According to statistics, the EU is currently the 5th largest foreign investor in Vietnam with total capital accumulated as of August 2022 of USD 27.6 billion. In the first eight months of 2022, the total capital of EU investments in Vietnam reached USD 2.2 billion, up 69.6% from the same period last year, with 104 new projects.

ATTRACT QUALITY INVESTMENT LINES

Nguyen Anh Duong, Head of the General Research Department (Central Institute for Economic Management – ​​CIEM) said at the seminar “Using benefits from EU imports and investment in the EVFTA” on December 6 that since the EU-Vietnam Free Trade Agreement ( EVFTA ) was implemented, the inflow of newly registered investment capital from the EU area into the Vietnamese market has increased significantly.

This increase is reflected not only in the total capital, but also in the average size of the projects. The average capital size of newly registered projects from the EU has tended to increase in recent years and is above the general average at around 12 million/project and compared to the previous period there are EVFTAs.

“EVFTA has helped attract more high-quality investment capital to Vietnam, in line with the Politburo’s policy following the publication of Resolution 50 in 2019 on New Directions for Attracting Foreign Investment, Combined with Reviewing and Focusing on Attracting High-Quality Projects” , stressed Mr. Duong.

In addition, additional capital from the EU comes not only from investment capital, but also from support through the government channel with the government. The European Union and EU member state governments have provided technical assistance to help Vietnam improve its capacities and meet trade and investment standards that the EU requires.

EU support in skills transfer has also helped Vietnamese companies and authorities to steer their behavior in a more compatible and modern direction.

Ms. Dao Thu Trang, Head of Market Development Strategy Consulting Department, German Chamber of Commerce and Industry in Vietnam, also said that the German business community in Vietnam always regards Vietnam as a full-fledged investment environment. Since March 15, 12 large and small projects by German companies have applied for investment licenses in Vietnam.

German companies want to invest in Vietnam in the fields of manufacturing, high technology, green energy, renewable energy, IT, software development, food, beverage and electronics industries and especially in the field of medicine and healthcare.

It is worth mentioning that German investors always want to work with local companies and increase the localization percentage of their products made in Vietnam not to 4-5%, but to 4-5% up to 30%.

On the other hand, German companies are always willing to cooperate, exchange technologies, combine training with native human resources to help them qualify to Federal Republic of Germany standards. At the same time, it helps Vietnamese companies to boost production, speed up the modernization process and apply modern production technologies according to German standards in order to improve competitiveness and grow from their own resources.

INCREASE THE BENEFITS OF EU FDI

Mr Duong said Vietnam has many opportunities to attract investment capital from EU companies. This is the trend with investors migrating from the EU to Southeast Asian countries, including Vietnam.

In addition, Vietnam has many advantages as a market with many networks of free trade agreements with other partners… This will be a plus for EU investors to come to Vietnam to benefit from tax incentives and investment incentives from which to export to other markets.

In addition, EU investment trends are associated with sustainable development standards. The EU does not give more importance to the low-cost or low-tech story than to the story of meeting customer needs. It is a story of consciousness linked to sustainable development, linked to sustainable consumption and sustainable production.

Therefore, in order to attract foreign investment from the EU, in addition to an open business environment, Vietnam must meet the EU’s strict standards for sustainable development.

According to Mr. Duong, the role of ministries, sectors and trade associations in exchanging best practices to meet emerging trends from EU investors is very important. At the same time, we need to create an ecosystem for businesses and investors to operate in the EU.

Ms. Dao Thu Trang noted that in order to increase EU investment in Vietnam, Vietnam’s managing authorities need to strengthen the effectiveness of the implementation of the agreement and develop and amend relevant legal documents to encourage EU investment in Vietnam.

At the same time, improving the competitiveness of local and Vietnamese companies and prioritizing the development of reputable and sustainable supply chains will help EU investors, especially German companies, to achieve their goals. The goal is to increase the domestic share up to 30%.

From a state perspective, the Vietnamese government has strategies and guidelines for developing qualified human resources to help German companies and European investors to feel secure in their development in the long-term and sustainable in the Vietnamese market.

Promote investments in infrastructure, reduce logistics costs and thus also help German and European companies to reduce production costs.

Finally, Vietnam needs to promote the development of green energy, energy-efficient, environment-friendly industries and technologies so that it can meet investment needs, requirements and regulations. EU regulations on exports from Vietnam.