DECISION

APPROVING THE FIVE-YEAR (2006-2010) PLAN ON DEVELOPMENT OF SMALL- AND MEDIUM-SIZED ENTERPRISES

THE PRIME MINISTER

Pursuant to the December 25, 2001 Law on Organization of the Government;
Pursuant to the Government's Decree No. 90/2001/ND-CP of November 23, 2001 on support for development of small- and medium-sized enterprises;
At the proposal of the Planning and Investment Minister,

DECIDES:

Article 1.- To approve the five-year (2006-2010) plan on development of small- and medium-sized enterprises (SMEs) with the following principal contents:

I. VIEWPOINT ON DEVELOPMENT OF SMEs

1. To consistently realize the policy on development of a multi-sector economy. All economic sectors conducting business activities in accordance with law constitute important components of the socialist-oriented market economy, joining together in long-term development, cooperation and fair competition.

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3. To develop SMEs in an active and sustainable manner toward higher quality, larger quantity and economic efficiency, contributing to creating more jobs, eradicating hunger, alleviating poverty and assuring social order and safety; to develop SMEs in association with national targets and socio-economic development targets, taking into account the conditions of each region or locality; to promote the development of rural industries and traditional trade villages; to attach importance to the development of SMEs in deep-lying and remote areas, areas facing difficult socio-economic conditions; to prioritize the development of, and provide supports for, SMEs owned by ethnic minority people, women or disabled people; to attach importance to the development of SMEs that invest in production of highly competitive products.

4. To gradually shift the State's support activities from direct support to indirect support in order to raise the capability of SMEs.

5. To associate business activities with environmental protection and social order and safety maintenance.

6. To raise the awareness of administrations of all levels about the position and role of SMEs in socio-economic development.

II. OBJECTIVES OF DEVELOPMENT OF SMEs

1. General objectives:

To accelerate the growth rate of SMEs, create a fair competition environment, raise the national competitiveness, and create favorable conditions for SMEs to make greater and greater contributions to economic growth.

2. Specific objectives:

a/ The number of newly established SMEs will be around 320,000 (a year-on-year increase of around 22%);

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c/ The ratio of SMEs engaged in export activities will reach 3 - 6% of the total number of SMEs;

d/ Around 2.7 million new jobs will be created in the 2006-2010 period;

e/ An additional number of 165,000 laborers will be technically trained to work in SMEs.

III. MAJOR TASKS

1. To further improve and ensure the stability of the legal framework, reform administrative procedures and financial policies in order to create an equal, transparent and open investment and business environment for SMEs to develop.

2. To assess impacts of policies on SMEs, periodically organize talks between state agencies and SMEs, thereby guiding and responding to burning requirements for business development.

3. To adjust the tax system in an appropriate manner in order to encourage people to start their own businesses, and reform the accounting regimes and reporting forms in the direction of simplification in order to encourage enterprises to declare and pay taxes voluntarily, facilitating tax payment by enterprises while combating tax evasion.

4. To redress the shortage of ground areas for production, and step up environmental protection by elaborating and publicizing land use planning and plans; to create conditions for the development of industrial parks and industrial complexes of reasonable sizes and offer suitable land rent rates to SMEs; to support the relocation of polluting SMEs from population areas and urban centers to industrial parks or industrial complexes.

5. To revise and supplement regulations in order to accelerate the setting up of credit guarantee funds for SMEs in localities; to promote the development of banks of various types and joint-stock commercial banks that exclusively serve SMEs, including the development of financial leasing operation and the provision of loans without mortgaged security assets to SMEs having feasible and efficient projects, in order to satisfy their investment and business capital demands.

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7. To speed up the building of an enterprise information system to serve as a basis for the assessment of the actual state of SMEs, the formulation of policies and the supply of information in service of production and business activities of enterprises.

To organize the education and popularization of business experience and examples of determination to lawfully make fortunes among the population. To study the experimental inclusion of business knowledge in the curricula of general education schools, universities, technical secondary schools and vocational schools in order to promote the business spirit, develop the entrepreneurs' culture and gain the entire society's support for enterprises conducting business in accordance with law.

8. To develop the market of business development services (for both suppliers and demanders), and perfect the legal environment for business development services, attaching importance to the management of service quality. To encourage associations to provide business development services, actively carry out programs on assistance for development of SMEs and take part in the formulation of mechanisms, policies and programs in support of SMEs in order to enhance their role in providing assistance and representing legitimate interests of SMEs.

9. To raise the efficiency of activities of coordinating assistance for the development of SMEs, and enhance the role of the Council for Promotion of Development of SMEs; to enhance the capacity of localities for management, promotion and development of SMEs.

IV. GROUPS OF SOLUTIONS

1. Group 1: Simplification of regulations to facilitate the business registration, market entry and activities of enterprises.

2. Group 2: Creation of conditions for SMEs to have ground areas for their production.

3. Group 3: Creation of favorable conditions for SMEs to get access to capital sources, giving priority to enterprises producing export goods and goods with high added values.

4. Group 4: Formulation of programs on assistance for raising the capacity and improving the competitiveness of SMEs.

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6. Group 6: Creation of a socio-psychological environment favorable for the sector of SMEs.

7. Group 7: Management of implementation of the plan on development of SMEs in the 2006-2010 period.

The groups of solutions and responsible implementing agencies are specified in the Appendix to this Decision.

V. ORGANIZATION OF IMPLEMENTATION

In order to organize the implementation of the 2006-2010 five-year plan on development of SMEs, ministries, branches and localities shall integrate programs on supports for development of SMEs with national target programs as well as their specific target projects and programs with a view to efficiently using the resources.

At the central level:

1. The Council for Promotion of Development of SMEs shall act as the general coordinator in the course of implementation of this plan and assess the implementation of this plan by responsible implementing agencies in ministries, branches and localities. Its tasks include:

a/ Overseeing responsible implementing agencies and reporting on problems arising in the course of plan implementation;

b/ Proposing to the Prime Minister necessary changes in or adjustments to programs of action or groups of solutions to address problems that arise in the course of implementation and make the plan infeasible and behind the set objectives;

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2. The Finance Ministry shall assume the prime responsibility for, and coordinate with the Planning and Investment Ministry in, synthesizing and elaborating plans on state budget funds for realization of solutions set forth in the program of action for the plan on development of SMEs according to regulations.

3. Ministries and branches shall prepare conditions for applying each solution as scheduled.

At the provincial level:

1. Provincial-level People's Committees shall work out their own plans on development of SMEs, plans of action and implementation schedules; coordinate with ministries and branches in developing SMEs in their localities; and arrange personnel and allocate annual budget funds for implementation of those plans in their provinces.

2. Provincial-level coordinating committees for implementation of plans on development of SMEs shall be set up under provincial-level People's Committees and headed by vice presidents of provincial-level People's Committees. Members of a provincial-level coordinating committee for implementation of plans on development of SMEs include representatives of relevant provincial services and enterprises' associations in the province, and the director of the provincial Planning and Investment Service acts as its permanent secretary.

3. Tasks of the provincial-level coordinating committees for implementation of plans on development of SMEs and their permanent secretaries are decided by provincial-level People's Committees.

4. Annually, provincial-level People's Committees shall send reports on implementation of plans on development of SMEs to the Planning and Investment Ministry for summing up and subsequently reporting to the Prime Minister.

Article 2.- This Decision takes effect 15 days after its publication in "CONG BAO."

Article 3.- The Chairman of the Council for Promotion of Development of SMEs, ministers, heads of ministerial-level agencies, heads of government-attached agencies, and presidents of People's Committees of provinces and centrally run cities shall implement this Decision.

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APPENDIX

FIVE-YEAR (2006-2010) PROGRAM OF ACTION FOR DEVELOPMENT OF SMEs
(Promulgated together with the Prime Minister’s Decision No. 236/2006/QD-TTg of October 23, 2006)

Solution group 1: Simplification of administrative procedures to facilitate business registration, market entry and activities of enterprises

Specific tasks

Responsible agencies

Results

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Solution 1: Improving the business registration process

1.1. Elaborating a scheme on organization of the national system of business registries with uniform professional operations, equal operation funding, organizational apparatus, payrolls and personnel

Ministry of Planning and Investment (MPI) assuming the prime responsibility and  coordinating with Ministry of Home Affairs (MoHA) and the Ministry of Justice (MoJ)

Scheme on the national system of business registries

2008

1.2. Applying common identification number for business registration, statistics and tax payment

MPI assuming the prime responsibility and  coordinating with Ministry of Finance (MoF) and General Statistics Office (GSO)

Scheme on common identification numbers for nationwide application

2008

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MPI assuming the prime responsibility and coordinating with ministries, branches and provincial People’s Committees

Formation of a national system of information on business registration

2008

1.4. Reviewing and evaluating dossiers, procedures and steps of business registration, seal carving, registration of tax identification numbers

MPI assuming the prime responsibility and coordinating with MoHA, MoF, MoJ and Ministry of Public Security (MoPS)

Scheme on formulation of “one-stop shop” mechanism in provinces and cities

2006-2008

Solution 2: Specifying business conditions for domains not yet subject to business conditions

Studying, elaborating and submitting to the Government for promulgation legal documents on conditional business domains and business conditions for branches and trades not yet governed by any guiding documents. Specifically:

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- Providing for issuance and management of issuance of unlisted securities to the public...

MoF

MoF

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Issuance of a decree

Issuance of a decree

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2007

Solution 3: Adjusting regulations concerning commencement of operations after business registration

3.1. Studying amendments to Decree No. 58/2001/ND-CP on management and use of seals, the section concerning seals of enterprises

MoPS

Amendments and supplements to Decree No. 58/2001/ND-CP

2007

3.2. Studying amendments and supplements to Decree No. 89/2002/ND-CP in the direction of encouraging enterprises to print invoices by themselves and make registrations at tax offices, in order to raise autonomy and accountability of enterprises in transactions

MoF

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2007

3.3. Studying and elaborating documents guiding ministries and provincial People’s Committees in performing the function of providing legal aid to enterprises

MoJ

Issuance of a decree and guiding documents

2007

Solution 4: Perfecting legal provisions on commercial transactions

4.1. Enhancing the enforcement of the 2003 Ordinance on Commercial Arbitration

MoJ

Establishment of two more arbitration centers, bringing the total number of arbitration centers to seven

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4.2. Studying, elaborating and promulgating the Law on Notary Public in order to create a sufficient legal ground for notarization of documents in transactions, settlement of disputes... 

MoJ

Promulgation of the Law on Notary Public

2007 - 2008

4.3. Drafting the Ordinance on Registration of Security Transactions, in order to unify legal provisions on registration of security transactions, regardless of immovables or movables, to build a uniform national database on security transactions, publicize and determine priority order of payment, simultaneously effective to third parties; organizing concentrated registration of security transactions by a national registration system, thus helping individuals and organizations contact registries easily and get access to information on security transactions at a sole address; clearly defining validity of registrations of security transactions

MoJ

Draft Ordinance on Security Transactions for submission to the National Assembly Standing Committee

2007 - 2008

4.4. Further elaborating and perfecting provisions on contracts in such specialized laws as the Law on Credit Institutions, the Maritime Law, the Aviation Law, the Petroleum Law, the Insurance Business Law, the Construction Law, etc., in order to govern particular issues

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Issuance of documents guiding the performance of contracts in domains of particular nature

2006-2010

4.5. Amending and supplementing regulations on loan guarantee mechanisms to make them compliant with the provisions of the Civil Code on mortgage and pledge 

MoJ assuming the prime responsibility and coordinating with State Bank

Issuance of new regulations on security transactions

2007

4.6. Further studying amendments and supplements to the 2004 Bankruptcy Law in order to redress its shortcomings in the direction of broadening the application of bankruptcy procedures to all business entities, regardless of individuals, households or enterprises; allowing secured creditors to file petitions to request the opening of bankruptcy procedures; reducing the State’s intervention in the process of bankruptcy settlement; enhancing the autonomy and right to self-determination of involved parties in the course of bankruptcy settlement     

MoJ

Specific proposals on amendments and supplements to the Bankruptcy Law

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Solution 5: Perfecting regulations on accounting regime and financial statements

5.1. Broadening the scope and subjects of application to cover SMEs. Studying and developing simple accounting methods applicable to small-sized enterprises with low management level; simplifying the system of accounts

MoF

Promulgation of amended and supplemented regulations

2007

5.2. Amending and supplementing Decision No. 1177/TC/QD/CDKT of December 23, 1996, and Decision No. 144/2001/QD-BTC in the direction of simplifying forms of financial statements of enterprises

MoF

Promulgation of amended and supplemented regulations

2007

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MoF

Promulgation of amended and supplemented regulations

2007

Solution 6: Perfecting tax-related regulations

6.1. Amending and supplementing regulations on enterprise income tax in the direction of expanding the scope of taxpayers; simplifying tax calculation methods and bases; reducing cases eligible for tax preferences in order to simplify the preferential policy and give opportunities to SMEs to get easy access to and enjoy preferences

MoF

Promulgation of amended and supplemented regulations

2008

6.2. Narrowing down subjects paying enterprise income tax by the presumptive method in order to encourage presumptive tax payers to make business registrations under the Enterprise Law

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Promulgation of amended and supplemented regulations

2008

6.3. Broadening the application scope of the mechanism of self-assessment and payment of taxes by taxpayers in the direction of clearly defining rights and responsibilities of tax offices, taxpayers and concerned organizations and individuals in the course of tax payment and collection

MoF

Promulgation of amended and supplemented regulations

2007

 6.4. Studying and supplementing regulations on depreciation of fixed assets in the direction of permitting the application of accumulative depreciation in order to encourage enterprises, including SMEs, to renew machinery, equipment and technology

MoF

Promulgation of amended and supplemented regulations

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6.5. Amending and supplementing decrees and circulars guiding the implementation of the Customs Law in the direction of simplifying customs procedures and clearance process for goods, making public export and import tariffs, creating favorable conditions for SMEs to make declarations, application of goods codes and prices by themselves

MoF

Promulgation of amended and supplemented regulations

2006 - 2010

Solution 7: Perfecting regulations on technology

7.1. Studying and drafting the Bill on Quality of Products and guiding decree(s)

MoST

Bill on Quality of Products and draft guiding decree(s)

2007

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MoST

Promulgation of regulations

2009

Solution group 2: Creation of conditions for SMEs to have ground areas for their production

Solution 8: Perfecting policies on land

8.1. Establishing a national system of land registries in order to speed up the grant of land use right certificates and encourage the registration of land transactions

Ministry of Natural Resources and Environment (MoNRE)

Establishment of land registries in provinces

2008

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MoNRE, MoF, provincial-level People’s Committees

Land use planning

2010

8.3. Supporting SMEs in relocating their polluting production and business establishments from urban centers or population areas by permitting the conversion of rights to use land from production land to residential land for the purpose of selling such land and paying relocation expenses

MoNRE

Promulgation of appropriate amended and supplemented regulations

2006 - 2007

8.4. Making statistics on and recovering barren and unused land or land used for improper purposes, in order to lease such land areas to enterprises

MoNRE and local People’s Committees

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2008

Solution group 3: Creation of conditions for SMEs to get access to financial sources

Solution 9: Raising capability of SMEs to get access to financial sources

9.1. Submitting to the Government for issuance a Resolution on a number of credit solutions for regions II and III of mountainous areas, islands, areas densely inhabited by Khmer people, traders, and communes covered by Program 135 (areas with difficult conditions) in the direction of separating social policy credit from commercial credit: the Social Policy Bank and the Development Bank provide preferential credits to areas with difficult conditions; commercial banks provide loans under commercial credit mechanism applicable to areas with difficult conditions.

State Bank

Amendments and supplements to regulations on credit supports, social policy banks and commercial banks

2006

9.2. Studying amendments to the Regulation on establishment and operation of the Credit Guarantee Fund for SMEs

MoF

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2007

9.3. Studying and promulgating the Regulation on establishment and operation of the Venture Fund (provided for in Decree No. 99/2003/ND-CP promulgating the Regulation on hi-tech parks)

MoST coordinating with MoF

Issuance of guiding documents

2006

Solution group 4: Raising of competitiveness of SMEs

Solution 10: Maximizing positive impacts of WTO entry

Maximization of positive impacts of WTO entry covers evaluation of goods items of the highest exportability, selection of priority commodity groups, provision of supports for raising competitiveness in the 2006 - 2010 period, with the following two principal contents:

Content 1: Evaluation of commodity items of the highest exportability and selection of 4 most competitive commodity groups, including:

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- Selection of the most competitive commodity group  from selected commodity groups when Vietnam becomes a WTO member;

- Advertisement for selected groups of goods of SMEs;

- Elevation of knowledge about international standards of SMEs producing and trading in selected commodity groups.

Content 2: Providing supports for 4 selected commodity groups, covering:

- Providing services of technology forecast, training and consultancy to SMEs, providing supports for raising technical capacity, productivity, quality and competitiveness of products and services 

- Raising the capability of consultants, organizations providing training service, business development service...;   

- Providing supports for development of linkups between branches or enterprises;

- Providing supports for export of goods of the selected groups

Ministry of Trade (MoT) in coordination with branch-managing ministries

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Selection of 4 priority commodity groups for implementation of programs on assistance for raising competitiveness of SMEs

- 500 SMEs in each commodity group are covered by the program

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- Development of 10 linkups for each branch

- 1,000 SMEs in each commodity group eligible for export supports

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2007 – 2010

Solution 11: Assisting the development of SMEs in areas with difficult conditions or in ethnic minority areas in order to create more jobs in these areas

11.1. Disseminating legal information on enterprises

MoJ

Most difficult provinces

2007

11.2. Training people who start their own businesses and administer their business

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Training of 5,000 people in the most difficult provinces

2006 - 2010

11.3. Providing supports for raising competitiveness of SMEs operating in areas with difficult conditions and in ethnic minority areas

MoT

Provision of supports for 1,000 SMEs in the most difficult provinces

2007 - 2010

11.4. Providing supports for, raising the number and quality of consultants, training organizations and enterprises operating in  areas with difficult conditions and in ethnic minority areas

MPI

Development of 10 consulting and training organizations in the most difficult provinces

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Solution group 5: Development of human resources to satisfy requirements of development of SMEs

Solution 12: Developing the labor market

12.1. Studying and renewing contents, programs and methods of training at universities, colleges and vocational schools in the direction of satisfying requirements of production, business and service activities, providing learners with professional knowledge, practicing skills and raising their sense of responsibility; quickly introducing information technology as a training major and applying it to the management of training activities; promoting association between universities, colleges, vocational schools and enterprises in order to improve practicing skills of trainees after graduation  

Ministry of Education and Training (MoET) and Ministry of Labor, War Invalids and Social Affairs (MoLISA)

Elaboration of implementation plans

2008

12.2. Reviewing, adjusting and supplementing the planning on the network of vocational establishments in the direction of socialization  

MoLISA

Adjustments to the planning on vocational establishments

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12.3. Decentralizing the grant of permits for establishment of job-training centers

MoLISA

Promulgation of amended and supplemented regulations

2007

12.4. Assessing existing forms of vocational education before proposing reforms to raise efficiency of these activities

MoLISA coordinating with MoET

Assessment of existing methods of technical job training

2008

Solution group 6: Creation of a socio-psychological environment favorable for the sector of SMEs

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Intensifying the communication and dissemination of knowledge about SMEs to improve the awareness of administrations at all levels and population communities of these enterprises

Ministry of Culture and Information

Broadcasting of communication and dissemination programs, printing of documents, organization of forums

2006-2010

Solution 14: Educating business culture in universities, colleges, professional secondary schools and vocational schools

Including a number of non-compulsory specialized subjects on enterprises in training curricular of universities, colleges, professional secondary schools and vocational schools

MoET and MoLISA

Inclusion of specialized subjects on business in training curricula

2007

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15.1. Studying amendments and supplements to Decree No. 90/2001/ND-CP of November 23, 2001

MPI assuming the prime responsibility and  coordinating with other ministries and branches

A decree amending and supplementing Decree No. 90/2001/ND-CP

2007

15.2. Perfecting the unified system of collection and processing of information and statistics on SMEs 

GSO, MPI and MoF

Issuance of guiding documents

2007

15.3. Coordinating international assistance activities and creating conditions for concerned parties in selected branches to get access to the assistance

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Increase of total ODA capital and non-refundable aids for the assistance of SMEs

2006 - 2010