EuroCham Chairman believes in Vietnam's diplomatic skills

EuroCham members talk with the EU delegation, discussing upcoming high-level visits - Photo: EUROCHAM

Nearly 70% would recommend Vietnam as a destination

"European businesses in Vietnam continue to place their trust in Vietnam's diplomatic skills in navigating global trade tensions," said Bruno Jaspaert, chairman of EuroCham.

According to the latest Business Confidence Index (BCI) Survey of EuroCham Vietnam conducted by Decision Lab from March 10 to 27 (before the US announced reciprocal tariffs on April 2), the business sentiment of European enterprises in Vietnam in the first quarter of 2025 showed signs of slight improvement compared to previous quarters.

Mr. Bruno Jaspaert, Chairman of EuroCham - Photo: EUROCHAM

42% of businesses participating in the survey held a neutral view of the business environment.

Mr. Thue Quist Thomasen, CEO of Decision Lab, assessed that businesses still maintain a stable but cautious mentality, optimistic but cautious.

At the time of the survey, Vietnam's stable economic growth along with positive GDP forecasts (mentioned by 37% of businesses) also helped reassure investors.

In addition, businesses appreciated trade and investment opportunities (24%), as well as the recovery of consumer spending and tourism (18%) as positive signals.

Some 68% of European business leaders said they would recommend Vietnam as an investment destination, demonstrating a long-term commitment, down 7 percentage points from the last quarter of 2024.

Caution remains the dominant factor in the overall sentiment, with more than half of businesses (52%) citing a global economic slowdown and fluctuations in international trade as top concerns.

The challenge is still administrative procedures

Businesses participating in the survey also pointed out a number of areas that need improvement.

Infrastructure development (37%) is considered a top priority, while there is also a need to streamline administrative procedures (29%), ease visa and work permit procedures for foreign experts (24%); and increase transparency in laws and law enforcement (21%).

As in previous BCI reports, administrative procedures remain a major challenge for European businesses in Vietnam. Serious barriers include cumbersome administrative procedures, a cumbersome regulatory apparatus, inconsistent law enforcement and a lack of regulatory transparency.

Value Added Tax (VAT) refunds remain a challenge for European businesses, with 41% reporting occasional or frequent delays, with 19% having to wait 1-3 months and 16% having to wait 6-12 months.

Compared to previous years, European businesses noted Vietnam's progress in areas such as infrastructure, technology connectivity and human resource development.

However, more than 70% of surveyed businesses said they saw little or no improvement in market and investment conditions, cost management, and administrative procedure performance.

Business is more effective if under 30 provinces

Many European businesses in Vietnam expressed hope for clear progress in streamlining their apparatus from 2026.

Positive improvements expected include switching to an electronic filing and approval system (45%), speeding up administrative procedure processing times (26%), and empowering local authorities more proactively (25%).

Regarding the proposed provincial merger, more than 40% of businesses believe that these changes could help improve administrative efficiency and reduce regulatory complexity.

Notably, 44% said their business would be more efficient if Vietnam reduced the number of provinces to less than 30, reflecting a desire for a more streamlined governance system.

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Source: https://tuoitre.vn/chu-tich-eurocham-tin-vao-kha-nang-ngoai-giao-kheo-leo-cua-viet-nam-20250405014543438.htm