Ho Chi Minh City

1,920 startup companies established in Ho Chi Minh City

At a meeting between the Ho Chi Minh City People’s Council's Economics and Budget Committee and HCMC Enterprise Association on startup ecosystem development yesterday, a representative from the Department of Science and Technology, announced 1,920 startup companies have been established in the city so far.

1,920 startup companies established in Ho Chi Minh City

Of 1,920 startup companies, more than 70 percent are in IT field and the remaining in high-tech agriculture and other fields.
The Department of Science and Technology has launched four startup support packages. One is for consultation and training with maximum expenditure of VND200 million (US$8,590 ) per project. The second is for connection and the third one is for startup project incubation not exceeding VND500 million per project. The fourth package is for startup project acceleration.
So far, the city has given VND23 billion to support 40 startup companies. Additionally, a private investment fund has poured money into 21 startup projects.
Most of startup companies decided to invest in niche market to avoid competition. Presently, startup companies have been attractive for investors and private investment funds which agreed to pour money into startup companies.
However, on the other hand, General Secretary of the HCMC Enterprise Association Nguyen Ho Thien Nhan said many startup projects are copied from their foreign peers; therefore, there has been no breakthrough in the startup projects. Sponsors for startup companies complained of complex administrative procedures.
To make startup ecosystem more effective, the city needs to have financial mechanisms to attract capital in a bid to help startup companies grow more. Moreover, legal environment must be less complicated for establishment of investment fund. The most important factor is launching venture capital funds simultaneously with private venture capital funds.
Regarding tariff policies, startup companies are exempt from paying tax within 3 to 5 years.
Last but not least, activities such as commercial promotion, market connection, investment in new technologies must be organized to facilitate enterprise operation.
Furthermore, the city should re-orientate startup field which must link with IT, high valued industries and cultural and creative industries because these are potential with fast growth.
An effective startup project can satisfy three criteria including offering employment, creating value for society and sustainable development.
A representative from the People’s Council's Economics and Budget Committee emphasized that there are a lot of startup support package. The Committee listened to opinions about difficulties and then make petition to city authorities to have assistance.
Besides, the HCMC Enterprise Association should have detailed assessment of support policies and propose support solutions for each difficulty they are facing so that city government can adopt more effective support policies to push up growth of enterprises generally and startup companies particularly.

By Ai Van - Translated by Uyen Phuong

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