With a total registered capital of over VND200 trillion, Vinh Phuc province has more than 15,000 enterprises, of which about 70% are small and medium-sized enterprises (SMEs). The province’s SMEs have steadily grown, created employment opportunities for local people, secured people’s living standards and social welfare, and contributed significantly to local socioeconomic development.
CNC Tech Group in Thang Long Vinh Phuc Industrial Park
The Department of Planning and Investment - the lead agency for business support - reported that in 2022, Vinh Phuc province ranked 8th out of 63 provinces and cities nationwide in the Provincial Competitiveness Index (PCI), driven by two rapidly rising indicators: Business Support Index (4th) and Legal Institution Index (5th). This indicated that the government has effectively supported businesses. However, SMEs have encountered many challenges due to their small scale, low management level, limited technological and innovation level, weak competitiveness and lack of cooperation and participation in supporting production chains that supply products for FDI firms (such as Honda, Toyota and Piaggio).
SMEs are crucial for the economy of Vinh Phuc, as they constitute 97% of all enterprises in the province, which aims to become one of the industrial centers. To further assist local SMEs in improving their competitiveness and operating quality and increasing their participation in value chains, the Vinh Phuc Provincial People’s Committee issued Decision No. 2204/QD-UBND on November 21, 2022, approving the Vinh Phuc SME Support Program for the 2022-2025 period. The program aims to ensure that all new enterprises are informed and aware of digital transformation by 2025 and that more than 50% of SMEs use digital platforms.
Vinh Phuc has various policies to assist business households in becoming SMEs, such as tax, fee, consulting, paperwork, business registration and business information disclosure. SMEs that have transitioned from business households and continue to operate in conditional industries without changing their scale must submit a request to the relevant authorities for certificates on conditional business and investment. The authorities are obliged to issue the necessary business documents within three working days of receiving the requests from the enterprises.
The province assists SMEs in innovative startups to promote authentic business. For instance, it offers a 50% discount on space rental fees at incubators and co-working spaces, with a maximum of VND5 million per month, for up to three years from the date of leasing. The province covers 100% of the cost of consulting contracts on procedures for business formation and intellectual property rights, with a limit of VND30 million per year per contract per enterprise. Vinh Phuc supports information, communication and trade promotion such as free access to information on domestic and international standards and regulations; subsidizes 50% of the cost of consulting contracts for membership registration on international e-commerce platforms for selling their products and services, with a cap of VND100 million per contract per year per business.
The province pays 50% of the expense of maintaining accounts on domestic and international e-commerce platforms, with a ceiling of VND50 million per year. The province subsidizes venue rental fees, booth design and installation fees, exhibit transportation fees, food and accommodation fees for companies participating in trade promotion events, but the subsidy value cannot exceed VND30 million per year for each company for domestic events and VND50 million for foreign events. Vinh Phuc also provides 2% interest subsidies for startup SMEs through credit institutions.
By Hien Nam, Vietnam Business Forum
Vietnamese
October 2024
Hanoi