Hanoi, January 9, 2025 – The Europe Today: The Business Confidence Index (BCI) of European businesses in Vietnam surged to 61.8 in Q4 2024, its highest level since early 2022, according to the latest report by the European Chamber of Commerce in Vietnam (EuroCham Vietnam). This significant rise marks a pivotal shift in sentiment from neutral to positive, reflecting resilience amid global economic, environmental, and geopolitical challenges.
The BCI, based on surveys conducted by Decision Lab, highlights Vietnam’s continued growth trajectory, improving infrastructure, and its emergence as a regional trade and investment hub. Compared to the Q4 2023 score of 46.3, this latest result underscores increasing optimism among European businesses regarding Việt Nam’s economic prospects.
Optimism in Current and Future Outlooks
The survey revealed that 42% of respondents view the current business climate positively, with 47% anticipating similar conditions in the upcoming quarter. Furthermore, 56% of respondents expect Vietnam’s macroeconomic outlook to improve in Q1 2025.
“This rise in sentiment reflects a broader recognition of Việt Nam’s ongoing political and economic transformation,” said Bruno Jaspaert, Chairman of EuroCham Vietnam. “The country’s GDP growth confirms its position as a central player in Southeast Asian trade and investment.”
Drivers of Confidence: Economic Reforms and Sustainability
Vietnam’s ongoing economic reforms and its pivotal role in the global shift toward sustainability have been identified as key drivers of this optimism. Many respondents highlighted the “double transformation” of digital and green transitions as critical to their growth, with some reporting revenue increases of up to 40% compared to the previous year.
Government policies promoting sustainability and global pressures to adopt environmentally friendly practices have significantly influenced business strategies across sectors.
Rising Interest in Investment
Notably, 75% of survey respondents stated they would recommend Vietnam as an investment destination. This reflects the country’s growing appeal as a hub for European businesses seeking expansion in Southeast Asia. Key sectors attracting interest include technology, manufacturing, tourism, and renewable energy.
“A significant portion of businesses indicated plans to expand their operations in Vietnam,” said Thue Quist Thomasen, CEO of Decision Lab. “Around 30% are looking to increase import/export activities or shift production to Vietnam, aligning with the country’s strategic geopolitical positioning amid global supply chain disruptions.”
Challenges Remain
Despite the positive sentiment, European businesses in Vietnam continue to face operational challenges. Administrative burdens, unclear regulations, and difficulties in obtaining licences and permits were cited as the top obstacles.
Visa requirements for foreign workers and experts emerged as a key concern, with 42% of respondents identifying it as a significant issue. Tax-related complexities, such as VAT refunds, and challenges related to import/export procedures and investment registration, were also highlighted.
“Vietnam is at a critical juncture,” Jaspaert noted. “While operational challenges persist, the government’s determination to improve the business environment is evident. Initiatives like the steering committee for government restructuring show promise. EuroCham remains committed to contributing best practices and actionable recommendations to address these issues.”
Outlook for 2025
As global economic and political uncertainties persist, Vietnam’s resilience continues to shine. With its robust economic foundations and proactive policies, the country is poised to strengthen its position as a key player in Southeast Asia. European businesses remain optimistic about Vietnam’s potential, paving the way for deeper collaboration and growth in the years ahead.
