Legal Framework for Venture Capital: A Breakthrough to Boost the Innovation Ecosystem

The Government has just issued Decree No. 264/2025/ND-CP regulating the National Venture Capital Fund and local venture capital funds. This is considered a breakthrough step in perfecting the legal framework, creating a foundation to promote venture investment activities for innovative startups.

In order to exchange and discuss mechanisms, policies and international experiences in promoting venture capital for innovative startups, the Department of Startups and Technology Enterprises ( Ministry of Science and Technology ) organized a workshop on "Model and mechanism of operating venture capital funds using state budget: International experience and applicability in Vietnam". The workshop was organized to implement Decree No. 264/2025/ND-CP of the Government issued on October 14, 2025.

Perfecting institutions, promoting domestic venture capital

Speaking at the workshop, Deputy Minister of Science and Technology Hoang Minh emphasized that the issuance of the Decree demonstrates the Government's determination to promote the development of science , technology and innovation. In particular, the State proactively invests and accepts risks to accompany businesses, support research activities, technology development and product commercialization.

Deputy Minister of Science and Technology Hoang Minh speaks.

According to Mr. Pham Hong Quat, Director of the Department of Startups and Technology Enterprises, Decree 264/2025/ND-CP marks a qualitative change in the public investment mechanism for innovative startups. The development of the Decree involved leading experts and investment fund representatives, demonstrating an integrated and practical mindset. This is a multi-dimensional model, directly serving the national startup ecosystem in the coming period.

Mr. Pham Hong Quat spoke at the workshop.

The Decree specifically regulates the establishment, organizational structure, management and use of capital of venture capital funds, clearly defines the proportion of state budget capital, the supervision mechanism and the rights and obligations of participating entities, in accordance with the provisions of the Law on Science, Technology and Innovation.

According to experts, the issuance of this Decree fills a long-standing legal gap in Vietnam's venture capital market, opening up opportunities to attract socialized capital flows, creating a more transparent and dynamic investment environment for innovative start-up businesses.

One of the important highlights is to encourage the private sector to participate in venture capital. Enterprises are allowed to contribute capital to funds using state budget capital, in accordance with their development strategies. This mechanism helps to closely link the public and private sectors, operate capital sources flexibly and effectively, gradually reduce dependence on the state budget and promote a culture of innovation in the business community.

In addition, Decree 264/2025/ND-CP also aims at digital transformation in venture capital by building a digital connection platform between startups - investment funds - experts - startup support organizations. This network helps increase transparency, shorten the investment process, especially supporting potential projects in localities where startup activities are limited in infrastructure and opportunities to access investors.

Overview of the Workshop.

International experience and suggestions for Vietnam

At the workshop, experts shared valuable experiences from countries that have strongly developed state-owned venture capital fund models.

Mr. Pham Tuan Hiep (BK Holdings) said that the Vietnamese venture capital market, after a period of stagnation, needs a policy "push" to kick-start and develop sustainably. There are currently about 4,000 startups, mainly in the field of information technology, while startups in core technology (deep-tech, high-tech) such as new materials, energy, and semiconductors are still very few. The leading role of the State is a key factor, especially through the National Venture Capital Fund, which acts as a bridge to promote capital flows and encourage the private sector to participate.

Mr. Bui Thanh Do, Founder and Chairman of ThinkZone Ventures, said that building a venture capital fund model in the spirit of Decree 264 requires learning from the experiences of Korea, Singapore, China and Israel, countries that have successfully combined state and private capital. In Korea, the "Fund of Funds" model has mobilized more than 31 billion USD in investment capital, while Singapore applies a flexible co-investment mechanism, ensuring market nature while still maintaining the state's strategic orientation.

From a Japanese perspective, Mr. Ogata Ryosuke, General Director of MRIV International, Mitsubishi Research Institute in Vietnam, said that Japan's National Public-Private Investment Fund model has proven effective in promoting innovation. With the participation of the Government and more than 25 large corporations such as Mitsubishi, Toyota, Sony, Hitachi, etc., the fund has become a driving force to open up private capital flows and form new high-tech industries.

Decree 264/2025/ND-CP is a step to concretize the Government's policy on promoting venture capital associated with the goal of developing a national innovation ecosystem. The national venture capital fund will be granted a minimum of VND500 billion in initial charter capital, aiming for a scale of VND2,000 billion in 5 years, while mobilizing additional social and private sector resources.

Allowing funds to hire professional management units, applying flexible risk management mechanisms and exempting liability in cases of objective risks are considered progressive points, helping to increase initiative and professionalism in investment activities.

Experts assess that the Decree will be a turning point in the development of venture capital in Vietnam, creating strategic financial resources for innovative enterprises, promoting the transition to a knowledge-based economy, improving national competitiveness and adaptability to global fluctuations.

Center for Science and Technology Communication

Source: https://mst.gov.vn/khung-phap-ly-cho-dau-tu-mao-hiem-buoc-dot-pha-thuc-day-he-sinh-thai-khoi-sang-tao-197251022192042865.htm