EuroCham: Administrative procedures hinder business confidence in Vietnam

European businesses at the High-Rise Building Forum event held in Ho Chi Minh City - Photo: EuroCham

On July 15, the European Chamber of Commerce in Vietnam (EuroCham) released the Business Confidence Index (BCI) report for the second quarter of 2024, providing a comprehensive picture of the business environment in Vietnam.

Despite strong GDP growth in the first half of 2024, the BCI declined slightly from 528 points in Q1 to 513 points in Q2.

The survey results show that fewer companies reported the economic situation as “very bad” (down from 8% to 6%), while the number of companies describing it as “bad” increased slightly (from 24% to 26%). However, 68% maintained a neutral to positive view of their business conditions.

In the short-term outlook, 45% of businesses expressed cautious optimism about Vietnam's economy in the third quarter of 2024, while 23% still had concerns.

However, in terms of long-term prospects, up to 70% of businesses expressed optimism about Vietnam's economic growth in the next 5 years, and this rate reflects strong belief in the market's potential.

The survey highlights the legal challenges of the business environment in Vietnam.

Accordingly, European businesses reflect that there are still ambiguous regulations that are interpreted differently, and complicated administrative procedures. Difficulties in obtaining licenses and approvals.

Challenges mentioned in the previous survey such as visas and work permits for foreign workers, inconsistencies between levels of government... still remain.

Therefore, the European business community believes that in order to attract more FDI and stimulate economic growth, administrative processes and procedures need to be further streamlined and legal clarity enhanced. In addition, Vietnam needs to develop core infrastructure, simplify visa and work permit procedures...

Mr. Dominik Meichle, Chairman of EuroCham Vietnam, shared: "Vietnam's economic potential is undeniable, and the European business community remains confident in Vietnam's long-term growth.

While our survey points to areas for improvement, we believe that by working together to address administrative and regulatory barriers, we can create a more efficient and attractive business environment."

The survey also found a growing commitment to sustainability, with 7% of businesses having achieved carbon neutrality and 37% aiming to do so by or before 2050. However, they also pointed to obstacles such as high costs and a lack of government incentives.

The BCI, conducted by Decision Lab and surveying 1,400 EuroCham members, is an important gauge of sentiment among European businesses in Vietnam.

This report provides insights into the dynamic business environment of one of Southeast Asia's most attractive markets.

Source: https://tuoitre.vn/eurocham-thu-tuc-hanh-chinh-can-tro-niem-tin-kinh-doanh-tai-viet-nam-20240715103432835.htm