HCM City seeks foreign capital for cash-hungry startups

HCMC is looking for funding from international organizations to support local startups in a bid to achieve the target of having 500,000 enterprises by 2020, an official said on July 27.

HCMC vice chairman Tran Vinh Tuyen said at a meeting with the United States Agency for International Development (USAID) that the city would concentrate on helping startups which are mostly owned by young entrepreneurs and in dire need of capital.

Apart from capital, international organizations can provide the city and its startup community with experience in how to deal with international investment disputes, Tuyen said.

HCMC itself has planned to set up a fund worth VND1 trillion (US$44.9 million) to support startups, he said, adding that young businesses could receive training to earn a certificate for access to funding.

The city will guide those firms into the information technology and e-commerce sectors, following the current global trend for startups.

HCMC also pays much attention to improving its Provincial Competitiveness Index (PCI).

To do so, it will focus on three key issues: reducing and gradually scrapping informal fees, guaranteeing transparency for providing information to ensure fairness, and classifying enterprises to simplify registration procedures.

The city has suggested the Government allow it or its district-level authorities to choose investors for a particular project and take responsibility for that project, said Tuyen.

Jared Barenter, a representative of USAID in Vietnam, said the U.S. government has provided Vietnam with US$42 million to implement the Governance for Inclusive Growth (GIG) project to strengthen its policy making and implementation in a way that complies with regulations and commitments stipulated in the trade agreements Vietnam has signed, including the Trans-Pacific Partnership (TPP).

He said the project prioritizes small and medium-sized enterprises.

It is expected that after USAID finishes its study into Vietnam’s trade activities and its efforts to improve the business environment for investors, the U.S. government will further its support for Vietnam through the GIG project.

According to information provided at the meeting on July 27, U.S. investors are involved in 300 projects in HCMC.

Capital flow between the U.S. and Vietnam is expected to rise after the TPP is ratified, possibly late this year.

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