The startup situation in Vietnam is hopeful, but not currently well done. The thing is, Vietnam’s government has issued a decision which sets out a lot of steps towards creating a legal framework for startups that is welcoming and beneficial to the sought after tech companies. But the legal framework has yet to be put in place.
In a recent study conducted for a major international organization, we looked at some of the benefits suggested by this decision and the realities of the situation on the ground and found some major disparities.
While the government is eager to welcome startups, and the potential incomes, taxes, and innovations that come with them, they are slow to legislate the actual preferences and benefits for startups.
From tax legislation to land reform, the government is slow to move. Unlike in China, where the startup economy is booming, and the government is heavily subsidizing foreign entrepreneurs to set up shop in certain investment zones, Vietnam is still at the drawing board.
There are no tax schemes for startups. Regulations governing startups are kept in the small and medium enterprise legislation, nothing specific for startups. There is little in the way of IP protections, and in fact, the IP regime is such that it is often difficult for startups to protect their most important IP and still move forward with contribution of IP as capital for the valuation of the business.
A host of difficulties face the National Assembly and the government in preparing a fertile ground for startup investment. If Vietnam wants to be part of the ever growing startup community, it must move quickly to take advantage of its young and highly skilled workforce, its convenience to shipping and supply chains, and the other advantages that it has developed over the last several decades of economic reform.
That said, I hope you enjoyed your Tet holidays and that you have a prosperous and happy new year.