Policy initiative aids in fostering environmentally conscious growth for progressive businesses
New Decree to Boost Vietnam's Domestic Venture Capital
Starting from September 15, 2025, Decree No. 210/2025/NĐ-CP will regulate innovative start-up investment funds in Vietnam, fostering a wave of domestic venture capital and attracting more private capital flows.
These funds, established by at least 2 and no more than 30 investors, must adhere to a fund charter and are prohibited from investing in listed securities, bonds, or fund certificates on the stock market. Instead, they are allowed to invest in innovative small and medium-sized enterprises (SMEs), with the total investment not exceeding 50% of the enterprise's charter capital after investment.
Investment activities also include investing in convertible investment instruments recognised by the law for the first time and investing in rights to purchase shares in innovative SMEs, with the restriction that these rights cannot be transferred to third parties.
The funds can use a variety of capital contributions, including Vietnamese dong, land use rights, intellectual property rights, technology, technical know-how, and other assets that can be valued in Vietnamese dong. They are also permitted to use idle capital to make term deposits or buy deposit certificates at banks approved by competent authorities.
Cross-investment between innovative start-up investment funds is strictly prohibited. This regulation aims to preserve the nature of venture capital as supporting innovation, rather than operating for financial profit or speculation.
The decree standardises the organisational and operational model of innovative start-up investment funds, providing a formal and expanded investment framework. Funds can now own the right to purchase shares in start-ups and pre-negotiate the right to purchase new shares in the next rounds of capital calls of start-ups.
For the first time, the law recognises convertible investment instruments in innovative start-up investment. Before the decree, non-traditional investment models were not officially recognised by Vietnamese law. This modernization in Vietnam’s policies on innovative start-up investments reflects the official recognition of intellectual property and other intangible assets as valid capital contributions.
[1] Vietnam News Agency [2] Vietnam Investment Review [3] Vietnam Insider [4] Vietnam Plus
- The new decree, aiming to enhance Vietnam's domestic venture capital, also regulates the use of artificial intelligence (AI) and finance technology (fintech) in innovative start-up investment funds, opening up opportunities for AI and fintech businesses in supporting the growth of Vietnamese SMEs.
- With the increasing importance of law and technology in business, the law now recognizes convertible investment instruments in Vietnam, marking a significant change in the finance sector and paving the way for new business ventures.
- As the decree prohibits war-related activities for domestic venture capital funds, it underscores Vietnam's commitment to maintaining peace and stability while promoting economic growth through innovation and technology.
