Strong optimism for European firms in Vietnam as BCI hits 3-year high

The index climbed to 66.5 points in Q3, surpassing pre-US tariff levels and reaching its highest in three years.

EuroCham Vietnam chairman Bruno Jaspaert noted a sharp improvement in business sentiment: 80 per cent of survey respondents are optimistic about their prospects over the next five years, while 76 per cent would recommend Vietnam as an investment destination.

Despite external headwinds, Vietnam’s structural story still holds strong, a release from the chamber noted.

The report, compiled by Decision Lab, goes beyond macroeconomic sentiment to capture structural shifts quietly reshaping Vietnam’s business environment: forward-looking reforms in visa and work permit policies, growing momentum for green investment, and the ongoing digitalisation of administrative procedures.

“Together, these changes reflect how European investors perceive Vietnam’s future: full of promise, the release said.

Thirty-one per cent of surveyed businesses reported a net negative impact on their financial performance, a sizable adjustment compared to 15 per cent in Q2 2025.

Interestingly, the share of firms seeing a net positive impact also followed a similar trend, rising to 9 per cent from 5 per cent in Q2, reflecting the potential upside for companies able to reposition themselves amid global trade re-routing. 

Despite these adjustments, relocation remains limited: only 3 per cent are considering moving operations out of Vietnam, while another 3 per cent are considering relocating into or within the country, reaffirming Vietnam’s reputation as a resilient and reliable base for production and investment.

While clarity around US transshipment rules and future trade deals remains limited, most firms report no major change to their investment plans or operations. Regulatory compliance, market dynamics and sourcing strategies have become ‘slightly more challenging’, but few see these headwinds as strong enough to alter their long-term commitment to Vietnam.

Forty-two per cent believe that Vietnam will reach its ambitious gross domestic product (GDP) growth target of 8.3-8.5 per cent this year, while 23 per cent remain neutral and 35 per cent express some reservations.

Administrative inefficiency remains one of the most significant challenges facing European businesses in Vietnam, with 65 per cent citing procedural burdens as an obstacle. Tax-related procedures, particularly value-added tax refunds, continue to cause frustration, while inconsistent interpretations of work-permit rules between provinces create operational uncertainty. 

Forty-eight per cent of the respondents reported that recent policy changes have already made a positive difference in their operations, while 42 per cent said the impacts are yet to materialise, often due to transitional administrative issues.

Half of respondents are now aware of the EU Green Deal, although only 7 per cent have directly engaged with its mechanisms. Awareness of Vietnam’s National Green Growth Strategy (2021-2030) stands at 43 per cent, with nearly one in five firms actively benefitting from related programmes supporting energy efficiency and innovation. 

Meanwhile, the EU Deforestation Regulation (EUDR), due to take effect in 2026, is already prompting companies to review their supply chains. Over one-third of respondents are aware or exploring compliance requirements, and 11 per cent have begun aligning sourcing practices with EU sustainability standards.

At the enterprise level, about a quarter of European firms in Vietnam have implemented full-scale green initiatives within the past two years.

ALCHEMPro News Desk (DS)