Policies are needed to keep Vietnamese game startups in Vietnam as many are being set up abroad but employing local developers to create products, analysts believe.

Many game businesses have headquarters overseas, especially in Singapore or Dubai, to enjoy preferential policies in those countries. Revenue from the game industry in Vietnam reached $665 million in 2021 but individuals and businesses paid only 50 per cent of their total tax obligations in the country.

CEO of Topebox Thai Thanh Liem told VnEconomy / Vietnam Economic Times that local game startups and studios being established abroad was unfortunate in a developing country like Vietnam. The loss of income from a digital business segment with a high rate of revenue has caused economic losses for the country, and shows that appropriate policies are needed to encourage local game businesses to return home.

Some analysts said Vietnamese game startups need nurturing but there are many risks relating to policies that force them to move abroad. In countries like Singapore, meanwhile, game businesses can access many incentives, especially tax incentives.

Many businesses believe that tax regulations in Vietnam are quite complicated and create difficulties.

Mr. Liem said as the game industry is still young with a low business capacity, Vietnamese game businesses tend to choose countries with tax incentives and sandbox mechanisms to curb the risks.

Game businesses in Vietnam, particularly startups, also find it hard to access capital sources.