80% European Enterprises Confident in Vietnam’s Investment Climate

10:05:39 AM | 28/10/2019

Vietnam’s entrepreneurial spirit is just one of the reasons for the country’s remarkable growth and success over recent decades. Today, the investment environment in Vietnam is becoming even more open, competitive, and business-friendly. Positive changes to the country’s legal framework have unlocked a rising tide of Foreign Direct Investment (FDI) which, combined with entrepreneurial Vietnamese companies, has been the engine of the country’s socio-economic growth.

EuroCham has been active in Vietnam for over two decades, and we have seen first-hand the positive changes to the trade and investment landscape in the country. Our Business Climate Index, in which we ask our one thousand members for their views on the business environment in Vietnam, continues to show strong and positive results. In 2019, European enterprises remain confident about doing business in Vietnam, and optimistic about the prospects of their companies here in the future. In short, the latest positive score of 80% is another vote of confidence in Vietnam and its investment environment.

So we can say with certainty that, on the 15th anniversary of “Vietnam Entrepreneurs Day”, Vietnam is moving in the right direction. The Government continues to reform the legal framework and investment environment to attract more FDI, and European companies are growing their investment here in response.

Indeed, the European Union is one of Vietnam’s most important sources of FDI. Today, Europe is the fifth-largest FDI partner for Vietnam, with almost US$24 billion invested in over two thousand projects across the length and breadth of the country. European investors are present in 52 out of 63 provinces and municipalities of Vietnam, with the majority of investment being in manufacturing (US$8.4 billion), electricity (US$5 billion) and real estate (US$2.6 billion). Last year alone, Europeans invested over US$1 billion in Vietnam. This will grow even further once the EU-Vietnam Free Trade Agreement (EVFTA) and Investment Protection Agreement (EVIPA) are ratified and enter into force, following the official signing in Hanoi in June.

This signing takes us one step closer to implementation. The EVFTA now needs to be ratified in the European Parliament and Vietnam’s National Assembly before it can enter into force, while the EVIPA also needs to be ratified in each EU Member State. These comprehensive and ambitious agreements will eliminate 99% of tariffs over the course of a decade. This will boost the number of European investors in Vietnam, better protect their investments, and increase confidence in Vietnam as an attractive place in which to do business.

Mr. Nicolas Audier, Chairman of EuroCham