Hanoi’s latest plan to support small and medium enterprises (SMEs) weather the current Covid-19 crisis continues to show the city’s strong commitment to the business community, according to Mac Quoc Anh, vice president cum general secretary of the Hanoi Association of Small and Medium Enterprise (Hanoisme).

Hanoi expects to provie further support for SMEs development. Photo: Khac Kien.

Anh refers to the municipal People’s Committee plan No.167/KH-UBND detailing measures to support SMEs in 2021 with an estimated amount of VND402 billion (US$17.3 million), adding the plan provides substantial support for micro, small and medium enterprises.

Following the plan, Hanoi would give priority to supporting innovative and digital enterprises, which are expected to lay a foundation for the capital city’s socio-economic development.

To further expand the business community, Hanoi eyes a 10% annual growth rate of business creation, or 30,000 new enterprises per year, while providing support for SMEs to narrow its gap with their peers in leading economies in the Southeast Asian region in terms of technology, human resources and competitiveness.

Moreover, Hanoi would promote stronger linkages among SMEs, state-owned enterprises (SOEs) and foreign leading firms, so that Vietnamese firms could further integrate in to the global value and production chains, stated the local authorities.

Hanoi expects SMEs operating in the city would contribute 45% of its gross regional domestic product (GRDP) by 2025, up from the current 40% rate.

Additionally, the SMEs, accounting for 97% of total enterprises in Hanoi, are expected to make up over 25% of the city’s exports and create 150,000 new jobs, stated the municipal People’s Committee in a plan detailing measures to support SMEs in 2021.

In order to realize these targets, Hanoi is committed to ensuring a fair, transparent and stable business environment for all economic components.

The capital city would give priority to administrative reforms including expanding the provision of public online services, providing tax incentives and preferential lending rates, as well as adequate infrastructure for enterprises to operate and develop.

Notably, Hanoi would offer financial support for SMEs to participate in international exhibitions, conferences and workshop to look for new markets and partners; provide free training courses for startups and up to 70% of expenses for courses related to business administration and corporate governance.

The city is also encouraging household businesses to formalize themselves as enterprises by providing support in administrative procedures, lowering, waiving fees and taxes for their first years of operation.

To date, Hanoi has over 290,000 operational enterprises, the second highest figure nationwide, behind Ho Chi Minh City.

In the first seven months of 2020, nearly 14,800 enterprises were established with registered capital of VND203 trillion (US$8.75 billion), down 5% in the number of enterprises but up 6% in capital year-on-year.