IDEAS Insights Vietnam's emergent social enterprise sector - Page 4

Social Enterprise in Vietnam is also now gradually supported by favourable tax exemption laws, applicable to organisations that ‘provide employment and job training opportunities to people with disabilities and ethnic minorities’. For instance, businesses that provide public services are eligible for a 10% income tax rate. [12] Prior to 1986, Vietnam did cultivate various models which were in some ways prototype social enterprises. Among these, Cooperatives were the government’s preferred business structure: by 1986 there were almost 73,500. [13] Many of these were specifically designed to provide work and raise living standards for the poor. However, the number of Cooperatives has now fallen to around 18,000 (of which some 50% operate in Agriculture). Indeed, ‘since 2010, the new status of Vietnam as a “lower middle-income country” and the threat of a potential decline in international development funds have urged Vietnamese non-profit social organizations to evolve into more market-driven business entities’. [14] Large development groups, such as the Department for International Development (DFID) in the U.K., or the Swedish International Development Cooperation Agency (SIDA), have reduced their involvement in Vietnam since this reclassification of its development status. Fig. 1: Hanoi, 1989. 2