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Wednesday, July 24, 2024

HCMC proposes using local budget to support start-ups

The Saigon Times

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HCMC – The HCMC People’s Committee has put forward a proposal to offer up to VND400 million in support to each innovation and start-up project in the pre-incubation stage, using funds from the local budget.

The non-refundable financial assistance will be directed towards the pre-seed stage of innovation start-up businesses.

HCMC is renowned for its dynamic innovation and start-up ecosystem, and is home to nearly 2,000 start-up businesses. In 2022, along with Hanoi, the city was ranked among the top 200 active ecosystems globally, a significant increase from the previous year’s ranking.

The various stages in a start-up’s development include idea generation, research and development, pre-incubation, incubation, acceleration, development, growth and expansion. Among these, research and development, pre-incubation, and incubation are critical phases.

Existing regulations mostly benefit start-up businesses, but there are only a few eligible businesses. Government policies in science and technology for start-ups primarily focus on the research and development phase, so start-ups in the city have yet to receive sufficient funding for pre-incubation, incubation, and acceleration stages.

Additionally, private sector funding is directed towards later stages due to investor concerns about potential risks. In practice, up to 99% of start-ups in HCMC that excel in start-up contests already have finished products and business models aligned with market requirements.

Hence, the HCMC authorities propose that each innovation and start-up project receive a maximum non-refundable funding of VND40 million from the local budget for their pre-incubation stage, lasting six months. For the incubation stage, a maximum non-refundable funding of VND80 million will be provided for a maximum duration of 12 months. During the acceleration stage, funding will not exceed VND400 million annually.

Eligible recipients of financial aid include individuals, groups of individuals, enterprises involved in innovation and start-up projects within the city’s priority sectors, and organizations that support innovation start-ups in the city.

The proposal prioritizes sectors such as e-commerce, fin-tech, logistics, edu-tech, healthcare, hi-tech agriculture, sustainable development, digital transformation, and cyber-security. Eligible projects must meet criteria related to creativity, feasibility, economic efficiency, social impact, potential markets, and technology application.

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