Regulations on supporting innovative small and medium-sized enterprises under Vietnamese law

Which agency is responsible for guiding the establishment of shared working areas to support innovative small and medium-sized businesses? What support does a co-working area support for creative small and medium-sized startups?

1. Which agency is responsible for guiding the establishment of common working areas to support innovative small and medium-sized enterprises?

Common working areas to support innovative small and medium-sized enterprises are explained in Clause 8, Article 3 of the Law on Support for Small and Medium Enterprises 2017 as follows:

The common working area supports creative small and medium-sized businesses (hereinafter referred to as the common working area) is an area that provides centralized working space, product display space, and provides amenities to support and link creative small and medium-sized startups.

Reference to Article 24 of the 2017 Law on Support for Small and Medium Enterprises states as follows:

Responsibilities of ministries and ministerial-level agencies

1. Ministries and ministerial-level agencies, within the scope of their tasks and powers, have the following responsibilities:

a) Issue or submit to competent state agencies to promulgate policies to support small and medium-sized enterprises;

b) Organize, monitor, inspect and evaluate the implementation of support for small and medium-sized enterprises;

c) Organize statistics and publish information on small and medium-sized enterprises;

d) Guide small and medium-sized enterprises to participate in industry clusters and value chains;

d) Prioritize allocating resources to support small and medium-sized enterprises.

2. The Ministry of Industry and Trade is responsible for guiding small and medium-sized enterprises to participate in the product distribution chain.

3. The Ministry of Science and Technology is responsible for guiding the establishment of incubators, technical facilities, and common working areas; Support to improve technological capacity for small and medium-sized enterprises.

4. The Ministry of Natural Resources and Environment is responsible for guiding localities to arrange land funds to form and develop industrial clusters; concentrated agricultural, forestry, aquatic and seafood processing zones for small and medium-sized enterprises.

5. The State Bank of Vietnam is responsible for organizing the implementation of the Government’s policy on supporting credit institutions to increase outstanding loans to small and medium-sized enterprises.

According to this regulation, the authority to guide the establishment of general working areas to support innovative small and medium-sized enterprises belongs to the Ministry of Science and Technology.

2. What support do co-working areas support innovative small and medium-sized businesses receive?

In Article 12 of the Law on Support for Small and Medium Enterprises 2017, amended by Point a, Clause 4, Article 99 of the Law on Investment by Public-Private Partnership 2020, it is stipulated as follows:

Technology support; Support incubators, technical facilities, and common working areas

1. The State has policies to support small and medium-sized enterprises in researching and innovating technology, receiving, improving, perfecting and mastering technology through research, training, consulting, searching, decoding and transferring technology activities; Establish, exploit, manage, protect and develop the enterprise’s intellectual property.

2. Ministries, ministerial-level agencies, and provincial-level People’s Committees establish incubation facilities, technical facilities, and common working areas. Enterprises and other investment and business organizations are allowed to establish incubation facilities, technical facilities, and common working areas.

3. Incubators, technical facilities, and common working areas are entitled to the following support:

a) Exemption or reduction of land rent, land use fees, and non-agricultural land use tax according to the provisions of law;

b) Exemption or reduction of corporate income tax for a limited period of time according to the provisions of law on corporate income tax.

According to this regulation, co-working areas that support creative small and medium-sized startups enjoy the following support:

– Exemption or reduction of land rent, land use fees, and non-agricultural land use tax according to the provisions of law;

– Exemption or reduction of corporate income tax for a limited period according to the provisions of law on corporate income tax.

3. How is the level of support for equipment usage costs at technical facilities for small and medium-sized innovative startups in common working areas regulated?

The level of support for equipment usage costs at technical facilities for small and medium-sized innovative startups in common working areas is specified in Article 22 of Decree 80/2021/ND-CP as follows:

Content to support creative small and medium-sized businesses

1. Support for use of technical facilities, incubators, and common working areas

a) Support 100% of the cost of using equipment at technical facilities, incubators, and common working areas but not exceeding 20 million VND/year/enterprise;

b) Support up to 50% of space rental costs at incubators and co-working areas but not exceeding 5 million VND/month/business. The maximum support period is 03 years from the date the business signs the premises lease contract.

2. Support for intellectual property consulting, exploitation and development of intellectual property

a) Support 100% of the value of consulting contracts on procedures for establishing, transferring, exploiting and protecting intellectual property rights in the country but not exceeding 30 million VND/contract/year/enterprise;

b) Support 100% of the value of consulting contracts on developing invention descriptions, industrial design designs, and brand recognition system designs but not exceeding 30 million VND/contract/year/enterprise;

c) Support 100% of the value of management consulting contracts and development of products and services protected by intellectual property rights in the country but not exceeding 50 million VND/contract/year/enterprise;

d) Maximum support of 50% of the value of consulting contracts on establishing transfer, exploitation and protection of intellectual property rights abroad but not exceeding 50 million VND/contract/year/enterprise.

…

According to the above regulations, the level of support for the cost of using equipment at technical facilities for small and medium-sized creative startups in common working areas is 100% of the cost of using equipment but not exceeding 20 million VND/year/enterprise.