Approved! Social enterprise receives legal status in Vietnam

Hailed as a “crucial milestone”, the legislation is expected to vastly enhance social enterprises’ ability to operate and thrive.

On 26 November, 86% of Vietnamese MPs voted in favour of revisions to Vietnam’s Enterprise Law which for the first time provides a legal definition of social enterprise and grants social enterprises a number of specific rights.

The amended law defines a social enterprise as a business whose main aim is to address a social or environmental issue and which re-invests a minimum of 51% of its annual profits towards its social or environmental mission.

It states that government will “encourage, support and promote the development of social enterprises.” For instance, social enterprises will enjoy “preferential conditions or be considered for special treatment” in the granting of licenses and certificates.

Moreover, the law authorises them to obtain funding, sponsorship and investment from Vietnamese and foreign individuals, enterprises and NGOs to cover their operational and administration costs.
In addition, it enjoins government to provide detailed business registration procedures and other measures to promote the development of social enterprises.

Pham Kieu Oanh, founder and CEO of Centre for Social Initiatives Promotion (CSIP), says that the law is, “a crucial milestone that highlights the recognition by government and society of the contributions social enterprises are making in Vietnam.”

She adds that the law, “creates new opportunities for social enterprises to conduct policy advocacy and supports the development of a comprehensive ecosystem for SEs. It also makes it easier for them to secure capital and form partnerships with the public, private and third sectors.”

British Council Vietnam has played an important supportive role in securing this outcome. Over the past six years, the British Council and its partners have provided capacity-building activity for social enterprises, awareness raising of social enterprise and social investment, and support for intermediary organisations. In the last two years, a key area of focus has been advocacy at the policy level and the introduction of social enterprise concepts to key government institutions.

Ian Robinson, deputy director of British Council Vietnam said, “Knowing the extent to which social enterprise contributes to the UK economy and has successfully weathered the recent financial crisis, the British Council was keen to share this experience in Vietnam.”

He added: “Working with an influential government think tank, the Central Institute of Economic Management (CIEM), the Ministry of Planning and Investment and key offices of the National Assembly, as well as local and national media, we built relationships and worked hard to ensure these key institutions understood the value social enterprise can bring to an economy.”

Robinson explains that after the British Council organised workshops, a study tour to the UK and meetings with UK experts, CIEM took the decision to promote the inclusion of social enterprise in the revision of the Enterprise Law, as they saw huge potential for applying UK best practice in social enterprise as a viable model to tackle social and environmental challenges in Vietnam.

Further support from the British Council ensured key individuals visited other ASEAN (Association of Southeast Asian Nations) countries to apply their understanding to the ASEAN context and a delegation was also supported to take part in the Social Enterprise World Forum in Seoul.

The legislation was backed by deputy prime minister Vu Duc Dam and vice minister of planning and investment, Dang Huy Dong.

Nguyen Minh Thao, deputy director of the Department for Competitiveness and Business Environment at CIEM said, “Vietnamese social enterprises have emerged and developed steadily during the past years. They have contributed many business innovations to achieving social and community objectives. Their innovations should be nurtured, recognised and promoted. The approval of social enterprise articles on enterprise law affirms the concern, recognition and appreciation from society to social enterprises.”

Next steps include preparation for a decree to guide the implementation of the law and awareness-raising in the provinces, which will take time and effort.

According to Ian Robinson, “The British Council doesn’t intend to pursue that on its own, but is instead working to identify Vietnamese and international partners with which we can work to help turn the new law into reality.”

Source: http://www.theguardian.com/british-council-partner-zone/2014/dec/16/approved-social-enterprise-receives-legal-status-in-vietnam