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EU foreign direct investment in Vietnam will increase by the end of 2023

The quarterly Business Confidence Index (BCI) of the European Chamber (EuroCham) of Commerce in Vietnam shows that more than half of those surveyed predict increasing foreign direct investment in Vietnam when 2023 is almost over.

According to a report on the implementation of the Free Trade Agreement between Vietnam and the European Union (EVFTA) recently submitted to the National Assembly by the Government, the capital scale of investors from the European Union (EU) ) into Vietnam is showing a strong upward trend.

In 2022, the EU has 146 newly licensed investment projects in Vietnam, although there is a slight decrease compared to 2021 (down 12 projects), however, the capital scale increases. Accordingly, newly registered capital in 2022 will reach 15 billion USD (an increase of 13 billion USD compared to 2021). Total registered capital also reached 24 billion USD (an increase of 10 billion USD compared to 2021).

Among EU countries investing in Vietnam, 11/26 EU countries recorded an increase in investment capital, specifically Denmark (increased by 1,307 million USD), France (increased by 35 million USD), and Luxembourg (increased by 34 million USD). ) and Sweden (up to 26 million USD). Among the EU countries with the largest decrease in investment capital, the Netherlands (down 755 million USD) and Germany (down 27 million USD) are included.

There are 5 industry groups that the EU invests the most in Vietnam: the processing and manufacturing industry; Wholesale and retail; repairing cars, motorbikes, and motorbikes; professional activities, science and technology; information and communication; education and training.

The latest Business Confidence Index (BCI) conducted by the European Chamber of Commerce in Vietnam (EuroCham) and Decision Lab clearly shows that Vietnam's global investment attractiveness remains strong. Accordingly, 63% of surveyed businesses ranked Vietnam in the top 10 FDI destinations.

"The confidence index in Q3 2023 increased to 45.1, from 43.5 in the previous quarter. Although the number remained below 50 points for four consecutive quarters, this small increase showed a sign positive in the economy", the governor called from BCI.

EuroCham Chairman Gabor Fluit, commenting on BCI, said: “Nearly a third of our members rank Vietnam as one of the top three investment destinations sending a strong message of our confidence in this partnership.”

Mr. Gabor Fluit also said that the connection between European and Vietnamese companies on sustainable goals is commendable and key. This common commitment will be emphasized at EuroCham's 2023 Green Economy Forum on November 2. This is an opportunity to discuss actionable pathways towards a greener future.

 Noteworthy, 31% ranked Vietnam in the top 3, of which an impressive 16% praised Vietnam as the top investment destination attracting FDI. To further strengthen this belief, more than half of those surveyed predict to increase in foreign direct investment in Vietnam as 2023 nears the end.

However, obstacles still exist, with 59% of the surveyed saying that administrative difficulties are the main challenge when operating in Vietnam. Other obstacles such as uncertainty in rules and regulations, barriers to obtaining permits, and strict visa and work permit requirements for foreign workers are also highlights.

To improve the country's FDI attraction, 58% of people surveyed believe that streamlining the cumbersome apparatus is the most important factor, 48% support strengthening the legal environment, 1/3 call for upgrading transportation infrastructure and 22% emphasize easing visa and work permit requirements for foreign professionals.

Sustainability is increasingly becoming a top priority for European companies in Vietnam, with 80% saying ESG compliance is highly or moderately important.

However, there are still major obstacles when it comes to turning priorities into reality. Regulatory uncertainty, infrastructure gaps, and inadequate government support are cited as obstacles to implementing sustainable measures locally.

In addition, only 20% of businesses are proactively preparing for upcoming EU green regulations, such as the Carbon Border Adjustment Mechanism. Meanwhile, 38% currently have no plans to affiliate. This lack o

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