SME law to be amended to boost innovation and competitiveness

SME law to be amended to boost innovation and competitiveness

The government is drafting comprehensive amendments to the Law on Support for Small and Medium-Sized Enterprises to create a more coherent, long-term and effective legal framework for the business sector.

The Ministry of Finance is drafting sweeping amendments to the Law on Support for Small and Medium-Sized Enterprises (SMEs), aiming to build a more coherent, long-term and effective legal framework for the sector as the country pursues double-digit economic growth with businesses positioned as a key driver.

Trịnh Thị Hương, deputy director of the ministry’s Department for Private Enterprise and Collective Economy Development, said the revisions come as Viet Nam targets double-digit economic growth, in which businesses are identified as a key driver.

The amendments will focus on providing more transparent, practical and targeted support policies aimed at improving labour productivity, innovation, competitiveness and the ability of SMEs to participate in value chains.

In addition, the draft also seeks to digitalise the entire business support process, reduce administrative procedures and compliance costs, and expand decentralisation to local authorities while strengthening accountability in implementation.

Hương said Viet Nam began supporting SMEs in the early 1990s through decrees and specific policies. In 2017, the Law on Support for SMEs was officially enacted as the country’s first dedicated legal framework for the sector.

She added that the Law on Support for SMEs had helped many firms transform their business models and improve governance capacity, while acknowledging that shortcomings remain in both policy design and implementation.

She pointed out that access to support measures such as credit guarantees, innovation programmes and assistance with production land and premises remains limited.

Gulmira Asanbaeva, director of the productivity ecosystems for decent work programme at the International Labour Organisation (ILO) in Viet Nam, said SMEs play a central role in the Vietnamese economy by creating jobs, supplying goods and services and supporting livelihoods for millions of workers and local communities.

The ILO welcomed the efforts of the Ministry of Finance and related agencies to improve SME support policies, she said.

In the context in which Viet Nam becomes more deeply integrated into regional and global markets, SMEs need support to meet higher standards on quality, sustainability, labour compliance and responsible business practices, she said

Policies should focus on improving workplace safety and social security, she said, urging more substantive support, including simplifying procedures, improving data connectivity and enabling businesses to develop sustainably amid deeper global economic integration. 

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