Improve business investment environment to catch up the new trends

VCN - According to Mr Nguyen Hai Minh, Vice President of the European Chamber of Commerce in Vietnam (EuroCham), member of the Advisory Council for Administrative Procedure Reform of the Prime Minister, and Deputy General Director of Mazars Vietnam, the business investment environment needs to be greatly improved to meet the new trends of foreign investors.
Mr. Nguyen Hai Minh.
Mr. Nguyen Hai Minh.

How do you assess the advantages and disadvantages of European businesses in Vietnam with the difficulties persisting into 2023?

Currently, Vietnam is a fairly stable business environment; when European businesses are compared with the current changes in the world and the region, they have a certain level of confidence and optimism about the business environment in Vietnam. In EuroCham's BCI business environment survey index for the third quarter of 2022, there was a decline, but it was very slight, so in theory, it reflects other negative developments globally and does not reflect the internal difficulties of Vietnam.

However, due to global negatives, European businesses in Vietnam suffer from the general difficulties of the whole group. For example, it's about inflation, supply chain problems or the problem between Russia and Ukraine. In addition, exporting European enterprises in Vietnam to serve the group's activities will face difficulties in terms of the market. On the other hand, some other enterprises are facing difficulties in the business environment and the institution in Vietnam, such as difficulties and barriers related to workers, work permits or other difficulties with administrative procedures, especially high-quality human resources.

How do European and Vietnamese businesses need to cooperate and connect in such a context?

As soon as Vietnam started reopening its economy, we saw waves of positive investment surveys and decision-making from the European Union. Many survey teams and business delegations visited Vietnam and worked with stakeholders to make investment decisions as soon as possible. However, rather unexpected developments around the globe, especially issues in Ukraine, have caused certain difficulties in upcoming investment decisions.

But European businesses in Vietnam are always encouraged to work and cooperate with Vietnamese businesses more. However, at present, the connectivity between Vietnamese enterprises and European enterprises is not high enough due to many limitations of Vietnamese enterprises in terms of governance, scale and technology.

We hope that European and Vietnamese enterprises can cooperate more and apply advanced practices in the coming time. In particular, the effects of the Free Trade Agreement between the European Union and Vietnam (EVFTA) have been very positive, mainly in the aspect of import and export. It is necessary to promote further investment and cohesion between businesses of the two sides and enhance competitiveness for both sides.

Currently, the investment trend from Europe to Vietnam is very diverse. Accordingly, European corporations are looking to diversify their supply chains, and of course, Vietnam is a destination considered by European investment groups in Asia. In addition, European businesses tend to invest in infrastructure, including energy infrastructure, especially renewable energy, along with investment in road, railway and seaport transport infrastructure. Moreover, European businesses also want to invest in establishing research and development centres and start-up innovation in Vietnam. Therefore, Vietnam needs to improve a lot in terms of investment and business environment, from being more transparent, applying international standards in bidding, in project investment allocation, promoting investment application in the form of public-private partnerships... as well as drastic transformation to meet and anticipate new trends.

How do you evaluate the Government's support policies in the current and upcoming difficult period?

During the time affected by the Covid-19 pandemic and now, the Vietnamese Government has taken many actions to support businesses, especially in terms of both financial support and related policy support investment and trade. For European businesses, another advantage compared to Vietnamese enterprises is that they have stronger financial potential, so European businesses always propose the Government's support policies in favour of improving the business environment, including trade facilitation so that import and export trade between the two regions can achieve progress in the coming time.

Why do European businesses need more to improve the business environment but not financial or investment policies, sir?

EuroCham's BCI survey recently showed that the top priority for European businesses is that Vietnam needs to improve and be consistent in administrative procedures. However, other factors in terms of human resources, infrastructure, etc., and especially tax incentives, have always been a low level of concern for European businesses. The reason is that European businesses always want a transparent and favourable investment environment to be able to do business most effectively.

According to the survey, about 55% of EuroCham members said Vietnam has significantly improved its ability to attract and maintain FDI. Although Vietnam is a developing economy, the Government has made great efforts and determination to pursue the prospect of a green growth economy. Therefore, nearly 90% of Eurocham members wish that Vietnam should strengthen green economic development, considering the green economy as a driving force to attract FDI.

Thank you very much!

By Binhnam (recorded)/Quynhlan

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