A money transfer conducted via the mobile app of technology unicorn Momo. The Ministry of Science and Technology proposed assessing start-up eligibility for IPOs using indicators better suited to innovation-driven businesses. — VNA/VNS Photo Văn Phúc

HÀ NỘI — The Ministry of Science and Technology has proposed easing initial public offering (IPO) requirements for innovative start-ups by removing the requirement that companies must be profitable before listing.

The proposal was submitted as part of comments on a draft amendment to the Law on Securities in the context that Việt Nam is accelerating the development of the innovation-driven start-up ecosystem.

Under current regulations, companies seeking an IPO must satisfy nine conditions, including recording profits for two consecutive years before the offering, having no accumulated losses and maintaining at least VNĐ30 billion (US$1.1 million) in charter capital.

The Ministry of Science and Technology said that current rules were preventing high-growth technology firms from accessing domestic capital markets.

These requirements do not reflect the business model of technology start-ups, which typically spend their first three to five years investing heavily in research and development (R&D), product development, technology testing, business model refinement and customer acquisition, according to the ministry.

Such companies often accept sustained losses during their early stages to build long-term growth, making it difficult to meet profitability requirements for IPOs despite strong growth potential.

The ministry warned that maintaining the current rules could discourage fast-growing start-ups from listing in Việt Nam and prompt them to seek overseas capital markets instead, potentially diverting investment away from the country.

Instead of relying primarily on profitability, the ministry proposed assessing start-up eligibility using indicators better suited to innovation-driven businesses, such as revenue growth, R&D expenditure as a share of revenue, company valuation and backing from venture capital funds.

However, according to the Ministry of Finance, which is preparing amendments to the Law on Securities, the existing IPO requirements are intended to ensure companies have achieved a basic level of financial stability before raising funds from the public, and to protect investors and maintain the quality of the stock market.

The proposed alternative indicators are not standardised accounting or financial measures and may not adequately demonstrate a company's ability to generate sustainable cash flow, and using such criteria could cause subjective assessments and difficulty for regulatory oversight.

The finance ministry is instead studying a separate capital market mechanism tailored to innovative start-ups, alongside the development of a specialised trading platform.

Việt Nam’s start-up ecosystem has expanded significantly in recent years, with around 4,000 innovative start-ups by the end of 2025, including two technology unicorns valued at more than $1 billion each, namely MoMo and Sky Mavis.

The ecosystem also includes 208 investment funds, 84 incubators, 40 business accelerators and more than 20 start-up support centres nationwide.

Earlier this year, the Government approved the national strategy on innovative start-ups, which aims to increase the number of innovative start-ups to at least 10,000 by 2030 as part of a broader target of five million business entities nationwide.

By 2045, the strategy envisions one in every ten citizens engaging in entrepreneurial activity, one enterprise for every 35 citizens and approximately one innovative start-up for every 5,000 people. At least 100 start-ups are expected to reach valuations exceeding $100 million, with the venture capital market expanding to $10 billion.

Unlocking capital flow through the stock market is considered crucial to turning these long-term national ambitions into reality, especially as venture capital investment has slowed from its 2021 peak.

According to VinVentures, Việt Nam recorded about 41 venture capital deals worth approximately $215 million in 2025, down 30 per cent from the previous year. — VNS