Vietnam is witnessing a steady rise in foreign direct investment (FDI) from Europe, with increasing businesses viewing the country as a strategic destination, particularly in clean energy, high technology, semiconductors, and infrastructure.

The bulk of European capital has been directed towards processing and manufacturing, energy and gas, real estate, and information and communications.

Figures show that European investors channelled 2.5 billion USD of FDI into Vietnam in 2022, climbing to 3.25 billion USD two years later.

The continent now accounts for nearly 2,500 projects in the Southeast Asian country, with the Netherlands, France, Luxembourg, and Germany together contributing around 20 billion USD.

The bulk of European capital has been directed towards processing and manufacturing (36.3%), energy and gas (20.7%), real estate (11%), and information and communications (6.6%).

Although European businesses are present in almost all provinces and cities, the largest concentrations are found in metropolises and industrial hubs such as Ho Chi Minh City, Dong Nai, Hanoi, Bac Ninh, and Quang Ninh.

At a recent B2B networking event in Hanoi that brought together 100 Italian firms and 200 Vietnamese counterparts, Michal Ron, Chief International Business Officer at Italian insurance and finance group SACE, affirmed that Vietnam is always considered a priority market for Italian companies.

She expected that the EU-Vietnam Free Trade Agreement (EVFTA) will create further opportunities, spurring greater investment from Italy to Vietnam.

Many large European investors have come to Vietnam in recent years. Among them, LEGO of Denmark has built a toy factory worth 1.3 billion USD in Ho Chi Minh City.

Nguyen Hai Minh, Vice Chairman of the European Chamber of Commerce in Vietnam (EuroCham), said European investments are gravitating towards emerging sectors such as clean energy, high technology and logistics, with the aim of positioning Vietnam as a regional transhipment hub.

Le Anh Dung, Chief Executive of the Institute for International Investment Studies (ISC), added that investors from Denmark and Germany are particularly active in renewable energy.

However, analysts said FDI from Europe remains modest compared to Vietnam's attraction potential, cautioning that limitations in human resources, infrastructure, institutional framework, and administrative procedures continue to pose major challenges.

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