Key Takeaways
- • Foreign capital dominance is driving Vietnamese startups to establish overseas holding companies, reducing tax revenue capture and risking loss of intellectual assets to Vietnam's economy, according to Bui Thanh Do, Founder and CEO of ThinkZone Ventures.
- • Ho Chi Minh City and Hanoi launched local venture funds totaling VND730 billion ($28 million combined) in April 2026, with HCM's fund at VND500 billion ($19 million) and Hanoi's at VND230 billion, providing operational models for a proposed national-level venture capital fund.
- • ThinkZone Ventures proposes a fund-of-funds model where the state acts as catalytic capital rather than directly selecting startups, transferring commercial investment decisions to professional private fund managers—mirroring successful approaches in Singapore and Kazakhstan.
- • Technology investment requires 10–15 years to demonstrate value and carries elevated risk, necessitating portfolio-level performance evaluation rather than individual deal scrutiny, according to ThinkZone's governance recommendations.
- • Clear tax incentive implementation guidance is critical, including standardized procedures for certifying innovative startups and share transfer declarations required for investor tax exemptions.
Summary
Vietnam's venture capital market faces a structural imbalance that is prompting domestic startups to relocate their holding companies overseas to secure foreign funding more efficiently. This trend threatens Vietnam's fiscal position and intellectual property base, according to Bui Thanh Do, Founder and CEO of ThinkZone Ventures, who presented his analysis at a national venture capital fund consultation event on Monday, June 16, 2026.
The underlying problem stems from foreign capital's dominance in Vietnam's startup financing ecosystem. Rather than access sufficient domestic capital sources, Vietnamese startups are establishing overseas entities to streamline their ability to receive international funding. This structural gap creates dual disadvantages: Vietnam loses tax revenue from these enterprises and risks ceding ownership of high-value technology assets developed within the country.
In response, Ho Chi Minh City and Hanoi have taken initial steps to build domestic capital capacity. In April 2026, the two cities established local venture funds with combined capitalization of VND730 billion (approximately $28 million). Ho Chi Minh City's fund was capitalized at VND500 billion ($19 million), while Hanoi's reached VND230 billion. Do indicated that these local funds can provide practical operational data to inform the design and governance of a national-level venture capital fund.
ThinkZone Ventures has outlined three core strategic directions for the proposed national fund. First, the state should assume a catalytic role, leading market development rather than directly allocating capital to individual startups. The fund should prioritize a fund-of-funds model or co-investment structures with private sector managers, delegating commercial investment decisions to professional fund managers—an approach successfully deployed in Singapore and Kazakhstan. Second, given that technology investments typically require 10 to 15 years to mature and inherently carry high risk, the fund's governance framework should evaluate performance across the entire portfolio cycle rather than imposing short-term capital preservation constraints on individual investments. Third, the national fund requires clear implementation protocols for tax incentives, including standardized procedures for certifying innovative startups and share transfer declarations necessary for investors to claim tax exemptions.
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The underlying problem stems from foreign capital's dominance in Vietnam's startup financing ecosystem. Rather than access sufficient domestic capital sources, Vietnamese startups are establishing overseas entities to streamline their ability to receive international funding. This structural gap creates dual disadvantages: Vietnam loses tax revenue from these enterprises and risks ceding ownership of high-value technology assets developed within the country.
In response, Ho Chi Minh City and Hanoi have taken initial steps to build domestic capital capacity. In April 2026, the two cities established local venture funds with combined capitalization of VND730 billion (approximately $28 million). Ho Chi Minh City's fund was capitalized at VND500 billion ($19 million), while Hanoi's reached VND230 billion. Do indicated that these local funds can provide practical operational data to inform the design and governance of a national-level venture capital fund.
ThinkZone Ventures has outlined three core strategic directions for the proposed national fund. First, the state should assume a catalytic role, leading market development rather than directly allocating capital to individual startups. The fund should prioritize a fund-of-funds model or co-investment structures with private sector managers, delegating commercial investment decisions to professional fund managers—an approach successfully deployed in Singapore and Kazakhstan. Second, given that technology investments typically require 10 to 15 years to mature and inherently carry high risk, the fund's governance framework should evaluate performance across the entire portfolio cycle rather than imposing short-term capital preservation constraints on individual investments. Third, the national fund requires clear implementation protocols for tax incentives, including standardized procedures for certifying innovative startups and share transfer declarations necessary for investors to claim tax exemptions.
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