Positive Results for European Chamber’s Vietnam Business Climate Index (BCI)

June 9, 2015 Posted by Vietnam Briefing Reading Time: 4 minutes

365 Hanoi – The European Chamber of Commerce (EuroCham) in Vietnam has announced the results of the 18^th Business Climate Index (BCI) survey, revealing the current and expected future business environment among European businesses operating in Vietnam.

The 18^th quarterly EuroCham BCI survey conducted in April 2015 showed confidence in Vietnam’s business climate remaining high at 75 index points out of 100 for the first quarter of 2015, down slightly from 78 in the previous quarter. Participants in the survey mostly came from the services, trading and manufacturing industries.

RELATED: Dezan Shira & Associates’ Pre-Investment, Market Entry Strategy Advisory

Overall, 45 percent of businesses participating in the survey perceived Vietnam’s current business climate as “good”, down from 52 percent in the last quarter. Those perceiving the climate as “neutral” was recorded at 31 percent, with “very poor” and “excellent” on 11 percent each.

The majority of 57 percent expect future business conditions to be “positive”, a five percent drop from last quarter. 30 percent of respondents perceived the outlook as neutral, up from 28 percent last quarter. The remaining respondents were divided equally between “excellent” and “poor” outlooks.

Vietnam’s macroeconomic outlook was perceived by 63 percent in the first quarter as heading for “stabilization and improvement”, up from 59 percent last quarter. A shift from 20 percent to 25 percent of respondents was recorded that the outlook is “not to change”. A dramatic decline from 21 percent to 12 percent predicted “deterioration of the macroeconomic conditions”.

RELATED: Sealing the Deal in Vietnam: Company Chops Necessary

The participants expected a slight decrease in inflation from 5.78 percent to 5.25 percent over the next six months. A slight inflation impact on business situation was reported in 65 percent respondents. While 17 percent feared a significant impact, seven percent believed inflation would have no impact on their business, and only one percent were afraid it would threaten their business.

View of the new enterprise law and investment laws were mixed among the respondents. Three equal groups at 21 percent each recorded that they believed the changes to beneficial, that the changes would have no impact, and that the businesses was uninformed about the changes. Another 20 percent said that they were informed about the changes but did not know the details of the regulations. The remaining nine and six percent believed that the changes would be not beneficial at all, and that the new regulations will be obstructive to their businesses respectively.

For advice on how the new enterprise and investment laws will affect your business in Vietnam, get in touch with Dezan Shira & Associates Vietnam at: hcmc@dezshira.com

About Us

Asia Briefing Ltd. is a subsidiary of Dezan Shira & Associates. Dezan Shira is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in China, Hong Kong, India, Vietnam, Singapore and the rest of ASEAN. For further information, please email vietnam@dezshira.com or visit www.dezshira.com.

Stay up to date with the latest business and investment trends in Asia by subscribing to our complimentary update service featuring news, commentary and regulatory insight.

‍

Import and Export: A Guide to Trade in Vietnam
In this issue of Vietnam Briefing Magazine, we provide you with a clear understanding of the current business trends related to trade in Vietnam, as well as explaining how to set up your trading business in the country. We also attempt to give perspective on what will be Vietnam’s place in the Association of Southeast Asian Nations (ASEAN) in 2015, and look at some of the country’s key import and export regulations.

Using Vietnam’s Free Trade & Double Tax Agreements
In this issue of Vietnam Briefing we explore how Vietnam’s Free Trade Agreements – and especially those via its membership in ASEAN – will affect foreign investment into Vietnam. We also go a step further and examine the specific, bilateral Double Tax Agreements that Vietnam has enacted, and how these can be further used to minimize profits and withholding taxes that would otherwise be levied upon foreign investors.

Developing Your Sourcing Strategy for Vietnam In this issue of Vietnam Briefing Magazine, we outline the various sourcing models available for foreign investors – representative offices, service companies and trading companies – and discuss how to decide which structure best suits the sourcing needs of your business.