Building the correct legal framework is one of the major challenges holding back start-up businesses and now the Government is looking at easing red-tape and giving an easier ride to both young companies and the private sector.

A start-up business shows its products at the Da Nang Start-up and Innovation festival in the central city 

That was the message from Dr. Tran Du Lich, a member of the Prime Minister’s advisory team, speaking at the Da Nang Start-up Innovation Festival on November 1.

He said state-owned companies had a head start over new start-ups because they already had good legal framework in place. This is blocking start-up development in Vietnam, Lich said, adding legal framework was often first priority for businesses, but start-up raised from innovation and initiative idea don’t do this.

Nguyen Hoa Binh, chairman of Next Tech Group, an investor on the TV show Shark Tank Vietnam, said Vietnam needed to establish a ‘sandbox’ policy to support start-up business – a model that had not been existed in the past decades.

It cannot create innovation if we apply traditional legal framework or business model for start-up business, Binh said.

Deputy Minister of Industry and Trade Tran Thanh Tung, who is a mastermind of the national business start-up project in Vietnam, said a new policy would be needed to create the best conditions for both domestic and foreign business start-up projects. But he did warn the policy could ensure profit transferring for foreign businesses which may be seen as money laundering.

Ambassador of Israel to Vietnam Nadav Eshcar added that a start-up ecosystem and innovation authority were built to support new ideas and initiatives.

Deputy head of mission of Ireland to Vietnam Elisa Cavacece said it committed to continue co-operation with Da Nang City in start-up support. She said the city and the Ireland Embassy in Vietnam had agreed a Memorandum of Understanding (MoU) on high quality human resource education, management skills for the city’s personnel and start-up programme for students in the city.

Dr. Catherine Phuong from the UNDP, said the private sector was an important factor for sustainable development under the UNDP’s Sustainable Development Goals (SDG) in 2030, adding start-up business idea promotion was still a challenge and a youth collaboration was established in Vietnam two years ago to support young start-up businesses.

Vice Chairman of the municipal People’s Committee Le Trung Chinh said Da Nang had been planned as a national centre of business start-up and a rendezvous of global enterprises.

The city also debuted its first Da Nang start-up venture Fund with the joint fund-raising from business groups at the festival. The fund will provide fund for innovation and business initiatives in the city and central Vietnam.

Da Nang has 18,000 businesses, 95 percent of which are small- and medium-sized enterprises. The city plans to support 200 projects and 80 start-up businesses, in which at least 20 percent of businesses will successfully call fund from investors, in 2020.