The National Assembly’s Committee on Science, Technology, and Environment is requesting relevant agencies to contribute opinions on the draft Law on Science, Technology, and Innovation.

In its feedback on this draft, the Vietnam Chamber of Commerce and Industry (VCCI) stated that regarding the controlled testing mechanism (sandbox) and the Innovation Hub model, the draft law has stipulated the controlled testing mechanism for new business models, products, and services. This provision is highly anticipated by the business community.

However, in reality, there is a situation where the law does not explicitly prohibit but it is also unclear whether current laws can be applied to implement certain business models. In such cases, what businesses need is a clear confirmation mechanism from competent authorities, so that they can operate with confidence and facilitate fundraising. There are also cases where new business models face many difficulties in administrative procedures.

VCCI Proposes Adding Regulations on the Innovation Hub Model Alongside the Sandbox Mechanism in the Draft Law on Science, Technology, and Innovation

Globally, alongside the sandbox mechanism, many countries also operate the Innovation Hub model. This model serves as a central contact point for providing support, consultation, and guidance to businesses—whether they are already regulated by law or not—to help them better understand relevant legal provisions and policies. This mechanism offers multiple advantages, such as cost savings (for both regulators and businesses), ease of implementation, and low time and financial investment requirements.

According to a 2019 study conducted by the World Bank and the Cambridge Centre for Alternative Finance, the number of businesses receiving support through Innovation Hubs was 12 times higher than those under the sandbox mechanism. In Singapore, the Monetary Authority of Singapore (MAS) provided legal guidance to nearly 140 companies related to the sandbox framework, helping 75% of them either withdraw their applications or proceed without needing to go through the sandbox.

Therefore, VCCI recommends that the draft law include provisions for the Innovation Hub model alongside the sandbox mechanism. It suggests that both mechanisms could be integrated under a single focal point. In cases where businesses only require guidance under existing regulations, state agencies could issue written responses to provide clarification.

The current draft lacks clarity on the structure of the sandbox mechanism. Specifically, it is unclear whether this mechanism will apply uniformly to all new products and business models, or whether each sector will issue its own sandbox framework. Article 22.3 of the draft delegates the Government to define specific contents, conditions, and responsible authorities.

"If each sector issues its own separate regulations, it could create difficulties for businesses—especially in emerging sectors that overlap multiple industries. Therefore, we propose clarifying the law to ensure the sandbox mechanism is applied across multiple sectors and operates under a ‘one-stop-shop’ Government model, similar to what Japan is currently implementing," VCCI recommends.