New Prospects for Direct Investment of the European Union in Vietnam

Attracting foreign direct investment (FDI) in general and the European Union (EU) in particular is one of the priorities of Viet Nam's Foreign Policy Development Strategy.

Vietnam - EU Cooperation

EU investment activities in Vietnam

The EU is a big investor and early present in Vietnam. EU Member States have invested in Vietnam since late 1987, when Vietnam introduced the Foreign Investment Law. Looking back after 30 years of attracting FDI from the EU, it can be said that the EU is one of the big investors of Vietnam, behind only South Korea, Japan, Singapore and Taiwan.

According to statistics from the Foreign Investment Agency (Ministry of Planning and Investment), by the middle of the first quarter 2017, there are 1,959 projects from 24 EU countries that is still valid in Vietnam with total registered capital of 21,563 billion, accounting for 8.5% of the country's projects and 7.2% of the total registered investment capital of the country.

EU investors have invested in 18 branches in the national economic classification system. Three sectors in Vietnam deeply interested and invested by EU investors are manufacturing and processing industries; electricity distribution and production; trading in real estate.

Of which, manufacturing and processing industries is leading, 630 projects with total investment capital of US$ 8 billion, accounted for 32.2% of total projects and 34.7% of total EU investment in Vietnam. Followed by electricity distribution and production with total investment capital is $ 3.2 billion, accounting for 14.8% of total investment. Real estate business ranked third with 51 projects and total investment capital of 2.5 billion USD, accounting for 2.6% of projects and 11.9% of total investment.
Investment prospects of EU in Vietnam in the coming time

Vietnam is highly expected to attract FDI from EU countries, because the projects needing investment are high technology and key projects to the economy, required advanced management ability. However, the current difficulties of the EU economy may limit the flow of investment capital into Vietnam.
EU businesses are developing plans to invest in Vietnam to catch new business cooperation opportunities in trade relations. In particular, key sectors are expected to receive large capital inflows from EU businesses including: Investment in food, agricultural and aquatic products, nutritious food, renewable energy creating, pharmaceutical, manufacturing high technology machines and equipment.

According to EuroCham forecasts, investment in high-tech agriculture will be a enomously potential sector of many EU businesses.
Vietnam now has the advantage of being an attractive investment destination for European businesses, especially when the Vietnam-EU Free Trade Agreement (VEFTA) comes into effect in 2018.

With the scale and potential of capital and technology of the EU, Vietnam is facing the opportunity to become a transshipment gateway for EU trade and investment activities in the region.

Source: The Finance - A statement of  ĐANG THI TUYET MAI - Thai Nguyen University College of Economics and Techniques 

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