For the first time, venture funds have been defined in the law, a crucial step in completing the legal framework for the creation of a start-up ecosystem.
Tuyencongnhan.vn and hoteljob.vn were launched five year ago when Vietnam’s tourism started to boom. But both start-ups faced difficulties in raising funds for initial growth. Venture capitalists play a crucial role in this stage as they are willing to bear the risks to invest in such start-ups.
Despite the presence of venture capital firms in Vietnam in recent years, there has yet to be any legal documents regulating the establishment and operation of such firms. For this reason, many Vietnamese projects have to be brought overseas for registration.
"Many successful Vietnamese start-ups have been valued highly by foreign venture funds. However, they have to go to Singapore, Korea or Chile to register their businesses. The reason is Vietnam has yet to have a market for venture investment. Venture funds are not sure about how they can divest when they want to exit the market", Thach Le Anh, Chairman of Technology Commercialisation Project, Ministry of Science and Technology, said.
At present, the research group of the Enterprise Development Agency under the Ministry of Planning and Investment has started reviewing current policies to evaluate the issues arising from the formation and operation of venture capitalists.
The research group plans to submit a preliminary assessment towards the end of December. This is aimed at cutting administrative procedures and the time required to launch a venture fund, a step to building a nurturing environment for start-ups.
