Photo: congthuong.vn

According to the latest Business Climate Index (BCI) report conducted by the European Chamber of Commerce in Vietnam (EuroCham) and Decision Lab, European business leaders realize that the Vietnam's economy has made certain improvements but still maintains a cautious attitude.

EuroCham said that BCI - the leading indicator of the European business and investment community in Vietnam - kept a stable level of 48.0 points in the first quarter of 2023.

Although the index remains flat compared with the end of 2022, there are already promising signs of a positive change in the economic outlook of the European business community.

An encouraging point is that the business environment outlook for 2023 is showing expected signs of improvement. Specifically, the number of people who are optimistic about the national economy has increased by 8 points, showing growing confidence in the economic outlook.

Similarly, according to a report from EuroCham, it is worth noting that the number of survey respondents predicting that the economy will be stable and developed has increased. According to the survey, the number of individuals predicting a recession fell by 6%, while the number of people predicting an improvement in sales and orders rose 7%.

The report assesses that, through a series of strategic initiatives to improve the business environment, Vietnam has emerged as a leading destination for foreign investment as well as domestic enterprises.

Based on feedback from survey participants, regulatory simplification, sustainable development measures, investment incentives, and workforce development programs play an important role in enabling fundamental condition for long-term economic success.

The survey results also show that the European business community and investors are satisfied with the level of interest policy makers have towards business needs in Vietnam, with a third of respondents expressing significant or moderate satisfaction. "This positive response is testament to the government's unwavering commitment to promoting a business-friendly environment", the report states.

Notably, the report shows that Vietnam is still a destination to strongly attract foreign direct investment (FDI) with European business leaders, with more than 3% of leaders considering Vietnam as one of their three investment destinations worldwide.

Overall, 36% of survey respondents ranked Vietnam in first place, in their top 3 or in their top 5 investment destinations globally.

However, foreign businesses in Vietnam are still struggling with issues such as lack of transparency in regulations, ineffective administration, difficulties in obtaining visas and work permits. It can be seen that the number of survey respondents who point out inadequacies in the anti-corruption law tends to increase.

Another barrier for the manufacturing sector is complicated customs procedures, while service companies face major challenges in terms of visas and work permits. Moreover, many industries, such as transportation, pharmaceuticals and renewable energy, are also hampered by incomplete anti-corruption laws.

BCI survey participants emphasized: It is necessary to improve political stability, legal framework, tax and tariff regimes to increase the attractiveness of Vietnam as a dynamic investment destination. These measures will help address the concerns of foreign businesses and strengthen investors' confidence in the country's economic prospects.

In terms of tourism, F&B and renewable energy, according to the report, survey respondents expect tourism to be one of the top three sectors poised for growth in the second quarter of 2023, with 38% of respondents said that this is an industry with high growth potential.

This is likely due to the tourist boom and upcoming tourist visa reforms. Additionally, 21% of survey respondents identified F&B and renewable energy as areas where they expect to grow during the same period.

Vietnam is still an attractive destination for foreign businesses. Photo: thuongtruong

In addition, the report also highlights the importance of talent development programs in Vietnam. Although the country has abundant human resources, only a third of the leaders surveyed expressed satisfaction with the availability and quality of Vietnamese customers.

"Investing in talent development initiatives is a way to help Vietnam enhance its attractiveness as an FDI destination, and build a sustainable competitive advantage in the global market," the report said.

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