Vietnamese startups are concerned about new online regulation that states online services or telecommunications may be deemed as illegal without prior permission reports The Nation.

Article 292 of the Penal Code adopted by the National Assembly last year recently stirred up controversy as it stated that online services via telecommunication networks can be labelled as illegal. The committee said that these regulations are to be put in place in order to ensure that businesses are operating legally, mainly large scale enterprises, not startups. The director of the committee, Nguyen Thi Kim Thoa, said that startups should not worry about Article 292, but this has not done much to ease entrepreneur’s concerns.

Vietnam’s local startup community has expressed great concern over that particular article, for fear of going to jail.

Fearing that this was going to negatively impact the country’s growing startup community, a petition calling for the dismissal of Article 292 under Penal Code 2015 was sent to ministries and agencies. The petition also reached Prime Minister Nguyen Xuan Phuc and received almost 6,000 signatures after one week.

The National Assembly has recently issued a resolution to delay the Implementation of Penal Code 2015 on June 30, as the resolution was set to take effect on July 1 of this year.

The National Assembly’s Standing Committee is now ordering a review of the bill on the amendments and supplements to some articles of the Penal Code 2015.

The article will have an incredible impact on the online business community, especially on start-ups in the technology field, said Nguyen Bao Long, Marketing Executive of UP Co-working Space.

Article 292, which includes a maximum fine of up to $224, 000 or a prison sentence of up to five years, is too strict and might slow the development of service businesses on the Internet in particular, as well as the information and technology sector in the country overall.

Internet developers are concerned about Vietnam’s technological development. However, no formal decision has been made since the petition.

A version of this appeared in The Nation on July 12. Read the full version here.