The Government should provide incentives and a legal framework for social enterprises as many have not been recognised officially and established or restructured from old non-governmental organisations, said speakers at a recent forum in Ho Chi Minh City.

Vietnam has 300 social enterprises, many of which operate in difficulties. About 50 social enterprises are established every year, said Luu Minh Duc of the Central Institute for Economic Management (CIEM) on November 12, adding that without sufficient State support, most of them cannot exist on their own profits.

There is no overarching definition of social enterprises, and many of them vary from one locality to another, with different perspectives.

According to Duc, they are generally defined as enterprises that pursue the objectives of social development and environmental protection. They have different legal forms, depending on countries, such as NGOs, charity organisations, co-operatives and private firms.

Many social enterprises lack specific business strategies and plans, according to research conducted by the British Council.

The Enterprise Law in 2005 did not clearly define establishment, operational methods, rights and obligations of social enterprises.

The enterprises should make clear why they are established and to whom they serve. They also need to define the purpose of their products and services and how they affect society.

Pham Kieu Oanh, director of the Centre for Social Initiatives Promotion, said many of these enterprises do not have preferential incentives like corporate income taxes, export duties, credit support and infrastructure support.

Speaking at the forum, Nguyen Dinh Cung, also of the Central Institute for Economic Management, said the Law on Enterprises should include a provision on the recognition of the legal status of social enterprises.

Social enterprises should be allowed to receive funds from stakeholders for social purposes and have tax incentives regarding tax and land, Cung said.

The law should also stipulate their obligations such maintaining their principles and goals during operation. In addition, they must not use funds from others for other purposes, except for cost for community service activities.

Other speakers at the event said that there should be a clear distinction between charitable organisations and social enterprises to prevent abuse of charitable activities for illegal benefits.

The forum, co-organised by the CIEM, the British Council and Southern Social Enterprise Club, focused on the creation of a sustainable environment for social enterprises, including a closer relationship between social enterprise and other businesses.-VNA