Vietnam’s Thriving Startup Ecosystem: A Framework of Support
Over the past decade, Vietnam has aimed to cultivate a robust startup ecosystem, recognizing the need to diversify its economy beyond traditional manufacturing sectors. This ambition has sparked numerous policies and initiatives aimed at encouraging entrepreneurship, leading to a remarkable growth trajectory even during challenging times like the COVID-19 pandemic.
In 2021, Vietnam’s startup sector received more than $1.4 billion in funding, a substantial four-fold increase from 2020. This surge comes from a mix of local and international investors and spans sectors like fintech, real estate, and gaming.
The funding influx has bolstered notable companies such as Sky Mavis and VNPay. Sky Mavis, known for its gaming innovations, secured $152 million in Series B funding, while VNPay received an impressive $300 million in 2020. The total number of investment projects has also skyrocketed, from just 17 in 2014 to a stunning 173 in 2021.
Key Policies Fueling Vietnam’s Startup Boom
Vietnam’s proactive approach in nurturing its startup ecosystem can be boiled down to several pivotal policies and initiatives. Here’s a closer look:
1. Assistance Policies for the National Innovative Startup Ecosystem
Enacted through Decision No. 844/QD-TTg, this framework aims to set up a comprehensive national startup ecosystem by providing $42 million to support 800 startup projects. The goal is to achieve 2,000 startup projects and 100 venture-capital-backed startups by 2025.
2. Establishment of a National Innovation Center
Under Decision No. 1269/QD-TTg from October 2019, Vietnam established the National Innovation Center (NIC) to foster innovation by collaborating with global tech leaders like Amazon and Google. This initiative focuses on nurturing young enterprises through training and resources.
3. Support for Female Entrepreneurship
Through Decision 939/QD-TTg, Vietnam is actively encouraging female entrepreneurship, aiming to assist 20,000 women in starting businesses and establish 100,000 new women-owned enterprises by 2025.
4. Encouragement of Student Entrepreneurship
Using Decision 1665/QD-TTg, the government has laid out plans to support student entrepreneurs through training programs, media coverage, and an entrepreneurial fund to encourage youth participation in startups.
5. Science, Technology, and Innovation Strategy
The Decision 569/QD-TTg, issued in May 2022, aims to invest between 1.5 to 2 percent of GDP in science and technology by 2030. This significant focus on R&D underscores Vietnam’s commitment to technological advancement.
6. National Innovation Startup Portal
The Decision 3084/QD-BKHCN led to the creation of the National Innovation Startup Portal (NISP). Serving as a digital repository, the NISP provides vital information on policies, investment options, and resources for startups in Vietnam.
7. Financial Regulations for Scientific and Technological Activities
Instated by Decree 95/2014/ND-CP, this regulation outlines tax incentives for scientific research funding, investment credits from the Vietnam Development Bank, and priority leasing options for industrial parks.
8. Business Innovation Survey
With Decision 976/QD-BKHCN, an innovation survey is set to gather data on Vietnam’s startup environment, helping to develop more tailored policies in the future.
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Vietnam Briefing is published by Asia Briefing, a subsidiary of Dezan Shira & Associates, providing insights to foreign investors across Asia.