Tran Thi Nhu Quy – Junior Associate

On July 21, 2025, the Government issued Decree No. 210/2025/ND-CP (Decree 210/2025), which amends and supplements a number of articles of Decree 38/2018/ND-CP on investment in small and medium-sized startup enterprises. The new decree came into effect on September 15, 2025.

Regulations on Organization and Establishment of Fund

A Venture Capital Fund does not have legal personality and is established by a minimum of 2 and a maximum of 30 investors, as stipulated in the fund's charter. A Venture Capital Fund is not permitted to contribute capital to another venture capital fund.

A Venture Capital Fund can be managed under one of the following models:

• General Meeting of Investors, Venture Capital Fund Management Company.
• General Meeting of Investors, Fund Representative Board or Fund Director, and a Venture capital Management Company.
• General Meeting of Investors, Fund Representative Board, Fund Director, and a Venture Capital Fund Management Company.

The fund's investors can establish or hire a fund management company to manage the fund. The management company is responsible for carrying out the fund establishment procedures as regulated by law. In the course of managing the fund, the fund management company:

• Not allowed to use the fund's capital and assets to invest in itself.
• Not allowed to use the fund's capital and assets for commercial loans or to guarantee any commercial loans.
• Not allowed to use the fund's capital and assets to invest in listed stocks, registered trading stocks, bonds, or fund certificates under securities law.
• Not allowed to promise profits in the all documents and fund's capital raising activities.

Contributed Assets

Valid contributed assets include: Vietnamese currency, land use rights, intellectual property rights, technology, technical know-how, and other assets that can be valued in Vietnamese Dong.

Scope of Investment Activities

The fund is permitted to engage in the following activities:

• Investing in small and medium-sized startup enterprises, with the total investment not exceeding 50% of the enterprise's charter capital after receiving the investment.
• Investing in convertible investment instruments.
• Investing in the right to purchase shares in small and medium-sized startup enterprises. This transaction may not be transferred to third parties.

A Venture Capital Fund may use idle capital from investor contributions to make term deposits or purchase certificates of deposit at credit institutions in accordance with legal regulations, but must ensure capital safety. The fund management company is only allowed to make deposits and purchase certificates of deposit at credit institutions approved by the Fund Representative Board.

Accounting and Supervision

All capital and assets contributed by investors to the fund must be accounted for separately from the capital and assets of the fund management company. The investors who contribute to the fund can agree on the making decision authority on the investment portfolio, and this must be stipulated in the fund's charter and the contract with the fund management company (if any).

In conclusion, Decree 210/2025 has recognized non-monetary assets such as intellectual property rights, technology, and technical know-how as legal contributed assets, alongside cash and land use rights. Also, Decree 210/2025 adds more flexible investment activities, such as convertible investment instruments and the right to purchase shares in small and medium-sized startup enterprises, while also tightening regulations on the management of idle capital.

Decree 210/2025/ND-CP creates more solid legal framework for the operation of venture capital funds, contributing to the promotion of investment in startups in Vietnam. However, detailed circulars will be needed to provide guidance on the valuation of non-monetary assets and suitable supervision mechanism for these funds.

Here is our article about Venture Capital Fund – Decree No. 210/2025/ND-CP be effective on September 15, 2025. If you are interested or require legal support regarding electronic identification procedures for enterprises, please visit our DIMAC Website and explore the News Category to stay updated with the latest legal insights and shared market experiences.