Vietnam is planning to adopt a new law, which forms the basis for the establishment of venture capital funds in the country and calling for more money to invest in startup activities, which is being strongly encouraged.
According to Deal Street Asia, Vietnam will target growth rate of 7% per year until 2020. The draft law on supporting small and medium enterprises, which is expected to be adopted in the 3rd parliamentary session, has a section dedicated to Startup Company called creative enterprise”.
With the adoption of proposals, Vietnam will officially legalize the provisions in the establishment and operation of venture capital funds and angel investment funds.
Vietnam Government is also considering promoting startup activities to boost the economy, which depends heavily on traditional areas. Besides, Vietnam is also attracting significant inflows of FDI capitals with 11.02 billion USD in the first 9 months of 2016, increasing by 12.4% over the same period last year.
According to economic experts, the new law for investors may include provisions to help tax procedures become more favorable, shortening the time of investment license issuance. If passed by the Vietnam National Assembly, the new law can alter the perspective of foreign investors in Vietnam as well as attracting more investment capital from abroad.
The new regulations will also help Vietnam to avoid loss of capital when many entrepreneurs choose foreign countries, such as Singapore, to place their headquarters to take advantage of attractive policies like tax cuts or simple establishment procedures.
Besides restrictions on capital policies, Vietnam is facing problems in the use of foreign talented people. This is considered a major barrier for Vietnam startup businesses to develop and grow regionally and internationally. However, the Government of Vietnam is having many changes, leading to the appearance of more and more investors, including foreign investors. Furthermore, the appearance of laws for venture capital funds will help startup environment in Vietnam becomes more ideal.