Decree No. 264/2025/NĐ-CP on the National Venture Capital Fund and local venture capital funds

DECREE

Regulations on the National Venture Capital Fund and local venture capital funds

Pursuant to the Law on Government Organization No. 63/2025/QH15;

BASED ON THE LAW ON SCIENCE AND TECHNOLOGY AND INNOVATION NUMBER 93/2025/QH15;

Pursuant to the Enterprise Law No. 59/2020/QH14 amended and supplemented by Law No. 03/2022/QH15 and Law No. 76/2025/QH15;

Pursuant to the Law on State Capital Management and Investment in Enterprises No. 68/2025/QH15;

Pursuant to the proposal of the Minister of Science and Technology;

The Government issues this Decree to regulate the National Venture Capital Fund and local venture capital funds.

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation

This Decree stipulates the establishment, organizational structure, operation, management, proportion of state budget capital, use of capital, supervisory mechanisms for the National Venture Capital Fund, local venture capital funds, and other contents prescribed in Article 40 of the Law on Science, Technology, and Innovation.

Article 2. Applicability

This Decree applies to:

1. The National Venture Capital Fund.

2. Local venture capital funds.

3. Organizations and individuals investing in the National Venture Capital Fund, local venture capital funds.

4. Relevant agencies, organizations, and individuals.

Article 3. Explanation of Terms

In this Decree, the following terms are understood as follows:

1. Venture investment is an investment activity through contributing capital to establish, purchase shares, or equity stakes in innovative start-up enterprises or to establish and contribute capital to venture capital funds, start-up investment funds.

2. The investment strategy of the fund is a set of directions, principles, and criteria established by the fund to select, implement, and manage investments in innovative start-up enterprises or other investment targets consistent with the fund's objectives, including defining the scope of industries, stages of enterprise development, investment areas, shareholding ratios, risk tolerance levels, expected returns, investment methods, and exit methods.

3. The charter of the fund is the company charter under the Enterprise Law that regulates all activities of the fund, establishing the rights and obligations of investors, the fund's management and operational machinery, and related parties during the process of raising, managing, and using venture capital.

4. The risk threshold of the fund is the maximum limit of total losses arising from investment activities determined in the investment strategy or investment plan based on the overall investment portfolio within an investment cycle.

5. The investment cycle of a venture capital fund (investment cycle) is the sequential operation process of the fund, including stages from raising capital, searching for, investing capital in innovative start-up enterprises, managing and developing the investment portfolio until successfully exiting to realize expected returns and distribute profits to investors.

6. The investment portfolio of a venture capital fund is a collection of investments made or committed to be made by the fund in innovative start-up enterprises or other funds, determined in accordance with the investment strategy, annual investment plan, and the fund's charter to optimize profits and diversify risks.

Article 4. Policies to Encourage and Promote Venture Investment

1. Creating conditions for financial institutions, venture capital funds, start-up investment funds, corporate science and technology development funds, domestic and international individual investors to participate in investment, support the development of the national and local start-up ecosystem, and venture investment in Vietnam.

2. Encouraging and creating favorable conditions for enterprises to participate in contributing capital to venture capital funds using state budgets to invest in innovative start-up enterprises consistent with their development strategies, investment plans, production, and business plans.

3. Developing digital platforms connecting innovative start-up enterprises, experts, individual investors, venture capital funds, start-up investment funds, supporting organizations for innovation, and promoting investment for innovation.

4. Encouraging enterprises and economic groups to establish innovative start-up enterprises and develop innovative start-up projects to develop new products, services, and creative business models attracting investment resources from venture capital funds and start-up investment funds.

Article 5. Principles of operation of the fund

1. Compliance with Vietnamese laws and international treaties to which Vietnam is a member; compliance with the laws of the country or territory when investing abroad.

2. Operating according to market principles, accepting controlled risks, ensuring transparency, efficiency, and information confidentiality.

3. Supporting the ecosystem of innovative startups, prioritizing investment in high-potential growth enterprises and projects in high-tech, digital technology, strategic technology, encouraged technology transfer, green economy, circular economy, sustainable development sectors, positively impacting local, national economies, society, and environment.

Chapter II

||| NATIONAL VENTURE CAPITAL FUND, LOCAL VENTURE CAPITAL FUND

Article 6. Legal status of the fund

1. The National Venture Capital Fund is established and operates under the limited liability company model with two or more shareholders or a joint-stock company as prescribed by the Enterprise Law.

2. The Local Venture Capital Fund is established and operates in the form of a business entity as prescribed by the Enterprise Law.

3. The National Venture Capital Fund and the Local Venture Capital Fund have legal personality, seals, and are allowed to open accounts at the State Treasury, domestic and foreign banks in accordance with relevant legal provisions.

Article 7. Organizational structure, powers, obligations of the fund and the representative of state capital in the fund

1. Organizational structure and powers of the fund:

a) The organizational structure and powers of the fund are stipulated in the Charter of the Fund (Company Charter) as prescribed by the Enterprise Law;

b) Rights, responsibilities, salaries, remuneration, bonuses, and other benefits of the representative of state capital in the fund are implemented in accordance with the legal regulations on management and investment of state capital in businesses. The Ministry of Science and Technology is the agency representing the owner of state capital in the National Venture Capital Fund, responsible for appointing the representative of state capital in the Fund. The People's Committee of the province is the agency representing the owner of state capital in the Local Venture Capital Fund, responsible for appointing the representative of state capital in the fund;

c) The fund may cooperate, hire domestic and foreign organizations and individuals to manage and operate the fund in accordance with the Fund Charter;

d) The fund may establish advisory boards and investment appraisal boards to support its investment activities.

2. The fund has the responsibility to implement accounting, auditing systems, tax obligations, and other obligations as prescribed by the laws applicable to businesses.

Article 8. Objectives, functions, tasks of the fund

1. Objectives of the fund

a) Investing and attracting resources to invest in innovative startup enterprises and projects with potential for breakthrough growth, capable of addressing economic, social, and environmental challenges at the local, national, and international levels;

b) Supporting the promotion of the national and local startup ecosystems, the venture capital market in Vietnam to serve the development of the national economy and society and international integration.

2. Functions and tasks of the National Venture Capital Fund

a) Contributing capital to establish, purchase shares, and purchase equity stakes in domestic and foreign innovative startup enterprises;

b) Jointly contributing capital with domestic and foreign venture capital funds and startup investment funds to establish, purchase shares, and purchase equity stakes in innovative startup enterprises;

c) Establishing and contributing capital to domestic and foreign venture capital funds and startup investment funds to carry out venture investments;

d) Supporting the national startup ecosystem.

3. Functions and tasks of the Local Venture Capital Fund

a) Contributing capital to establish, purchase shares, and purchase equity stakes in domestic innovative startup enterprises;

b) Jointly contributing capital with domestic venture capital funds and startup investment funds to establish, purchase shares, and purchase equity stakes in innovative startup enterprises;

c) Supporting the local startup ecosystem.

Article 9. Sources of Fund Capital

1. For the National Venture Capital Fund, the registered capital of the Fund includes:

a) The state capital portion allocated from the budget for development investment of the Ministry of Science and Technology, to be provided once at the time of establishing the Fund, with the initial state capital amount provided from the state budget being a minimum of 500 billion VND;

b) The contribution portion from domestic and foreign organizations and individuals (if any), implemented in accordance with the provisions of the law and the Fund's Charter.

2. The scale of the registered capital of the National Venture Capital Fund will reach a minimum of 2,000 billion VND within the first five years, based on the state capital allocated from the state budget and the portion raised from organizations and individuals.

3. For local venture capital funds, the registered capital of the fund includes:

a) The state capital portion allocated from the local budget for development investment, to be provided once at the time of establishing the fund, with the initial state capital ratio provided from the state budget determined by the Provincial People's Committee;

b) The contribution portion from domestic and foreign organizations and individuals (if any), implemented in accordance with the provisions of the law and the Fund's Charter.

4. The contribution, supplementation into the registered capital of the fund, transfer of contribution portions, management, and utilization of state capital in the fund shall be carried out in accordance with the laws on enterprises and the laws on managing and investing state capital in enterprises.

5. Grants, aid both domestically and internationally, and other lawful sources of capital raised, not included in the registered capital of the fund, must be accounted for and managed separately, used for their intended purposes in accordance with the law and the Fund's Charter.

6. The remaining contributions from domestic and foreign investors who meet the conditions stipulated in the Fund's Charter and are implemented through Contribution Agreements.

7. The use of assets for contributions shall be carried out in accordance with the laws on enterprises.

Article 10. Operation Mechanism of the Fund

1. The Fund establishes an investment strategy for each investment cycle including the following main contents:

a) Objectives, fields of investment based on actual needs and socio-economic development orientations of the country and locality;

b) Investment methods, targets, risk thresholds, and risk management principles;

c) The investment cycle using registered capital with a duration not exceeding 10 years from the date of investment commitment, in cases where the investment involves dual-use factors (civilian and security or defense simultaneously) or relates to strategic technology, the investment cycle duration does not exceed 15 years.

2. Based on the investment strategy stipulated in Clause 1 of this Article, the fund builds and publishes an annual investment plan, in which it determines the budget and progress of implementing investment commitments, divestment plans, and risk management.

3. Authority, responsibility, procedures for building, approving, and adjusting the investment strategy and investment plan are carried out in accordance with the provisions of the Fund's Charter.

4. Risk Management Principles:

a) The total loss arising from investment activities using registered capital in the overall portfolio and in an investment cycle is specifically defined in the investment strategy or investment plan and does not exceed a risk threshold of 50% of the fund's registered capital. The method of calculating losses and risk management measures are decided by the fund based on accounting standards permitted for application in Vietnam;

b) The fund periodically conducts or hires specialized organizations to conduct risk assessments in investment activities, related risks, and promptly applies appropriate risk management measures;

c) Annually report on risk situations and risk management to the Ministry of Science and Technology and the Ministry of Finance for the National Venture Capital Fund, and the Provincial People's Committee for local venture capital funds.

5. The fund does not apply capital preservation requirements for individual projects, tasks, or specific investment activities. The effectiveness of the fund's investments is evaluated based on the overall investment portfolio during the investment cycle.

6. Costs for management, operation, and other activities of the fund are guaranteed from the portion deducted from the total committed investment capital and the fund's revenue with a reasonable ratio determined according to the provisions of the Fund's Charter.

7. The fund's revenue sources include:

a) Profits from investment activities according to the Fund's Charter;

b) Interest income from bank deposits for idle capital between investment cycles, including both registered capital and raised capital of the fund;

c) Grants, aid, and lawful voluntary contributions from domestic and foreign organizations and individuals;

d) Revenue from the disposal of fund assets;

đ) Other lawful revenues as prescribed by law and the Fund's Charter.

8. The fund's operational expenses include:

a) Expenses for management, operation, and other activities directly serving the fund's operations;

b) Expenses supporting the development of national and local startup ecosystems up to a maximum of 5% of the fund's annual post-tax profit;

c) Expenses for setting aside a risk reserve fund for venture capital investments from the fund's annual operating capital, including registered capital and raised capital, as stipulated in the Fund's Charter;

d) Other lawful expenses as prescribed by law and the Fund's Charter.

9. The fund's investment expenses include:

a) Expenses for contributing capital to establish innovative startups;

b) Expenses for purchasing shares or contribution portions in innovative startups;

c) Expenses for contributing capital to venture capital funds or other startup investment funds as prescribed by law.

10. Divestment, profit distribution, loss handling, and setting aside risk reserve funds are stipulated in the Fund's Charter.

11. In cases where the total loss arising from investment activities using registered capital in the overall portfolio and in an investment cycle exceeds the risk threshold of 50% of the fund's registered capital, the fund has the responsibility to restructure the state capital portion in the fund in accordance with the laws on managing and investing state capital in enterprises.

12. The national venture capital fund's investment abroad through the forms prescribed in Points a, b, and c Clause 2 Article 8 and its receipt of contributions from foreign organizations and individuals as prescribed in Point b Clause 1 Article 9 of this Decree shall be carried out in accordance with the laws on investment.

Article 11. Management and Operation Mechanism

1. The Fund shall establish a management and operation mechanism, a cooperation mechanism, and a coordination mechanism to effectively utilize domestic and foreign resources and experts for supporting innovative startups, fostering an innovation startup ecosystem at the local and national levels, and connecting internationally.

2. The Fund shall establish criteria, conditions, and procedures for selecting organizations and individuals to manage and operate the Fund; enter into cooperation agreements and hire professional organizations and individuals both domestically and internationally to manage and operate the Fund.

Article 12. Independent Monitoring and Evaluation

1. The activities of the Fund shall be subject to independent monitoring and evaluation regarding risks, investment effectiveness, social impact, and private sector investment attraction.

2. The independent monitoring and evaluation mechanism shall be implemented through:

a) Annual financial reports and activity reports of the Fund being audited independently by a reputable auditing company meeting the required conditions and by state auditing agencies in accordance with the law;

b) The Fund shall periodically engage an independent consulting organization with the necessary expertise and experience every two years to assess compliance with approved risk management principles and thresholds, the effectiveness of the investment portfolio over cycles, the social impact of the Fund’s investments, and the effectiveness of private sector investment attraction in projects funded by the Fund;

c) The results of independent monitoring and evaluation activities as prescribed in Points a and b of this Clause shall serve as the basis for the Fund to make necessary adjustments to its strategy, plans, and investment portfolio in line with actual circumstances.

3. The representative body of the State-owned capital prescribed in Clause 1 Article 7 of this Decree shall be responsible for managing, tracking, and supervising State-owned capital in the Fund in accordance with the laws on enterprises and the laws on State capital management and investment in enterprises.

Article 13. Activity Reports

1. The representative of State-owned capital in the National Venture Capital Fund shall be responsible for coordinating with the Fund to prepare and submit semi-annual and annual reports on the investment portfolio, operational status, investment outcomes, and financial situation of the Fund to the Ministry of Science and Technology and the Ministry of Finance.

2. The representative of State-owned capital in the local venture capital fund shall be responsible for coordinating with the Fund to prepare and submit quarterly and annual reports on the investment portfolio, operational status, investment outcomes, and financial situation of the Fund to the provincial People's Committee.

3. Investors participating in the Fund's activities shall be provided information about the Fund's operations in accordance with the Fund's Charter.

Article 14. Exemption from Liability

1. Organizations and individuals managing and operating the Fund, including those deciding to contribute capital, develop and implement investment strategies, plans, manage the investment portfolio, and conduct other activities of the Fund, shall be exempted from civil liability and administrative responsibility related to losses arising from investment activities if they simultaneously meet the following conditions:

a) Losses arise from objective risks, not due to intentional fault of the organization or individual;

b) Compliance with all investment principles, internal regulations of the Fund, and obligations of transparency and honesty during the investment decision-making process;

c) The organization or individual has fully fulfilled their obligations regarding due diligence, reporting, transparent information disclosure, and seeking approval for investment as stipulated in the Fund's Charter.

2. Objective risks prescribed in Clause 1 of this Article include, but are not limited to, the following cases:

a) Financial market fluctuations, technology market changes, or macro factors beyond reasonable forecasting at the time of making the investment decision;

b) Changes in legal policies directly affecting the effectiveness or exitability of investments;

c) Natural disasters, epidemics, geopolitical conflicts, or other force majeure situations disrupting the operations of innovative startups or the implementation of innovative startup projects;

d) Other objective risks beyond the prediction and control capabilities of organizations and individuals deciding to contribute capital, develop and implement investment strategies, plans, manage the investment portfolio, and conduct other activities of the Fund.

3. The highest decision-making body of the Fund shall be responsible for confirming based on the report on the results of independent monitoring and evaluation as prescribed in Article 12, the activity report as prescribed in Article 13 of this Decree, or may seek the opinion of an independent consulting organization with appropriate expertise and experience before fulfilling the responsibility of confirming the conditions prescribed in Clause 1 of this Article.

Chapter III

 STATE MANAGEMENT OF THE NATIONAL VENTURE CAPITAL FUND AND LOCAL VENTURE CAPITAL FUNDS

Article 15. Responsibilities of the Ministry of Science and Technology

1. To be the focal point for organizing the selection of capable founding members to participate in establishing the National Venture Capital Fund, and to cooperate with other members in drafting the Fund's Charter.

2. To propose the level of allocation for forming the registered capital of the National Venture Capital Fund and to consolidate this within the budget estimate plan for the fields of science, technology, innovation, and digital transformation, to be submitted to the Ministry of Finance for consolidation and presentation to the competent authority for consideration and decision.

3. To perform the rights, obligations, and responsibilities of the state-owned enterprise representative body regarding the state-owned share in the National Venture Capital Fund in accordance with the laws on state capital management and investment in enterprises.

4. To compile reports to the Government on the operational status of local venture capital funds.

Article 16. Responsibilities of the Ministry of Finance

To balance and propose the allocation of state budget expenditure for the fields of science, technology, innovation, and digital transformation in accordance with the laws on the state budget, public investment, and sectoral management laws.

Article 17. Responsibilities of the People's Committee of the Province

1. To be the focal point for organizing the selection of capable founding members to participate in establishing the local venture capital fund, and to cooperate with other members in drafting the Fund's Charter, to be submitted to the Chairman of the People's Committee of the province for approval.

2. To propose the level of state capital and sources of state capital participating in the registered capital of the local venture capital fund, to be submitted to the competent authority for consideration and decision.

3. To perform the rights, obligations, and responsibilities of the state-owned enterprise representative body regarding the state-owned share in the local venture capital fund in accordance with the laws on state capital management and investment in enterprises.

4. To report annually to the Ministry of Science and Technology on the operational status of the local venture capital fund.

Article 18. Effective Date

1. This Decree shall take effect from October 14, 2025.

2. The Ministers, Heads of ministerial-level agencies, Heads of government-affiliated agencies, Chairmen of provincial People's Committees, and heads of related agencies are responsible for implementing this Decree.