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| Inside the ABB factory in Vietnam (Photo: baodautu.vn) |
Hanoi (VNA) – European investments are expected to pick up in Vietnam following Prime Minister Pham Minh Chinh’s engagement with Czech and Polish enterprises as part of his trip to Europe to attend the 55th Annual Meeting of the World Economic Forum.
The Czech Republic registered over 91 million USD in 41 projects in Vietnam while Poland funneled 474 million USD into 33 projects in the country as of the end of 2024. Those are humble figures given the potential and strengths of each side.
However, recent developments indicate a positive trend. During a meeting with PM Chinh in Prague, Klaus Zellmer, Chairman of the Board of Management of Skoda Auto - the largest automobile manufacturer in the Czech Republic - revealed that Skoda and Thanh Cong Group (Vietnam) are working on the construction of an auto manufacturing and assembly facility in Quang Ninh province, Skoda’s first plant in Southeast Asia, with a total investment of 500 million USD. It is expected to be completed in the first quarter of 2025 while two models will be introduced to the market the same year.
Vietnam boasts potential to become Skoda’s auto manufacturing and export hub in ASEAN and other markets, Zellmer said, describing the country as an important gateway for his enterprises to access the ASEAN market.
Similarly, Pavel Tykac, owner of Sev.en Global Investments, told the Vietnamese Government leader that is finalising its acquisition of a 70% stake in the Mong Duong 2 Thermal Power Plant. The power plant was invested at 2 billion USD and has been operational for a decade.
Other corporations like PPF Group, present in Vietnam with Home Credit brand, and Adamed Pharma, have expressed their interest to expand their business in Vietnam.
European business leaders are increasingly optimistic about the economic prospects of Vietnam whose position as a crucial link in Southeast Asia continues strengthening despite a turbulent global landscape, according to the Q4 2024 Business Confidence Index (BCI) report released by the European Chamber of Commerce in Vietnam (EuroCham Vietnam) earlier this month.
The BCI score surged from 46.3 in Q4 2023 to 61.8 in Q4 2024, reflecting a positive sentiment in both current and future outlooks while demonstrating Vietnam’s extraordinary resilience amidst ongoing operational hurdles and global economic uncertainties.
The report said the country’s strong performance is attributed to its continued growth trajectory, improving infrastructure, and emergence as a regional hub for both trade and investment.
For much of the past two years, the BCI hovered around the neutral midpoint of 50, dipping below it on occasions. The Q4 2024 report, however, marks a pivotal shift as the score reached its highest level since early 2022.
The report revealed that 75% of survey respondents indicated they would recommend Vietnam as an investment destination. This data underscores the growing recognition of Vietnam’s strategic importance as an investment hub in Southeast Asia. With its strong growth rates and expanding infrastructure, Vietnam has positioned itself as an attractive destination for European businesses looking to expand in the region.
Bruo Jaspaert, EuroCham Vietnam Chairman, said the clear rise in sentiment reflects a broader recognition of the country’s ongoing political and economic transformation it has seen over the past years. Despite global challenges, Vietnam’s positive investment climate is creating new opportunities for European companies, especially in key sectors like technology, manufacturing, tourism and renewable energy.
However, EuroCham Vietnam experts highlighted operational challenges continue to be a significant concern for European business in the country, with top three obstacles being administrative burdens, unclear regulations, and difficulties in obtaining licences and permits.
Addressing these obstacles will be crucial for sustaining investment momentum.
The upcoming ratification of the EU-Vietnam Investment Protection Agreement (EVIPA) is expected to further facilitate investment flows.
As part of PM Chinh’s tour, Vietnam and the Czech Republic elevated their bilateral ties to a strategic partnership, with Czech President Petr Pavel pledging to encourage other European countries to expedite EVIPA ratification. The move is expected to bolster the investment cooperation between Vietnam and Europe./.
