Key Takeaways
- • Vietnam's Ministry of Science and Technology proposes a USD 100 million National Venture Capital Fund with initial capitalization during 2026–2028, targeting the critical gap between research commercialization and deep-tech start-up financing.
- • The Fund addresses a structural market failure: Vietnamese research outcomes remain uncommercialised due to insufficient financing mechanisms suited to venture capital's high-risk, portfolio-based, and long-cycle investment characteristics.
- • Governance framework will align with international best practices, including liability exemptions for fund managers and executives who comply with statutory procedures, and performance assessment over the entire investment cycle rather than individual deals.
- • The Ministry is concurrently studying establishment of a dedicated stock exchange for innovative start-ups to provide investors with transparent exit channels and improve capital ecosystem maturity.
- • Legal infrastructure already exists under the Law on Science, Technology and Innovation and Government Decree No. 264 (2025), but pilot mechanisms and national-level policies are required to operationalize venture capital investment at scale.
Summary
Vietnam's Ministry of Science and Technology has formally proposed the establishment of a National Venture Capital Fund capitalized at USD 100 million, representing a significant policy intervention to address structural deficiencies in the country's innovation financing ecosystem. The initiative targets a well-documented bottleneck: the substantial gap between research outputs and commercial market entry, wherein numerous research outcomes fail to reach marketable status due to inadequate financing tailored to deep-technology start-ups.
The proposed fund operates within an existing regulatory framework established by the Law on Science, Technology and Innovation and Government Decree No. 264 (2025), which authorizes venture capital mechanisms. However, the Ministry has identified the need for pilot programs and national-level policies to address venture capital's distinctive operational characteristics—notably its high-risk profile, portfolio-based management approach, and extended investment horizons. The Fund's performance will be evaluated across the entire long-term investment cycle rather than on individual investments, aligning with international institutional practice.
Governance design incorporates risk tolerance mechanisms consistent with global standards, including statutory liability exemptions for fund managers and executives who fully adhere to prescribed procedures. This structural safeguard addresses a common institutional barrier to government-backed venture capital participation. The State will assume a leading role in capital mobilization during the 2026–2028 period, establishing market foundations before private sector participation scales.
Complementing the Fund proposal, the Ministry is actively studying measures to develop the broader venture capital ecosystem, including the establishment of a dedicated stock exchange for innovative start-ups. Such a venue would furnish investors with transparent exit mechanisms—a critical infrastructure gap limiting institutional capital deployment in early-stage technology ventures. This multi-layered approach—combining direct capital provision, governance innovation, and secondary market development—reflects an integrated strategy to professionalize Vietnam's innovation finance landscape and enhance capital allocation efficiency in strategic technology sectors.
The proposed fund operates within an existing regulatory framework established by the Law on Science, Technology and Innovation and Government Decree No. 264 (2025), which authorizes venture capital mechanisms. However, the Ministry has identified the need for pilot programs and national-level policies to address venture capital's distinctive operational characteristics—notably its high-risk profile, portfolio-based management approach, and extended investment horizons. The Fund's performance will be evaluated across the entire long-term investment cycle rather than on individual investments, aligning with international institutional practice.
Governance design incorporates risk tolerance mechanisms consistent with global standards, including statutory liability exemptions for fund managers and executives who fully adhere to prescribed procedures. This structural safeguard addresses a common institutional barrier to government-backed venture capital participation. The State will assume a leading role in capital mobilization during the 2026–2028 period, establishing market foundations before private sector participation scales.
Complementing the Fund proposal, the Ministry is actively studying measures to develop the broader venture capital ecosystem, including the establishment of a dedicated stock exchange for innovative start-ups. Such a venue would furnish investors with transparent exit mechanisms—a critical infrastructure gap limiting institutional capital deployment in early-stage technology ventures. This multi-layered approach—combining direct capital provision, governance innovation, and secondary market development—reflects an integrated strategy to professionalize Vietnam's innovation finance landscape and enhance capital allocation efficiency in strategic technology sectors.
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