The draft dossier for the revised Law on Support for Small and Medium-Sized Enterprises (SMEs) has completed appraisal by the Ministry of Justice and is expected to be submitted to the National Assembly for consideration and approval during the second session of the 16th National Assembly in October 2026.
Rather than merely amending and supplementing several provisions, the draft law would replace the entire 2017 Law on Support for SMEs. The new framework is built on the view that “institutions are a prerequisite,” prioritizing legal reform as a driver for private-sector growth.
On taxation, the draft proposes a three-year corporate income tax exemption for newly established SMEs, particularly household businesses converting into formal enterprises, while also raising the revenue threshold requiring household businesses to declare and pay taxes. Employees working for newly established SMEs would be exempt from personal income tax for two years and receive a 50 percent reduction for the following four years on salary and wage income. The draft also sets out principles for concentrating support on SMEs investing in research and development, the application of science and technology, innovative startups and digital transformation, while giving SMEs priority access to industrial park premises.
These are highly encouraging signals, but they remain only a “necessary condition.” Speaking before the first session of the 16th National Assembly, National Assembly deputy Nguyen Van Than, Chairman of the SME Association, stressed that effective implementation is the true “sufficient condition” if SMEs are to fully realize their innovative potential. He pointed to past campaigns to cut so-called “sub-licenses,” which at times became little more than symbolic exercises: requirements removed from decrees later reappeared in technical standards and regulations, or multiple conditions were merged into a single provision to produce more favorable statistics.
At the same time, a persistent paradox remains: established companies often seek to preserve barriers that prevent new competitors from entering the market. Businesses unable to secure licenses are typically small, little known and rarely invited to provide feedback. This contradiction has often caused discussions on reducing licensing barriers to begin with enthusiasm and determination, only to fall short of expectations. Meaningful reform, he argued, can succeed only when policymakers and leaders at all levels possess the commitment and resolve to overcome competing vested interests.
In addition, several mechanisms already stipulated under existing law have yet to operate effectively, including the SME Development Fund. Reforming the fund’s operations to make it more accessible to businesses instead of maintaining the current situation in which incentives exist but remain largely unusable is considered essential.
The revised Law on Support for SMEs carries major expectations for what has been described as a “new era” for the private economy. To maximize socio-economic impact, however, a sound legal framework must be matched by determined enforcement capable of addressing the three core challenges facing businesses: access to capital, land and administrative procedures.
