New regulations effective October 2021

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Supporting startup SMEs; support policy for employees and employers affected by the Covid-19 pandemic; and classification of assets, risk provisioning levels are new regulations taking effect this October.

THE GOVERNMENT’S DECREE NO. 80/2021/ND-CP DATED 26 AUGUST 2021 ON THE IMPLEMENTATION OF A NUMBER OF ARTICLES OF THE LAw ON SUPPORT FOR SMALL AND MEDIUM-SIzED ENTERPRISES. THE DECREE TAKES EFFECT ON 15 OCTOBER 2021.

According to the Decree, a small or medium-sized enterprise shall be provided with the following support on technologies: support up to 50 percent of the value of the appropriate technology transfer consultancy contract, but not exceeding VND100 million (USD4350)/contract per year; support up to 50 percent of the value of the contract for consulting digital transformation solutions for enterprises in terms of business, administration, production and technology processes and transformation of business model, but not exceeding VND50 million/contract per year and VND100 million/contract per year, respectively; etc.

Concurrently, a small or mediumsized enterprise shall be provided with support to cover 100 percent of total expenses of a training course on business startup and up to 70 percent of total expenses of a training course on corporate governance for small- and medium-sized enterprises; be exempted from fees for accessing and attending online lectures available on the online training systems of the Ministry of Planning and Investment and provincial-level People’s Committees; etc.

Besides, innovative startup SMEs, SMEs participating in industrial linkage clusters and value chains shall be provided with interest rate support by the state budget when borrowing loans for medium or long term at credit institutions to carry out the production and business plans and projects.

STATE BANK’S CIRCULAR NO. 11/2021/TT-NHNN DATED 30 jULY 2021 ON THE CLASSIFICATION OF ASSETS, RISK PROVISIONING LEVELS AND METHODS AND USE OF PROVISIONS FOR HANDLING RISKS IN OPERATIONS OF CREDIT INSTITUTIONS AND FOREIGN BANK BRANCHES. THIS CIRCULAR TAKES EFFECT ON 1 OCTOBER 2021.

Accordingly, a credit institution or foreign bank branch shall classify loans into the following 5 groups: Group 1 - Pass; Group 2 - Special mention; Group 3 - Sub-standard; Group 4 - Doubtful; Group 5 - Loss. The classification of loans must fully satisfy the following requirements: Having an internal credit-rating system suitable to its business operations, customers and types of risk of loans, and having tested this system for at least 01 year; having a risk provisioning policy; etc.

Besides, a credit institution or foreign bank branch shall use risk provisions to handle risks in the following cases: Its institutional customers are dissolved or go bankrupt under law or its individual customers are dead or missing; Loans are classified into group 5 (Loss).

After a minimum period of 05 years, from the date of using provisions to handle risks and after taking all measures to recover unrecoverable debts, credit institutions, foreign bank branches shall be allowed to decide to release the risk-handled debt off the off-balance sheet.

THE GOVERNMENT’S RESOLUTION NO. 116/NQ-CP DATED 14 SEPTEMBER 2021 ON THE SUPPORT POLICY FOR EMPLOYEES AND EMPLOYERS AFFECTED BY THE COVID-19 PANDEMIC FROM THE UNEMPLOYMENT INSURANCE FUND

Accordingly, employees affected by the Covid-19 pandemic shall receive support in cash from the Unemployment Insurance Fund’s surplus balance, in which, the supporting amount shall be based on the unemployment insurance premium payment period during which the employee has not yet received any unemployment allowance.

Employees eligible for this support are those who are paying unemployment insurance premiums as of 30 September 2021 (excluding some subjects) and those who have stopped paying unemployment insurance premiums due to the termination of labor contracts or working contracts in the period from 1 January 2020 to the end of 30 September 2021, with the unemployment insurance premium payment period reserved in accordance with the law on employment, excluding persons who are enjoying monthly pensions.

Besides, employers that have been paying unemployment insurance premiums before 1 October 2021 as prescribed are allowed to reduce the contribution rate from 1 percent to 0 percent of the monthly wage fund of the employees obliged to participate in unemployment insurance.