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| The BambooVina Production and Trading Co., Ltd. is one of small- and medium-sized enterprises in Thanh Hoa province__Photo: VNA |
The National Assembly, with 429 out of 434 lawmakers in attendance voting in favor, on May 17 adopted Resolution 198/2025/QH15, introducing a range of supportive policies aimed at strengthening the private sector. These include measures to improve access to credit, facilitate land use, provide tax incentives, and ensure that economic relations are not subject to unwarranted criminalization. The Resolution officially took effect on the same day.
Land, credit and tax incentives
The Resolution stipulates that high-tech enterprises, small- and medium-sized enterprises (SMEs), and startups may receive 30 percent reduction in land rental for the first five years from the date of signing contracts with infrastructure operators in industrial parks, cottage industry zones, and technology incubators. This rental support will be reimbursed by the State to the infrastructure operators in accordance with the law. Provincial-level People's Committees are vested with the authority to determine the specific reduction rate.
Currently, there are nearly 450 industrial parks nationwide, with a total area of about 93,000 hectares. However, in practice, SMEs have limited access due to high land rental costs.
For each industrial park or cottage industry zone established after the effective date of this Resolution, provincial-level People's Committees must reserve either at least 20 hectares or 5 percent of the total land area with infrastructure for lease to high-tech enterprises, SMEs, and startups. Additionally, these businesses may also lease unused or underutilized public land and buildings available in their localities.
The Resolution provides that businesses, households, and individual entrepreneurs borrowing loans to implement green projects, circular economy initiatives, or projects aligned with environmental, social, and governance (ESG) standards are eligible for a 2-percent annual interest rate subsidy on such loans.
The Small and Medium Enterprise Development Fund will provide loans to SMEs and startups, and offer seed funding for innovative startup projects and technology incubators.
The Fund will also invest in local and private investment funds to boost capital supply for SMEs and startups, while receiving, managing, and using loans, grants, aid, and entrusted capital from organizations and individuals to support these businesses.
Under the Resolution, startups and startup investment fund management companies will be exempt from corporate income tax (CIT) for two years and receive a 50-percent tax reduction for the subsequent four years on income derived from innovative startup activities.
SMEs are entitled to CIT exemption for three years from the date of their first business registration.
Experts and scientists working in R&D centers, startups, or intermediary organizations supporting innovation will be entitled to personal income tax exemption on income from salaries and wages for the first two years, and a 50-percent reduction for the next four years.
The Resolution allows businesses to allocate up to 20 percent of their taxable income to establish funds for scientific research, technological innovation, and digital transformation. These funds may be used for in-house R&D projects or for outsourcing these projects to qualified entities.
The State will provide free digital platforms and shared-use accounting software to small-sized enterprises, micro-enterprises, and business households and individuals.
Non-criminalization of economic relations
A breakthrough provision in the Resolution is the clarification of principles for handling violations in business activities. It clearly defines the legal and criminal responsibilities of legal entities and individuals, as well as the boundaries between civil, criminal, and administrative liabilities.
Accordingly, civil and economic remedies are prioritized in addressing civil and economic violations. Businesses, households, and individuals will be allowed to proactively rectify violations and compensate for damages.
The Resolution underlines that each enterprise, business household, or individual will be subject to only one inspection or examination (including interdisciplinary inspections) per year, except where there is clear evidence of legal violations. Inspections will be conducted digitally where possible, with a preference for electronic data review. Law-abiding businesses and households may be exempted from on-site inspections.
Additionally, the Resolution introduces principles for handling evidence and assets during the investigation, prosecution, and trial of certain criminal cases, in line with National Assembly Resolution 164/2024. These provisions aim to help businesses and entrepreneurs recover quickly from damages, return assets to productive use, and minimize waste and losses.
To implement these special policy measures, the National Assembly has tasked the Government with reviewing and amending relevant regulations on land, planning, and investment by December 31, 2026. Furthermore, the review and removal of business conditions and overlapping regulations that hinder private sector development must be completed by December 31, 2025. The Government is required to reduce administrative processing times by at least 30 percent, lower compliance costs by 30 percent, and eliminate at least 30 percent of business conditions, with further substantial reductions to follow in subsequent years.- (VLLF)
