Start-ups will be given support from the State budget in localities with no more than 30 per cent of total investment mobilised from investment funds.

This is one of the regulations stipulated in the Decree 38/2018/ND-CP on investment for small-and-medium start-ups and innovative firms, which took effect on March 11, 2018.

Start-up projects receiving investment from State financial institutions should meet the requirements of doing business in the sectors in which the localities prioritise development. In addition, they must be chosen by at least one investment fund for receiving capital.

The maximum time for investing in a start-up is five years. After the period, State financial institutions in localities could transfer shares and contribute capital to private investors.

Based on State budget conditions, the provincial People’s Committee would ask the People’s Council to assign their local financial institutions to invest in start-ups.

Local financial institutions would choose start-up investment funds, which have at least one year of experience in the activities.

Annually, local institutions will conduct evaluation, adjustment and announcement of the list of chosen start-up investment funds on their websites.

The decree provides detailed regulations on investment for start-ups. The start-up investment fund does not have legal status. It can receive capital contribution by a maximum of 30 investors.

Capital contributions could be in Vietnamese dong, gold, land use right and other assets, which could be valued in Vietnamese dong. Investors are not allowed to use loans to contribute to the fund.

The fund could deposit their money at commercial banks and invest less than a half of their charter capital after receiving investment. All the capital contributions and assets of investors must be independently audited by fund management companies.

Investors could establish and hire a company to manage the fund.

Nguyen Duc Khuong, professor of finance and deputy director for research at France-based IPAG Business School, said that start-up activities had recently got attention from the Government, investors and people.

According to a survey conducted by Amway Group, in co-operation with Technische Universitat Munchen and Gfk Company, Viet Nam took the first position in the Amway Entrepreneurial Spirit Index.

Viet Nam has advantages in development of information, communication and technology, tourism, agriculture, banking and finance. However, the issue was that some start-ups have good products but lack of commercial skills. Especially, the start-up ecosystem in the country has not been completed and there is lack of co-operation with universities and big groups.

Khuong said Viet Nam should establish a start-up ecosystem in which the Government holds the role of a co-ordinator.

Young people should be given education and training, especially start-up skills. Start-ups should have a big vision and be ready to take a risk when starting a business, he added. — VNS