SMALL- AND MEDIUM-SIZED ENTERPRISES MAY BORROW UP TO 70 % OF INVESTMENT CAPITAL
Many new policies are prescribed at the Decree No. 111/2015/ND-CP dated November 03, 2015 of the Government on development of supporting industries - means industries that manufacture materials, details, components and spare parts for manufacturing finished products.
Firstly, the Decree prescribes that the incentive policies for projects manufacturing supporting industry products on the list of products of supporting industries prioritized for development. Income tax shall be exempted from income tax for imports to create fixed assets in accordance with the Law on Import Duty and Export Duty and guiding documents. Projects manufacturing supporting industry products on the list prioritized for development are entitled to loans at investment credit interest rates from the state investment credit source and to borrow short-term loans in Vietnam dong from credit institutions and foreign bank branches at interest rates conformable with the ceiling interest rate set by the State Bank in each period. And turnover of supporting industry products on the list of products of supporting industries prioritized for development may be declared for value-added tax on a monthly, yearly or temporary basis.
Small- and medium-sized enterprises manufacturing supporting industry products on the list of products of supporting industries prioritized for development, land and water surface rent are entitled to land and water surface rent reduction or exemption in accordance with the land law; For a project of special significance or large scale bringing about socio-economic benefits that needs a higher support level than the above-mentioned level, the Ministry of Finance shall coordinate with the Ministry of Planning and Investment in submitting such level to the Prime Minister for decision in accordance with the land law at the proposal of the provincial-level People’s Committee of the locality where the project is located. They may borrow up to 70 percent of investment capital from credit institutions with the guarantee of organizations providing credit guarantee for small- and medium-sized enterprises.
However, in order to receive the incentives, for small- and medium-sized enterprises must have the total value of assets lawfully mortgaged or pledged at the credit institution at least equal to 15 percent of the loan value after deducting the value of the assets mortgaged or pledged for other loans; put at least 20 percent of its equity capital in the investment project after deducting the equity capital amount arranged for other projects and by the time of guarantee request, owing no state budget debts or non-performing loans to other credit institutions and economic organizations.
