|New businesses will benefit from a number of exemptions, starting from February. - File Photo
The exemption will benefit newly-established organisations, households, individuals or groups doing business for the first time.
Decree No 22/2020/NĐ-CP, which took effect from the end of February, amends the rules to help new businesses get started.
Small and medium–sized enterprises (SMEs) which had been transformed from business households would also enjoy the relief, according to the decree.
SMEs founded from business households would be exempted from business license fee in three years since their foundation. However, the law did not include exemption for their branches and representative offices.
The Decree allows the exemption of license tax for their branches and representative offices, aiming to encourage new business and transformation of business households into firms.
The exemption was also provided to agricultural cooperatives which were struggling to promote their development.
According to the Ministry of Finance, this would significantly help reduce costs for starting a business in Vietnam and improve the country’s ranking of this indicator set in the World Bank’s Doing Business report.
Vietnam ranked 104th out of 190 economies starting a business in the World Bank’s Doing Business 2019 report with eight procedures conducted in 17 days. The total cost for starting a business in Vietnam was VND3.05 million (US$131).
The new decree also extended the deadline for paying license fee to January 30 of the second year of foundation, instead of the final day of the month in which they started operation.
The exemption of business license fee might cause a drop of estimated VND200 billion per year to the State budget but would help boost the number of new firms, according to the finance ministry.