The potential for European investment in Vietnam has yet to be fully realized, but current trends indicate progress in the coming year and beyond.
EuroCham Vietnam is set to unveil its annual whitebook on January 16, presenting a comprehensive set of recommendations focused on enhancing investment in Vietnam to promote a green and sustainable economy.
Despite garnering significant attention in Vietnam, European investment falls short of expectations. Ministry of Planning and Investment statistics reveal that in 2023, EU member countries collectively invested approximately $2 billion in Vietnam, a decrease from over $2.45 billion in 2022.
Persistent administrative and bureaucratic inefficiencies remain the primary obstacles, despite the implementation of various legislative measures over the past five years aimed at business environment reform and competitiveness enhancement.
Nevertheless, significant ventures led by European groups continue to materialize or gain momentum in Vietnam.
High-tech and green investments have emerged as prominent trends among European companies in Vietnam. In November, BE Semiconductor Industries from the Netherlands received licensing for nearly $5 million in the initial phase of manufacturing semiconductor equipment components at the SHTP.
Globally, economic activity has been sluggish since 2019 due to the pandemic and geopolitical uncertainty. The West’s focus on diversifying supply chains has positioned Vietnam as a favorable destination in the region.
Key sectors for investments include renewable energy, seaports, semiconductors, vehicles, electronics, footwear, textiles, coffee, pharmaceuticals, and food processing.
According to EuroCham, representing the interests of over 1,000 businesses, the growth of Vietnam’s middle class has significantly boosted consumer spending. This upward trend is anticipated to persist for decades.
European investors are capitalizing on this trend by investing in food and beverages, retail, fashion, and services. With Vietnam’s skilled workforce and competitive production costs, European investors are also drawn to high-tech manufacturing sectors such as electronics, precision engineering, and advanced materials.