Vietnam’s government is pioneering a transformative approach to foster innovation through the introduction of a regulatory sandbox, a flexible legal framework designed to allow tech companies and startups to trial new business models in a controlled environment. This initiative promises to reshape regulatory thinking and accelerate the growth of innovative enterprises nationwide.
Nguyen Ba Diep, co-founder of one of Vietnam’s earliest unicorns and Vice Chairman of Momo, highlights that institutional reform is the quickest, most effective and least costly way to support emerging businesses. He emphasises that turning policy resolutions into concrete actions requires active collaboration between the State and private enterprises. “With the right policies, the private sector can achieve significant breakthroughs and become a foundational pillar of the national economy,” Diep says.
The regulatory sandbox represents more than just a pilot programme. If implemented efficiently and inclusively, incorporating feedback from real-world trials, it could become a powerful launchpad for breakthrough business models and a key driver for Vietnam’s startup ecosystem.
This innovative framework permits tech firms to experiment without the constraints of rigid regulations, enabling them to learn, adapt and scale successfully. However, businesses stress that beyond the sandbox’s creation, consistent and nationwide application, from central to local authorities, regulators to enforcers, is essential for its success. Such a coordinated approach will help reduce risks and ensure that innovation aligns with national development goals, promoting sustainable growth across industries.
In parallel, other sectors like real estate are calling for reforms that ensure transparency and fair competition. Nguyen Thanh Huong, Investment Director at Nam Long Group, advocates for equal access to land resources and stronger institutional policies to support housing and urban development projects.
Dinh Hong Ky, Vice Chairman of the Ho Chi Minh City Business Association, underscores the need to protect private enterprises’ rights — including property rights, business freedom and fair competition. He stresses the importance of eliminating administrative hurdles and outdated regulatory mindsets that stifle innovation. Ky also points out the necessity of clear legal distinctions between types of liabilities and responsibilities to foster a more business-friendly environment.
Financial support mechanisms, such as the 2% interest rate support scheme for small, innovative and ESG-focused businesses, are urgently needed but face challenges. According to Phat, this scheme’s rollout has been hampered by complex procedures and cautious banking practices. He advocates for broader reforms, including simplified administration, digital credit approvals and detailed green credit frameworks. Private banks have already shown readiness to back businesses with preferential capital packages once these bottlenecks are addressed.
In agriculture, Nguyen Dinh Tung, CEO of T&T Vina, points to the prevailing ‘ban if you can’t manage’ mentality that restricts innovation. Using the durian industry as an example, he explains the difficulties farmers face in securing capital, as long-term crop cycles prevent land from being used as collateral.
Tung urges the Government to officially recognise agricultural assets on land as valid collateral to unlock credit for farmers, which would empower rural economies and boost sustainable agricultural growth. This shift would encourage more investments in agritech, increase productivity and strengthen food security for the country.
Dr Nguyen Xuan Thanh of Fulbright University Vietnam notes that sustained economic growth in recent years has been largely fueled by domestic private enterprises. To maintain this momentum, Vietnam needs a highly competitive, efficient market economy supported by robust institutions that regulate effectively and resolve market failures.
The regulatory sandbox and related reforms signal a strong push toward an innovation-friendly environment, enabling enterprises to thrive and strengthen Vietnam’s economic resilience and long-term prosperity. Such reforms will not only benefit startups but also attract foreign investment, elevate Vietnam’s position in the global technology landscape and foster long-term economic stability.
Source: https://opengovasia.com/2025/06/11/regulatory-sandbox-to-power-vietnams-start-up-ecosystem/
