Free advice and guidance on tax administrative procedures and the accounting regime for 03 years from the date of first issuance of the Enterprise Registration Certificate;

+ Time-limited corporate income tax exemption and reduction under the law on corporate income tax;

+ Time-limited land use fee exemption and reduction under the law on land.

– Small and medium enterprises converting from business households inherit all lawful rights, obligations, and interests of the business household as prescribed by law. Where a limited liability company or joint stock company is established on the basis of conversion from a business household, the business household owner must be responsible with all their assets for the business household’s unpaid debts, except where otherwise agreed under the law.

– The business household terminates operations from the time the small and medium enterprise converting from the business household is issued the Enterprise Registration Certificate.

– The Government prescribes Clause 2 of this Article in detail.

In addition, Article 35 of the 2017 Law on Support for Small and Medium Enterprises provides transitional provisions:

– From the effective date of this Law, support activities for small and medium enterprises before the effective date of this Law continue to be implemented under approved contents, programs, and plans; where small and medium enterprises satisfy the support conditions under this Law, they are implemented under this Law.

Thus, pursuant to the above provisions (previous provisions — no longer applied since the collection and payment of license fees ended from 01/01/2026), not every small and medium enterprise is exempt from license fees; only small and medium enterprises converting from business households that satisfy the conditions under the above provisions are exempt from license fees.

Where small and medium enterprises do not convert from business households, or small and medium enterprises converting from business households do not fully satisfy the conditions under Clause 1, Article 1 of Decree No. 22/2020/ND-CP (before the collection and payment of license fees ended from 01/01/2026), they are not exempt from license fees.