Startups in Ho Chi Minh City stand to obtain backing of up to 400 million VND

This announcement was made by Ms. Phan Thi Quy Truc, Deputy Head of the Department of Technology and Technology Market Management at the Department of Science and Technology in Ho Chi Minh City. She delivered this information during a consultation conference held on August 15th to discuss tailored support policies for innovative startup initiatives. The conference took place as part of the city's efforts to implement the science and technology industry support policies outlined in Resolution 98, recently approved by the National Assembly.

According to Ms. Truc, the initial pre-incubation phase will offer a maximum support of 40 million VND per project, spanning a duration of 6 months. During the incubation phase, which involves product development and business model refinement, the support caps at 80 million VND per project for a 12-month period. The acceleration phase, targeting businesses that have developed a product and garnered customers, can secure up to 400 million VND of support over a 12-month span.

The non-repayable support will be granted to startups exhibiting creativity, technology integration, organizational capability, positive social impact, and promising market potential.

The support amount will cover expenses related to project implementation, including remuneration for project participants, the cost of project selection, expert consultation fees, and field services. This support allocation is intended for both startup enterprises and support centers/intermediary organizations. Ms. Truc clarified that the funds will be transferred to startup incubators for management and implementation rather than being directly disbursed to startup entities.

In addition to the non-repayable support policy, Ho Chi Minh City plans to grant a five-year exemption from personal and corporate income tax for innovative startups and support centers, in alignment with Resolution 98.

To be qualified for corporate income tax exemption, startup projects, and support organizations must possess a certificate issued by the Department of Science and Technology. Innovative enterprise certification requires meeting criteria such as intellectual property patents, competition awards, and the application of new technologies or business models. Support organizations are expected to provide equipment to aid technology enhancement, offer capacity-building training, furnish co-working spaces, and demonstrate prowess in commercialization and technology transfer. Enterprises and organizations focused on creativity must generate at least 30% of their total revenue from creative startup activities.

Mr. Nguyen Viet Dung, Director of the Ho Chi Minh City Department of Science and Technology, indicated that while the tax exemption policy is awaiting government decree guidance, the non-repayable support policy can be promptly enacted. Nevertheless, due to the substantial 400 million VND support package, a project evaluation council is deemed necessary before disbursement.

Mr. Dang Duc Thanh, Chairman of the VEC Economists Club, highly praised HCMC's support initiative for stimulating innovative startups. He underscored the importance of developing clear and comprehensive standards for each support group to expedite effective implementation. Simplified administrative procedures are crucial to providing optimal conditions for inherently risky startup ventures.

Ms. Nguyen Thi Dieu Hang, Director of the Youth Startup Support Center under the Ho Chi Minh City Youth Union, lauded the preferential policies as strong incentives for startups. However, she emphasized that beneficiaries must exhibit outstanding products with quantifiable outcomes that align with the city's support criteria.

Resolution 98, ratified by the National Assembly on June 24, grants Ho Chi Minh City specific mechanisms and policies across various domains including infrastructure investment, budget finance, construction and planning, housing attraction, and strategic investment organization. Under this resolution, the city is empowered to devise its own mechanisms and preferential policies, prioritizing the attraction of strategic investors in fields such as chip manufacturing, semiconductor integrated circuits, and new materials. The resolution also introduces a tax exemption policy for personal and corporate income generated from the transfer of contributed capital and the rights to contribute capital to innovative startups.