HCM CITY — Article 292 of the Penal Code, which stipulates penalties, including prison sentences for providing unlicensed online or telecom services, is inimical to IT start-ups, the HCM City Computer Association has said.

Speaking at a meeting between HCM City authorities and IT business executives yesterday (August 31), Vũ Anh Tuấn, general secretary of the association, said providing such unlicensed services is liable for fines of up to VNĐ5 billion (US$222,000) or imprisonment of up to five years.

This acts as a dampener for IT companies since, before commercialisation, any new service has to be tested many times on the internet or telecom networks, but the regulation does not allow this, he said.

It is “killing” start-ups’ innovation, and the consequence is that the city is seeing a trend of many of them moving to Singapore, he said.

Many IT start-ups ask the association if they should do business in Việt Nam or move to other countries since they realise they are not protected in the country and risk falling foul of the law, he said.

Some of the attending executives warned that the provision could stymie the city’s plan to incorporate 5,000 science and technology companies by 2020.

Tuấn said the country should be more open, citing the example of the US, which is ready to provide visas for start-up entrepreneurs and many incentives.

Lê Thái Hỷ, head of the city Department of Information and Communications, said companies should not be too worried about the provision, promising that likely problems would be resolved.

Companies in the industry, especially the association, should report the problem to the city People’s Committee, which would forward it to the Government, he said.

When the Penal Code was passed, enterprises were not asked for their opinions, he added.

Đào Đình Khả, head of the central Department of Information and Communication, said if the regulation is not amended, the government’s policy to encourage start-ups would lose its effectiveness.

In future enterprises would be consulted, he promised. — VNS