Vietnam: A Leading Investment Destination with a Bright Outlook for the Future
In a recent dialogue with Prime Minister Pham Minh Chinh, focused on strengthening EU-Vietnam trade and investment relations, EU Ambassador to Vietnam, Julien Guerrier, highlighted the impressive bilateral trade value between the EU and Vietnam, surpassing US$68 billion in 2024. This growth is, in large part, attributed to the EU-Vietnam Free Trade Agreement (EVFTA), which has played a pivotal role in fostering economic ties between the two regions.
Ambassador Guerrier emphasized that the full and effective implementation of the EVFTA will serve as a solid foundation for the EU and Vietnam to build upon their partnership. This development underscores the importance of Vietnam’s continued efforts to enhance its investment environment. This includes maintaining clear, predictable, and consistently applied regulations, as well as streamlined decision-making processes, to ensure a stable and attractive business climate for investors.
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| EU businesses have expressed their confidence in Vietnam’s market potential and recommend further enhancements to administrative procedures to facilitate trade and investment. Photo: VNA |
The EU remains committed to ensuring the swift ratification of the EU-Vietnam Investment Protection Agreement (EVIPA), recognizing the importance of providing a stable and predictable investment environment for businesses. Additionally, the EU applauds Vietnam’s ongoing administrative reforms and the leadership’s determination to expedite decision-making, reduce business costs, and simplify investment procedures, all of which contribute to a more conducive business environment.
Ambassador Guerrier reaffirmed the EU’s support for Vietnam’s green transition and economic modernization journey. He emphasized the significance of regulatory transparency and alignment with international standards to unlock the full potential of trade and investment between the EU and Vietnam. Furthermore, he highlighted Europe’s eagerness to expand investment, transfer technology, and create more opportunities for collaboration in Vietnam.
Bruno Jaspaert, Chairman of EuroCham Vietnam, drew an insightful analogy to illustrate the importance of a robust legal framework. He likened Vietnam’s legal framework to the strong foundation of houses in Hai Phong that withstood Super Typhoon Yagi. By simplifying administrative procedures and reducing legal burdens, Vietnam not only attracts investment but also builds a resilient economy capable of weathering economic storms.
Vietnam’s Commitment to Continuous Improvement of the Investment Environment
According to the EuroCham Business Confidence Index (BCI), 75 percent of European businesses view Vietnam as an attractive investment destination. However, EuroCham also acknowledges the challenges faced by European businesses operating in the country. One pressing concern is the implementation of Extended Producer Responsibility (EPR) regulations, for which clearer guidelines are needed to ensure effective compliance by businesses.
Nguyen Hai Minh, Vice Chairman of EuroCham Vietnam, noted that Circular 07/2025 provides much-needed clarity on cost structures and compliance deadlines related to EPR. However, businesses have expressed concerns about the potential impact of special consumption tax and global minimum tax policies. They have proposed reasonable tax policies to help Vietnam maintain its competitive advantage in the region and continue attracting investment.
Another critical legal issue is the on-site import-export regulations, which businesses have identified as a bottleneck in their operations and long-term investment strategies. Addressing this issue would not only liberalize trade flows but also position Vietnam as a prominent logistics hub in the region, on par with Singapore. Additionally, improving customs procedures and minimizing supply chain disruptions are crucial for enhancing export-import efficiency and logistics operations.
| To maintain its competitive edge, EuroCham has put forward three key recommendations for Vietnam: 1) Reduce regulatory burdens to create a more business-friendly environment; 2) Standardize business registration and investment licensing processes across the country; and 3) Simplify work permit procedures to attract international talent, while also harmonizing visa regulations with all EU member states. |
Vietnam’s commitment to enhancing its investment environment, coupled with its favorable trade agreements and growing economic stability, solidify its position as a leading investment destination. These improvements will not only attract more foreign investment but also contribute to the country’s long-term economic prosperity and sustainability.
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