The Business Confidence Index (BCI) of the European Chamber of Commerce in Vietnam (EuroCham Vietnam) has soared from 46.3 in Q4/2023 to 61.8 in Q4/2024, reflecting the European business community’s optimism about Vietnam’s economic prospects. This result demonstrates Vietnam’s remarkable resilience in the face of global volatility, while affirming the country’s increasingly prominent position as a regional trade and investment hub.
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Vietnam: A shining star among investment destinations
The BCI has mostly hovered around the neutral level of 50 over the past two years, with several quarters even dropping below this threshold. However, the Q4 2024 report marks a significant turning point as the index reaches its highest level since early 2022.
According to the latest BCI survey, 42% of respondents said they feel positive about the current business situation, while 47% expect business conditions to remain positive in the next quarter. More notably, 56% forecast an improvement in Vietnam’s macroeconomic outlook in the first quarter of 2025.
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“This is a clear sign that European businesses are increasingly confident in Vietnam’s economic prospects,” said Bruno Jaspaert, Chairman of EuroCham Vietnam. “This marked increase in confidence reflects widespread recognition of the country’s political and economic transformation over the past years. The country’s continued GDP growth further confirms Vietnam’s position as an important link in the Southeast Asian trade and investment chain.”
The increase in business confidence can be explained by a number of factors, especially Vietnam’s ongoing economic reforms and the country’s central role in the global trend of sustainable development. In particular, many businesses participating in the survey identified the “dual transformation” – the digital and green transformation – as playing an important role in the positive assessments.
Businesses that embrace these trends have seen strong growth, with some reporting revenue growth of up to 40% year-on-year. The sustainability trend, driven by both Vietnamese government policies and international green standards, is becoming an important factor in shaping business strategies across many sectors.
Perhaps most strikingly, 75% of the survey respondents said they would recommend Vietnam as an ideal investment destination. This data underscores the growing recognition of Vietnam’s strategic importance as an investment hub in Southeast Asia. With strong growth and expanding infrastructure, Vietnam has continued to assert its position as an attractive destination for European businesses looking to expand their operations in the region.
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“The growing confidence of European businesses in Vietnam as an attractive investment destination is a testament to the country’s solid foundations in both trade and economic policy,” commented the Chairman of EuroCham. “Despite global challenges, Vietnam’s positive investment environment is creating new opportunities for European businesses, especially in key sectors such as technology, manufacturing, tourism and renewable energy.”
Statistics from the survey show that European businesses are increasingly positive about Vietnam as an attractive destination for foreign investment projects, said Mr. Thue Quist Thomasen, CEO of Decision Lab - the organization that conducted EuroCham's BCI Survey.
“Accordingly, the majority of businesses have planned to expand their operations in Vietnam. About a quarter of businesses said they are considering cooperation with Vietnamese manufacturers or service providers, while more than a fifth of businesses participating in the survey want to expand their presence in Vietnam. In addition, another 30% of businesses plan to increase import/export activities and/or move production activities to Vietnam to take advantage of the trade advantages that this country offers. This move is in line with the trend of global trade shifts, especially in the context of recent disruptions to global supply chains,” said Mr. Thue Quist Thomasen.
Overcoming the challenges of strong reform efforts
Despite the positive overall outlook, operational challenges remain a concern for European businesses in Vietnam. As in previous BCI reports, the three biggest operational challenges identified were administrative burdens, unclear regulations, and difficulties in obtaining permits. Complexities related to visa requirements for foreign experts topped the list of administrative challenges, with 42% of businesses reporting this as the most important issue. Tax-related issues, including VAT refunds, were also noted by 30% of businesses, along with other challenges related to import-export procedures and investment registration.
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“Vietnam is at a critical turning point,” said Chairman Jaspaert. “These persistent administrative difficulties are challenging business operations, but we remain optimistic about the Government’s determination to create a more conducive environment. Efforts such as the restructuring and streamlining of the organizational structure are showing positive prospects. At EuroCham, we will continue to contribute practical solutions and advice to address the current administrative bottlenecks. Our annual White Paper will focus on these issues and propose solutions to overcome them.”
In November 2024, Prime Minister Pham Minh Chinh signed a decision to establish a Steering Committee to review the implementation of Resolution No. 18 of the Central Committee on continuing to innovate and reorganize the apparatus of the political system to be streamlined and operate effectively and efficiently.
Many businesses surveyed expect these reforms to bring about significant improvements in administrative processes, with 43% believing that processes will be simplified in the long term, especially when digital platforms are adopted and paperwork requirements are reduced. However, 36% believe that there may be delays in processing documents during the restructuring period. Nevertheless, the Government’s commitment to digital transformation and the application of e-Government systems is considered by the business community as a positive step forward.
Building Vietnam’s legal framework is like building a house: Any house that wants to stand firm must have a solid foundation, said Chairman Jaspaert. Transparent, clear and efficient legal processes will help the country thrive, improve trade and encourage investors to consider Vietnam as their new home.
“I believe that Vietnam is about to enter a golden age. The restructuring and streamlining of the government apparatus is a huge and complex project, but the results - such as a growing economy, increased FDI and a golden age for the country - will make all the efforts extremely worthwhile,” said the Chairman of EuroCham.
“In Vietnam’s transformation, opportunities for European businesses are clearly present. With the right policies, continued infrastructure upgrades, and an increasingly improved business environment, Vietnam can continue to attract investment and promote sustainable growth in the years to come. At EuroCham, we are committed to our mission of accompanying Vietnam on this journey,” Chairman Jaspaert concluded.Source: https://thoibaonganhang.vn/index-of-business-trust-bci-quy-iv-nam-2024-tang-vot-len-618-159693.html
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