On June 30, the European Chamber of Commerce in Vietnam (EuroCham) officially released its Q2 2025 Business Confidence Index (BCI) report, reflecting strong confidence among European companies in Vietnam’s long-term economic potential.

European firms maintain faith in Vietnam’s investment environment

This quarter’s BCI report offers important insights into the shifting trade and investment climate in Vietnam. From concerns over retaliatory tariffs and administrative burdens to the practical impacts of the EU-Vietnam Free Trade Agreement (EVFTA), the findings highlight both opportunities and challenges shaping European investors’ strategies.

The BCI stood at 61.1 this quarter, a slight dip from Q1 amid rising global uncertainty. Nevertheless, cautious optimism persists, with European businesses in Vietnam demonstrating resilience and adaptability.

EuroCham Chairman Bruno Jaspaert emphasized that European firms continue to believe in Vietnam’s investment environment. Nearly 72% of executives surveyed said they would recommend Vietnam as an investment location, consistent with recent BCI trends. This reflects deep-rooted trust in Vietnam’s long-term growth prospects.

EuroCham’s report also underscores that despite complex global market fluctuations, European investor confidence in Vietnam remains firm.

Efforts to streamline trade processes are gradually reinforcing this confidence. Notably, 78% of surveyed firms expect improved business conditions over the next five years, up 7 percentage points from Q1 - signaling steady belief in Vietnam’s structural growth potential despite short-term challenges.

Amid escalating global trade tensions and supply chain risks, European companies have continued to recognize Vietnam’s resilience.

European businesses propose reforms to bolster investor trust

Survey responses reflected growing concern over U.S. tariff policy, prompting calls for close monitoring and analysis of international policy shifts.

Despite heightened caution, the majority of respondents reported no significant financial impact so far. Just 15% noted negative financial effects such as contract penalties, delayed or canceled orders, or price renegotiations. Meanwhile, 70% reported no specific financial impacts, and 5% even noted net profit gains.

EuroCham highlighted that a key factor in maintaining resilience is the Certificate of Origin (C/O) - a strategic asset ensuring preferential tariff access and enhancing credibility with international partners.

Digital transformation is now central to this effort. As of May 5, the Ministry of Industry and Trade has taken over C/O issuance, promoting automation and integration with digital customs and e-signature systems. This move was well received by the business community for its efficiency and time savings.

Bruno Jaspaert noted that amid evolving geopolitical dynamics, transparent, verifiable sourcing has become a crucial competitive edge.

“Digitalization isn’t just about reducing paperwork - it’s a strategic step to position Vietnam as a credible partner in next-generation trade,” he said. “A strong local supply chain and increased domestic production content will enhance Vietnam’s global competitiveness.”

He also stressed that C/Os are more than just a “passport” for tariff benefits - they symbolize reliability and trust. With digital tools, Vietnam can accelerate trade flows, minimize barriers, and create a resilient, transparent ecosystem that benefits both business and the broader economy.

The rollout of VNeID for businesses was also praised as a step toward a streamlined ‘single-window’ model for investors and enterprises.

EVFTA five-year milestone: building momentum

Despite ongoing business climate uncertainty, Vietnam’s stable growth, youthful workforce, and expanding free trade network continue to bolster its long-term appeal.

This year marks the five-year anniversary of the EVFTA’s implementation - both a symbol of progress and a reminder of work ahead.

Two-thirds (66%) of respondents are engaged in EU–Vietnam trade or supply chain support sectors such as logistics, warehousing, and distribution, signaling increasingly robust trade ties.

Survey data shows clear recognition of EVFTA’s benefits, with 98.2% of respondents aware of the agreement. Nearly half reported moderate to significant business gains from it - a strong sign that implementation is on the right track.

A notable shift this year is the rise in firms citing tariff preferences as a key EVFTA benefit - from 29% in Q2 2024 to 61% in Q2 2025. This reflects successful tax reduction schedules and increased utilization of EVFTA provisions.

Large enterprises tend to benefit most, particularly in exports from the EU to Vietnam. Meanwhile, small and medium-sized enterprises (SMEs) play a more active role in two-way trade, especially Vietnam-to-EU exports.

According to the Ministry of Industry and Trade, EU–Vietnam trade has risen by 40% since 2020. While only 21% of businesses could quantify direct profit from EVFTA, they reported an average 8.7% net profit increase - some even reaching 25%.

However, customs valuation remains a prominent barrier, cited by 37% of respondents. Other issues include legal framework inconsistencies and communication gaps with local authorities, hindering full benefits from the agreement.

To overcome these challenges, many businesses suggested simplifying import procedures, expanding digital platforms, and introducing self-certification of origin. Additionally, 28% called for more consistent customs guidelines, and 22% urged for the removal of technical trade barriers.

As Vietnam celebrates five years of EVFTA, BCI data points to a more cohesive institutional ecosystem, with improved government and enterprise capabilities as key to unlocking the agreement’s full potential.

The Q2 2025 BCI report reaffirms Vietnam’s standing as a top European investment destination. Yet EuroCham stresses the need for sustained, meaningful reform and prompt responses to enterprise feedback to attract high-quality, long-term FDI.

Nhan Dan