Readers can refer to the full text of Decree 264/2025/ND-CP here.
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As one of the units actively contributing to the Decree, ThinkZone is pleased to share this information with the startup and VC investment community in Vietnam. In this article, ThinkZone will analyze the great significance of this Decree.
1. Drastic change in investment thinking & risk control of the State
First, the term "venture capital" in Vietnamese is often translated as "venture investment", to show that VC investment is a highly risky form of investment - "risk-taking". Previously, this phrase was often associated with negative risks, especially from an investment perspective related to state capital. However, the official use of the phrase "National Venture Capital Fund" in legal documents has shown a major change in the Government's operating thinking: from the principle of "capital preservation" to "operating according to market principles, accepting controlled risks" (Clause 2, Article 5).
In particular, the Decree also clearly defines: "The total loss arising from investment activities using charter capital in the overall investment portfolio and in an investment cycle is specifically determined in the investment strategy or investment plan and does not exceed the risk threshold of 50% of the fund's charter capital" (Clause 4, Article 10). This number demonstrates the Government's great openness in accepting risks when investing in an area that has high risk, requires patience, and has great socio-economic development value, such as technology startups.
2. The national venture capital fund is designed according to market principles, prioritizing technology investment
National and local venture capital funds are established and operate like businesses, according to market principles.
Clause 3, Article 5 of the Decree also clearly states: "Prioritize investment in businesses and innovative startup projects with high growth potential in the fields of high technology, digital technology, strategic technology, technology that encourages transfer, green economy, circular economy, sustainable development, creating a positive impact on the local and national economy, society and environment."
The VC investment industry in Vietnam always faces a "dilemma", where deep technology businesses often face limitations in their ability to generate revenue, and conversely, business models that are easy to generate revenue often lack breakthrough technology elements. With limited capital, VCs in Vietnam often find it difficult to "raise" startups with limited revenue generation ability, leading to startups in the high-tech group often being "picky" about investors and lacking capital.
However, with capital from national and local venture capital funds, "patient" capital and technology priorities will be added, expected to somewhat narrow the supply and large capital demand of high-tech startups.
3. Design public-private partnership
Regarding capital sources, in addition to 500 billion VND of State capital, the National Venture Capital Fund sets a target of a minimum Fund size of 2,000 billion VND within the first 5 years, based on state capital and mobilization from organizations and individuals. This mechanism creates conditions for private businesses and individuals to invest in the Fund, both contributing capital and demonstrating their commitment to supporting startups.
Regarding administration, the fund established under Decree 264/2025/ND-CP can hire professional management units (including foreign organizations), operate according to market mechanisms with a compact, transparent apparatus, avoiding bureaucracy.
Regarding investment, the fund can invest directly in startups or invest in other VC investment funds. This is a mechanism that shows that the National Venture Capital Fund is willing to cooperate and entrust investment to professional fund management companies in Vietnam, taking advantage of the expertise and experience of the private fund management team to jointly invest in technology startups.
4. Deploy nationwide, not just as a pilot
From the beginning, the Decree established a parallel model between national and local venture capital funds, creating a nationwide venture capital architecture, knowledge sharing, governance framework, and appropriate scale for each locality — not stopping at a limited “pilot” model.
This shows the Government's determination to popularize venture capital activities, and thereby innovative startups, to localities across the country.
5. Vietnam adds domestic capital to maintain startup growth momentum, reducing dependence on foreign VC capital
By building the National Venture Capital Fund model, Vietnam is one step closer to catching up with the public-private venture fund model that neighboring countries such as Singapore, Malaysia, and Indonesia have applied. The birth of the National Fund is also a "flag" calling for more domestic investors to invest in Vietnamese technology startups, increasing the scale of domestic investment capital.
With the participation of corporate funds, professional managers, and co-investment/fund-of-funds investment models, Vietnam now has a "public-private venture capital mechanism" similar to the region - helping to strengthen domestic startup investment resources, limit dependence on foreign capital, maintain momentum for domestic venture capital activities, and avoid "funding winter shocks" when foreign investors withdraw capital whenever the economic situation changes. difficult movement.
SUMMARY
The introduction of Decree 264/2025/ND-CP marks a major change in the way of viewing and using State capital in investment activities, accepting more risky and patient investments, with the expectation of bringing Vietnam's science and technology industry to develop strongly in the future.
From the Decree until the national and local Venture Capital Funds actually come into operation, there are still many things that need to be done, including finding a management unit, raising capital for the fund, etc. However, this is the first step with positive signs from the Government's approach, let's follow it further!