Underprivileged students at a training course organised by Know One Teach One (KOTO), an Australian-Vietnamese charity. Specific regulations on social enterprises will be added in a draft amendment to enterprise law that is expected to submit to the National Assembly this May. Photo petrotimes.vn

HA NOI (Biz Hub) — Social enterprises in Viet Nam are hoping to be recognised for what they are doing now, said Nguyen Dinh Cung, acting president of the Central Institute for Economic Management.

Speaking at a seminar in Ha Noi on February 20, Cung added that social enterprises have developed in Viet Nam and their legal status needs to be recognised. Social enterprises are a sustainable business model and play an important role in assisting the Government to provide public services and tackle social issues.

"Until now, there were three articles on social enterprises written in the draft amendment. They include the definition, rights and liabilities of the social firms," Cung said.

"Social enterprises are different from normal businesses only in two ways. Firstly, their objective is not profit but to solve social issues. Secondly, most of their earnings are re-invested in the society. For them, seeking profit is a way of tackling social issues, not their final goal. In other words, they solve the issues by doing business."

Cung said that doing business is difficult but doing social business is more difficult. "The challenges faced by social enterprises are huge, requiring creativity and dynamics from the people who work in these companies," he said.

In the draft amendment to enterprise law, social enterprises are required to spend at least 51 per cent of the total annual profits for reinvestment. Cung added that the owners of social firms aim to solve social issues but mobilise capital from other people. They share the values created for society, but look for profits because they can survive only with their earnings, he added.

According to the Centre for Social Initiatives Promotion (CSIP), there are 200 social enterprises operating in 40 cities and provinces. Many of them make achievements and have great impact on the community. However, they face some difficulties such as access to financial resources and getting training support due to lack of clear legal status and officially recognition by the Government.

Attending the seminar, British Council Vietnam's deputy director Ian Robinson shared the current situation of social enterprises in the UK. He said that in general, there are 70,000 social enterprises and organizations with the same goals operating in that country.

"Social enterprises in the UK have profiles similar to small and medium sized enterprises (SMEs). They operate in all sectors and have got similar impressive statistics like SMEs," Robinson said.

He said that the British social enterprises do not maximise profits like capitalised firms because they aim to ensure break-even point and support for disadvantaged people.

The amendment law is expected to be submitted to the National Assembly for the first time this May. — VNS