A start-up business shows its products at the Da Nang Start-up and Innovation festival in the central city. — VNS Photo Cong Thanh

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.

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 yesterday

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 Viet Nam,” Lich said.

“Legal framework was often first priority for businesses, but start-up raised from innovation and initiative idea don’t do this.

“Business start-up ideas should be free to develop and flourish with new ideas, while a suitable framework will be then built and adjusted,” he said.

Nguyen Hoa Binh, chairman of Next Tech Group, an investor on the TV show Shark Tank Viet Nam, said Viet Nam 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.

“For example, customers could use online service to replace paperwork for a transaction at a bank, and information technology allows that procedure to save time and cost for both customers and banks.

“A sandbox pilot policy for start-up business could be a proper solution as policy makers still hesitate over cyber security for online banking transaction.

“Digital payment, which was introduced as a pilot project in 2008, is seen as the most successful solution when 30 businesses were allowed to operate digitally.”

Vice Minister of Industry and Trade, Tran Thanh Tung, who is a mastermind of the national business start-up project in Viet Nam, 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 Viet Nam, 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 Viet Nam, 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 Viet Nam 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 Da Nang.

She said the MoU included Master Education programme, education exchanges among Da Nang’s Economics College and Irish universities and humanitarian programmes supporting the disabled.

Dr. Catherine Phuong from UNDP, said the private sector was an important factor for sustainable development under the UNDP’s Sustainable Development Goals (SDG) in 2030.

She said start-up business idea promotion was still a challenge and a youth collaboration was established in Viet Nam two years ago to support young start-up businesses.

She said start-up businesses not only focused on profit, but also social responsibility.

Phuong said both the UNDP and the ministry of planning and investment had been building a new policy for social impact businesses and young social entrepreneurship.

Da Nang was seen as the first city in Viet Nam to begin its start-up and entrepreneurship development by offering the start-up ecosystem, policies and investment support activities from 2014.

Vice chairman of the city’s 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 yesterday.

The fund will provide fund for innovation and business initiatives in the city and central Viet Nam.

Da Nang has 18,000 businesses, 95 per cent 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 per cent of businesses will successfully call fund from investors, in 2020. — VNS