European businesses have confidence in Vietnam's economy

According to the EuroCham President, Vietnam's resilient and flexible economy has instilled confidence in European businesses, leading to increased investment.

Gabor Fluit, President of the European Chamber of Commerce (EuroCham) in Vietnam, said that European investment in Vietnam has not decreased despite the complex global economic situation. Most recently, Nestlé Vietnam announced a $100 million expansion plan.

"This underscores the confidence of European businesses in Vietnam," he said at the launch of the annual White Paper on January 16.

The EuroCham Business Confidence Index report previously also assessed Vietnam as a rising star attracting global investment. The confidence and satisfaction of European businesses operating in this market showed signs of improvement in the last quarter of 2023.

However, Mr. Gabor Fluit also noted that 2024 will present many challenges. Although Vietnam is expected to lead in GDP growth, the economic environment may not be as favorable as before 2020. EuroCham predicts challenges such as slowing exports and imports, the complexity of supply chains, and other unforeseen difficulties.

EuroCham President Gabor Fluit speaks at the White Paper launch on January 16. Photo: EuroCham — EuroCham President Gabor Fluit speaks at the White Paper launch on January 16. Photo: *EuroCham*

This association argues that the key to supporting businesses at this time is adaptive policies – that is, regularly adjusting strategies to suit the context. Vietnam can position itself to take advantage of many future opportunities.

Accordingly, European businesses have compiled and put forward numerous proposals and recommendations in dozens of business and investment areas, which are outlined in the White Paper.

For example, regarding the real estate sector, EuroCham suggests that Vietnam needs to issue regulations with specific standards and guidelines, specifying land use durations for apartments, houses, and hotel/office buildings. Vietnam also needs policies to protect investors in case real estate development companies become insolvent or go bankrupt. Regarding foreign ownership, a list of projects where foreign ownership is prohibited should be issued, while other projects would grant land use rights certificates to foreigners who have purchased properties in Vietnam.

The construction sector also recommended simplifying the equipment certification process to avoid project delays; and unifying policies to allow for the rapid verification of fire-fighting materials. Last year, fire safety regulations caused many difficulties and obstacles for both domestic and FDI manufacturing businesses.

Regarding mergers and acquisitions, EuroCham has made several suggestions, including: considering excluding internal corporate restructuring from the merger control regime; increasing the value of the thresholds under the merger control regulations that give rise to transactions requiring notification; and clarifying the provisions of competition and antitrust laws to establish clear and firm thresholds for investments in Vietnam.

The White Paper also outlines strategies and opens up new trade and investment opportunities in Vietnam, such as semiconductor equipment, renewable energy, and green growth.

Providing further information on administrative procedure reform, a matter of concern for FDI enterprises, Mr. Ngo Hai Phan, Director of the Department of Administrative Procedure Control, Government Office , stated that in 2023, 628 regulations in 53 legal documents were reduced. He said that in 2024, at least 20% of internal administrative procedures and 20% of compliance costs will be reduced and simplified.

He also suggested that associations compile difficulties and obstacles related to business policies and send them to the Government Office; as well as actively contribute opinions on regulations and administrative procedures that are expected to be issued.

Duc Minh

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