A smart transport solution is introduced at an exhibition in HCM City. Supportive policies under the National Assembly’s Resolution 98, if implemented well, will further boost the start-up ecosystem in HCM City. — Photo khoahocphothong.vn

Resolution 98, which grants special mechanisms and policies for the development of HCM City, encompasses several tax benefits for start-ups in the city’s priority sectors.

Under the resolution, corporate income tax will be exempted for a period of five years, including income generated from innovative start-up activities conducted by businesses, scientific and technological organisations, and innovation centres.

In addition, personal income tax of individuals and corporate income tax of organisations with income from transferring contributed capital in start-ups will also be exempted.

Experts, scientists, talents, and start-up individuals at innovative start-ups are also exempt from personal income tax on income from salaries and wages for five years from the time taxable income is generated.

The city People’s Council has approved a number of resolutions to support start-up activities in accordance with Resolution No. 98, including the Resolution 20 that stipulates priority sectors, criteria, conditions and level of support for innovative projects and start-ups.

The municipal People’s Committee has issued a plan to support nearly 2,000 innovation and start-up initiatives in the 2024-28 period.

Under the plan, the southern economic hub aims to support over 1,000 innovative start-up projects in the pre-seed stage, along with more than 700 projects in the incubation phase, and over 200 in the stage of seeking venture investors.

To this end, the city will organise a wide array of events and activities to bolster innovation and start-ups, including training courses, annual competitions, pitching events, and exhibitions and conferences.

Lê Nhật Quang, deputy director of the Software Technology Park of Vietnam National University, HCM City, said these resolutions are being adjusted to suit reality, goals and in accordance with existing laws.

The start-up community wants to participate in programmes that offer direct support to start-up projects. Additionally, it also wants the city to soon concretise policies on corporate and personal income tax exemptions, said Quang, who is also the director of the Innovative Entrepreneurship Centre at the VNU-HCM City.

The Department of Science and Technology and other departments and sectors of the city have organised meetings to discuss and collect opinions on the issue several times, but have not yet reached a consensus, he told Người Lao Động (Labourers) newspaper.

Hồ Việt Hải, co-founder of Alternō, a climate tech start-up that develops sand-based batteries for agricultural energy storage solutions, said the majority of the financial backers of Vietnamese start-ups have been foreign funds. If there is a tax exemption or reduction policy for investors, it will create motivation for deep-pocketed corporations and individuals to invest in start-ups, he said.

Being Việt Nam’s economic, science and technology hub, the city boasts the most vibrant and dynamic entrepreneurship ecosystem in the country. It is home to over 2,000 start-ups, accounting for about 50 per cent of such enterprises nationwide, and nearly 200 venture capital funds.

The innovation start-up ecosystem in HCM City ranked first in the country in 2023, according to the city’s Department of Science and Technology.

Last year, the city’s innovation ecosystem attracted 44 per cent of investment capital and 60 per cent of the deals of the country.

According to the Global Start-up Ecosystem Report 2023 by Startup Genome, the city secured its position within the top 100 emerging start-up markets worldwide, placing in the range of 81-90.— VNS