Vietnam's VCCI Urges Major Overhaul of SME Support Law with 11 Key Reforms

The Vietnam Chamber of Commerce and Industry (VCCI) has presented lawmakers with a comprehensive set of 11 recommendations to amend the draft law on supporting small and medium enterprises (SMEs). During a working session with the National Assembly’s Committee for Economic and Financial Affairs, VCCI Deputy Secretary-General Dau Anh Tuan outlined the proposals, which aim to provide more practical and quantifiable support for the sector.

Expanding Eligibility and Tax Relief

The VCCI argued that the current SME definition, with a universal threshold of fewer than 300 employees and revenue below VND400 billion ($15 million), is overly restrictive. For material-intensive sectors like electronics, where material costs can represent 85-90% of production costs, businesses risk losing support prematurely. The chamber proposed raising the revenue ceiling to VND1 trillion ($38 million) for specific industries and introducing a three-year transition period for firms that exceed the threshold.

The proposal also calls for extending Corporate Income Tax (CIT) incentives to medium-sized enterprises in manufacturing and supporting industries, along with additional incentives for expansion investments and technological innovation.

Improving Access to Capital and Land

To ease financing constraints, the VCCI recommended that the government establish a formal valuation framework for intangible assets, including intellectual property rights and purchase orders. The chamber also urged for shorter appraisal times and a minimum interest rate subsidy of 2% per annum, ensuring parity with green projects under Article 21 of the draft law.

Regarding land access, the proposal seeks to allow businesses to deduct land rent directly, rather than seeking reimbursement through infrastructure developers. It also suggests a 30% rent reduction for seven years for both direct lessees and existing supporting industries, a move designed to synchronize with the 2024 Land Law and National Assembly Resolution 198/2025/QH15.

Fostering Innovation and Green Transition

In line with Politburo Resolution 57-NQ/TW, the VCCI proposed expanding the scope of deductible research and development (R&D) expenses and simplifying procedures for accessing the Science and Technology Development Fund.

To accelerate technology adoption, the chamber wants support quantified at a minimum of 50% of costs (with a cap), with specific mention of technologies like ERP, MES, AI, and IoT. The proposal also includes allowing for the accelerated depreciation of software assets.

For the green transition, VCCI recommended increasing the interest rate subsidy to 3% per annum and expanding eligibility to standard manufacturing blocks with green projects. Further proposals include funding at least 50% of costs for green certifications and greenhouse gas inventories, providing support for Carbon Border Adjustment Mechanism (CBAM) compliance, and allowing 150% of ESG consulting costs to be treated as deductible expenses.

Streamlining Administration and Market Access

The VCCI advocated for simplified accounting rules for small enterprises and the implementation of a "one-time declaration" data linkage system. Citing Politburo Resolution 68-NQ/TW on private sector development, it also proposed that support should only be withdrawn following a legally effective judgment, upholding the "presumption of innocence" principle.

Furthermore, the chamber suggested legalizing a "guidance before penalties" approach as a core principle for SME oversight. To boost market access, it called for strict monitoring mechanisms to ensure a minimum of 20% of public procurement funding is allocated to SMEs, with priority for domestic products.

Additional recommendations include new regulations for fire safety compliance support, funding for technology transfer within industrial clusters (Article 22), a "Sandbox" pilot mechanism to exempt liability for innovation risks, and clarification on the scope of "Support Vouchers."