European businesses maintain confidence in Vietnam's prospects
(Chinhphu.vn) - Although the Business Confidence Index (BCI) in the second quarter of 2025 decreased slightly, the European business community still has strong confidence in the long-term prospects in Vietnam. The investment picture appears cautious but optimistic, requiring more substantial and consistent administrative reforms.
Báo Chính Phủ•30/06/2025
BCI Confidence Index Q2/2025
European businesses: Optimistic amid manyunpredictable challenges
The BCI index announced by the European Chamber of Commerce in Vietnam (EuroCham) on June 30, 2025 reached 61.1 - a slight decrease compared to the first quarter. However, the general trend still reflects the perseverance and long-term trust of European enterprises in Vietnam, despite the volatile global context.
Mr. Bruno Jaspaert, Chairman of EuroCham said: Nearly 72% of European business leaders are willing to introduce Vietnam as an investment destination. This number shows the steadfast belief in Vietnam's investment environment.
The report also found that most businesses remained financially stable, despite international trade being affected by multiple risk factors such as US reciprocal tariffs, supply chain tensions and geopolitical volatility. Only 15% of businesses reported negative financial impacts, while 70% reported no apparent impact and 5% reported profits.
One factor that businesses consider to be particularly important in the current trade environment is the certificate of origin (C/O). This is not only a tool to access tariff preferences but also demonstrates the level of compliance and reputation in the global supply chain.
According to the BCI survey, up to 56% of enterprises - mainly large corporations - submitted C/O documents monthly. Of these, 5% received C/O within 24 hours, 12% reported delays lasting more than a week.
Previously, from May 5, 2025, the Ministry of Industry and Trade officially took over the C/O issuance process and promoted digital transformation. This move was positively evaluated by the business community, helping to cut down procedures and increase transparency.
"Digital transformation is a strategic step, helping Vietnam position itself as a reliable trade partner. Certificates of origin are a symbol of trust and prestige in target markets," Mr. Jaspaert emphasized.
Businessesneed transparent and stable policies.
The BCI report for the second quarter shows a moderately optimistic trend. 78% of businesses expect business conditions to improve over the next five years, up 7 percentage points from the first quarter.
However, in the short term, the confidence in economic stability in the third quarter of 2025 has dropped to 50%. According to Mr. Thue Quist Thomasen, CEO of Decision Lab, this is not a pessimistic signal but reflects a cautious attitude in the context of global fluctuations.
39% of businesses maintain a neutral view, 43% are positive, and only 11% forecast a gloomy outlook. Stable economic growth, a young population, and a wide network of trade agreements are still factors that maintain confidence in Vietnam's long-term attractiveness.
Despite progress on macro-level reforms, European businesses still face many difficulties in the implementation process. Administrative burdens were identified by 63% of businesses as the top obstacle. Difficulties related to inconsistent law enforcement (44%), complicated customs procedures (34%), work permit procedures (33%)… also continue to exist.
Notably, the lack of a suitable mechanism for foreign legal representatives in registering VNeID accounts is an example of a technical problem that needs to be resolved soon.
"Reform cannot stop at cutting paperwork. It is necessary to build a transparent and predictable legal framework, along with effective coordination between competent authorities," shared the Chairman of EuroCham.
After five years of implementation, the Vietnam – EU Free Trade Agreement (EVFTA) is showing positive results. 66% of businesses participating in the BCI survey said they are participating in trade or supply chain activities related to EVFTA.
According to Mr. Jaspaert, up to 98.2% of enterprises have known about EVFTA, nearly half reported medium to high business benefits. Large corporations often record clearer benefits, especially from the EU's exports to Vietnam. Meanwhile, small and medium enterprises play a role in promoting two-way trade.
The proportion of enterprises identifying tariff incentives as outstanding benefits increased sharply from 29% (Q2/2024) to 61% (Q2/2025). Total Vietnam-EU trade turnover has increased by 40% since 2020. Among the 21% of enterprises that could quantify profits, the average increase was 8.7%, with some reaching 25%.
In addition to the advantages, EuroCham also frankly pointed out the remaining barriers to fully exploiting the EVFTA. Accordingly, 37% of enterprises identified customs valuation as the biggest challenge - due to differences in goods classification between Vietnam and the EU. Unclear legal issues and limited communication with local authorities also affect the utilization of the agreement.
Solutions proposed by businesses include: simplifying imports, increasing the application of digital technology, allowing self-certification of origin mechanisms, and more consistent customs enforcement guidelines.
So,BCI Q2/2025 continues to affirm that Vietnam is the top destination in the eyes of European investors. However, maintaining this confidence requires continuous reform and substantive response to recommendations from businesses.
"European businesses know exactly what they need: simplified procedures, harmonized regulations, convenient work permits, tax refunds and transparent customs procedures. With a strong commitment to reform, Vietnam can become a strategic investment hub in the region," the EuroCham Chairman emphasized.
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