Determining SME Status in the Construction Sector under Resolution 198/2025/QH15
RegHub explainer by New MarketerLast updated:
Based on:Nghị định 80/2021/NĐ-CP - Ministry of Finance
This explanation was generated by AI and checked by an automated AI review, not by a human expert. It is not legal, tax or accounting advice and may contain errors. Check the official document before you rely on it.
The Ministry of Finance clarified how to determine whether a construction-sector company qualifies as a medium-sized enterprise under Article 5.3 of Decree 80/2021/ND-CP. A medium enterprise in the construction and industrial sector must satisfy: average annual insured employees not exceeding 200 persons; AND annual revenue not exceeding VND 200 billion OR total capital not exceeding VND 100 billion (either financial criterion suffices). In the case presented: fewer than 40 insured employees, but annual revenue above VND 200 billion AND total capital above VND 127 billion - both financial thresholds exceeded. The Ministry concluded the company does not qualify as an SME under applicable law.
Question
A construction company with fewer than 40 insured employees, total capital above VND 127 billion, and annual revenue above VND 200 billion - does it qualify as a medium enterprise or a large enterprise?
Official guidance
Under Article 5.3 of Decree 80/2021/ND-CP detailing the Law on Support for Small and Medium Enterprises:
"A medium enterprise in the agriculture, forestry, and fishery sector; the industrial and construction sector uses employees with social insurance participation averaging no more than 200 persons per year and annual revenue not exceeding VND 200 billion or total annual capital not exceeding VND 100 billion, but is not a micro or small enterprise as defined in clauses 1 and 2 of this Article."
Applying this provision: the construction company with fewer than 40 insured employees, annual revenue above VND 200 billion, and total capital above VND 127 billion has both revenue and total capital exceeding the thresholds for a medium enterprise. Therefore, the company does not satisfy the criteria for a small and medium-sized enterprise under applicable law.
Action points
- The company does not qualify to participate in procurement contracts reserved for small and medium-sized enterprises.
- When determining enterprise scale, both the insured-employee criterion AND the financial criteria (revenue and capital) must be checked simultaneously - exceeding either financial threshold is sufficient to disqualify as a medium enterprise.