Vietnam’s Ministry of Science and Technology has proposed establishing a National Venture Capital Fund with an initial capital of $100 million for the 2026-2028 period.

The initiative aims to accelerate the commercialization of strategic technologies and the formation of competitive technology enterprises, the ministry said at a meeting of the Government’s science-technology-innovation committee on Tuesday .

Under the proposal, the state would play a leading role in the fund’s initial capital structure, modelled on Israel’s Yozma program. From 2028 to 2035, the fund would gradually mobilize private capital, accounting 30 to 40 percent of the total capital, alongside the development of separate funds for different technology sectors.

The ministry stressed challenges to operating the fund effectively, especially a conflict between the risk-tolerant nature of venture capital and the principles of state capital preservation. Another issue is an underdeveloped exit ecosystem with limited mechanisms for valuing technology companies and channels for investors to recover capital.

On governance, the ministry proposed market-based recruitment and compensation, granting autonomy to the fund’s investment council, and strengthening ties with research institutes, universities, and technology incubators. On risk management, the ministry said fund performance should be evaluated across the entire portfolio rather than on individual deals, with protection mechanisms for decision-makers who follow proper procedures.

On the legal framework, the ministry recommended that the government report to the National Assembly to issue a resolution on a specific mechanism, including liability exemption for officials managing state-funded venture capital who comply with regulations, to enable controlled risk-taking in investments in strategic technologies.

Foreign capital pushes Vietnamese startups to set up abroad, Vietnam risking tax, asset losses