Policies to support innovation start-ups

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Policies to support innovation start-ups

According to the White Book of Vietnamese Enterprises published by the Ministry of Planning and Investment in 2020, as of December 31, 2018, small and medium enterprises accounted for 97.2% of the total number of enterprises nationwide and the rate of The net revenue of the group of small and medium enterprises accounts for 27.2%.

Currently, in order to improve the competitiveness of the small and medium-sized enterprise group, the Government of Vietnam has had supporting policies to create favourable conditions for these enterprises to develop, including: credit access support; tax support; legal advice support; supporting human resource development,… In which, enterprises belonging to the group of innovation start-ups are considered as having of creating a driving force for the construction and development of the economy in the era of the digital economy and revolution Industry 4.0. Therefore, the Government has given many incentives to this group of businesses to boost Vietnam’s economy in the future.

As defined in the Law on Small and Medium Enterprises Support, “Innovation start-ups are small and medium-sized enterprises established to implement their ideas on the basis of exploiting intellectual property, technology, new business model and rapid growth”. The support that can be received include:

– Support on consultancy on intellectual property; intellectual property utilization and development:

  • Cover 100% price of contract for consultancy on establishment, transfer, and protection of intellectual property rights;
  • Cover 100% price of contract for consultancy on formulation and implementation of intellectual property policies and strategies;
  • Cover 100% price of contract for consultancy on designs, protection registration and utilization of brand names, industrial designs, and patents;
  • Cover 100% price of contract for consultancy on intellectual property associated with geographical indication.

– Support on procedures for technical regulations and standards, quality measurement; testing and improvement of new products and business model:

  • Provide information on system of domestic and international standards and regulations, free of charge, related to the lines of business of the creative startups;
  • Cover 100% price of contract for consultancy on basic standard formulation;
  • Reduce 50% of fee for testing measurement instruments; reduce 50% of fee for survey, calibration, and inspecting of measurement instruments and standards; reduce 50% expenses associated with quantitative conformity mark of pre-packed goods in conformity with technical requirements of measurement but not exceeding VND 10 million per testing and not exceeding once a year;
  • Cover 100% of price of contract for consultancy enabling creative startups to carry out measurement itself;
  • Reduce 50% of fee for testing of goods quality at the testing system in regulatory agencies but not exceeding VND 10 million per testing and not exceeding once a year.

– Support on technology applications and transfers: Cover 50% price of contract for high technology applications and contract for technology transfers but not exceeding VND 100 million per contract and up to one contract per year.

– Support on training, information, trade promotion, and commercialization:

  • Cover 50% expenses associated with intensive training in: Product development; product commercialization; appealing for investment; market development; connecting startup network with scientific researchers. The supported expenses do not exceed VND 20 million per training course and up to 1 training course per year;
  • Free access to information and database of patents, technology and research findings;
  • Cover 100% expenses associated with stalls in domestic and international trade fairs; give the creative startups priority to participate in trade promotion programs funded by state budget;
  • Free access to information and communication in terms of connection with creative startup network, attract investment from creative startup funds.

– Support on technical facilities, incubators, and common working areas:

  • Cover 100% expenses associated with using equipment at technical facilities that support such enterprise;
  • Cover 50% of expenses but not exceeding VND 5 million per month for an innovation start-up associated with fee for participation in incubators, common working areas intended for creative startups.

In order to be eligible for the support outlined, an innovation start-up needs to meet the following conditions:

  • Operational period not exceeding 05 years from the date of being granted the first enterprise registration certificate;
  • There has not been any public offering of securities for a joint stock company.

In addition, in Clause 3, Article 18 of the Law on support for small and medium-sized enterprises, the Government also encourages investors to invest in small and medium-sized innovative startups by exempting, reducing corporate income tax with a definite term for incomes from investments in innovative start-ups in accordance with the law on corporate income tax. However, this corporate income tax support has not yet had a regulation to guide the specific types of income that will be exempt from or reduced corporate income tax for investors.

Many policies have been introduced to support small and medium enterprises, however, in order for these policies to achieve high efficiency, in addition to the support of state management agencies, enterprises should actively research and comply with the Government’s policies.

If you have any questions or require any additional information, please contact Apolat Legal – An International Law Firm in Viet Nam.

This article is for general information only and is not a substitute for legal advice.