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European companies optimistic about their future in Vietnam

Staff writer ▼ | June 18, 2014
European companies have expressed more confidence about Vietnam's business climate given that the EU-Vietnam Free Trade Agreement (FTA) is set to be concluded later this year, a survey shows.
Vietnam
VietnamEuropean companies have expressed more confidence about Vietnam's business climate given that the EU-Vietnam Free Trade Agreement (FTA) is set to be concluded later this year, a survey shows.


The European Chamber of Commerce in Vietnam (EuroCham) said its latest quarterly Business Climate Index survey, conducted last month, showed the index has risen to 66 from last quarter's 59.

"A further increase by 7 points seems to underline the findings of last quarter's survey. Our members have a strong belief in the Vietnamese market and are very hopeful of a strong implementable FTA," Nicola Connolly, chairwoman of EuroCham, said. "We will continue to work with the Vietnamese government and the European Union to ensure that the final agreement will provide practical benefits for our members in the years to come."

Half of EuroCham members expect that trade would be the most beneficial sector from the agreement. Thirty three percent point out manufacture and 10 percent say services.

The improved positive sentiment of European firms is linked not only to the ongoing trade negotiations, such as EU-Vietnam FTA, but also the creation of ASEAN Economic Community in 2015, according to the survey.

In line with the creation of an ASEAN Economic Community, the survey asked respondents to evaluate Vietnam's competitiveness against other ASEAN countries across a number of different criteria.

According to the findings, competitive labor costs were perceived as a key reason for European companies to settle their businesses in Vietnam.

On the other hand, a comparatively high percentage of the respondents assessed Vietnam as being less competitive in terms of infrastructure (75 percent) and legal/administrative system (80 percent).


 

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