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Investment
Aug 23, 2017 / 09:31

Lack of legal framework for start-ups

Ngoc Thuy - Khac Kien

Currently, there are many supports for start-ups such as start-up incubator, co-working space, etc. However, in reality, a legal framework for start-ups is needed for them to be flourish.

New kinds of start-ups have not been updated

According to experts, legal framework for start-ups in Vietnam is still new with a lot of challenges. According to the Chairman of VIET Management Group Trinh Minh Giang, it is time to officialize and promote the star-up fund, so that not only the startup community in Vietnam, but also in other countries to look at and get necessary assistance. In reality, there are enterprises both being a start-ups and investor in start-ups. In the category of business registration, this kind of enterprise has not been updated yet. Bearing this in mind, Mr. Giang proposed the government to develop a decree this year, so that start-ups can support enterprise in the process of startup. 
 
Vietnamese enterprise introduces products to customer at the Industrial trade fair 2017.
Vietnamese enterprise introduces products to customer at the Industrial trade fair 2017.
On the other hand, talking about supporting capital for start-ups, CEO of Moca (an online payment application) Tran Thanh Nam said, in this aspect, despite enterprises can investment via loan or convertible bond, but in Vietnam, start-ups are not allowed to issue bond. It is therefore enterprises have to find way around the law. When signing a contract, in accordance to international practice, enterprise must refer to the available capital, but currently many start-ups include the lending amount in these contracts. “If start-ups develop well in the first 3 years, the government should have policies to support them with regard to the capital, so that enterprises can continue develop. As such start-ups will have resources to develop with low cost, in turn overcome the shortage in labor market” – Nam suggested. Besides, the government should also develop investment channel for start-ups, which focus on the stock market. With this being said, it is necessary to have a stock market for start-ups, in which they can directly mobilize capital from society.

Supporting creative start-ups

Chairman of board of directors and General Director of CMC Technology Group Nguyen Trung Chinh said, government should encourage the development of creative start-ups through the establishment of policy supporting capital for this kind of enterprise. Besides, it is worth mentioning to develop policies to call for investment and create environment for startup ecosystem to flourish. As such, start –ups will get maximum assistance for any arising problems during operation.

“The government should consider piloting the supporting model for creative start-ups in Hanoi and Ho Chi Minh” – Mr. Chinh proposed. In addition, this model should be developed based on ISO standard. The government also need to put up effort in review law and regulation, removing obstacles for enterprises, especially private enterprises, avoiding unfair competition and the issuance of sub-licenses, “ask - give” mechanism, which in turn causing difficulties for enterprises in general and start-ups in particular. 

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