Ho Chi Minh City wants to add a maximum of VND 1,800 billion from the budget to the City Venture Capital Fund, supporting creative startups, technology incubation and digital transformation.

The content was sent by the Ho Chi Minh City People's Committee to the City People's Council for consideration and approval at the thematic meeting on October 29-30. Contributed capital from the budget is expected to be a maximum of 200 billion VND per year for 9 years, depending on the ability to balance the budget and the capital increase plan approved by the enterprise.

Ho Chi Minh City Venture Capital Fund operates under the model of a joint stock company, approved by the City People's Committee for its establishment in March and launched on the afternoon of April 17.

The fund has an initial charter capital of 500 billion VND, of which private capital is 300 billion VND, accounting for 60%; State capital is 200 billion VND.

According to the project, the city aims to increase the total charter capital of the fund to at least VND 5,000 billion by 2035, including VND 2,000 billion in state capital and VND 3,000 billion in private capital, or a higher proportion of private capital.

The additional capital contribution mechanism is designed to mobilize private resources first, then the state budget participates in response. According to the project, the maximum additional state capital is 200 billion VND per year, equivalent to 40% of the increased capital; The private sector is expected to contribute 60%. If private capital mobilized is lower than planned, the state capital will be calculated according to the actual proportion.

The City People's Committee believes that innovative startups still have difficulty accessing venture capital, especially in the early stages. The fund is expected to create controlled risk-taking capital, attract social investment in high-tech enterprises, science and technology enterprises, and promote commercialization of research products.

Additional capital is expected to be allocated from the city budget for science, technology and innovation. The City People's Committee will organize capital contributions according to the approved charter level and the company's capital increase plan; The City People's Council supervises the implementation process.

According to the city government, venture capital has a long payback period and evaluation of results, usually 7-10 years, so it requires a financial mechanism with a long-term vision.

At the opening session on the morning of October 29, in the verification report, Mr. Nguyen Cong Danh, Head of the Economic and Budget Committee, Ho Chi Minh City People's Council, said that the City People's Committee's proposal is appropriate in the current context. Policies help support science and technology startups in accessing capital, especially in the early stages, helping startups have the potential to grow.

Le Tuyet