European Firms Remain Optimistic on Vietnam: Highlights from EuroCham Q2 2026 BCI

EuroCham’s Q2 2026 Business Confidence Index shows European businesses remain optimistic about Vietnam despite global uncertainty. The report highlights stronger commercial performance while identifying administrative reform, regulatory consistency, and intellectual property protection as key priorities for sustaining investment.

Marking the 15th anniversary of the flagship Business Confidence Index (BCI) of the European Chamber of Commerce in Vietnam (EuroCham), the Q2 2026 report delivers a comprehensive assessment of how European businesses are navigating an increasingly complex global and domestic environment.

Confidence among European businesses in Vietnam strengthened in Q2 2026 despite heightened global uncertainty, as EuroCham’s Business Confidence Index (BCI) rose seven points to 79.7, compared with 72.7 in the previous quarter.

Beyond measuring business sentiment, the report examines the impacts of geopolitical tensions, shifting trade dynamics, administrative reforms, and intellectual property protection on business confidence and investment decisions in Vietnam.

Strong business performance drives confidence

The Q2 2026 BCI shows that European business sentiment in Vietnam has strengthened significantly. 63 percent of respondents reported positive business conditions during the quarter, while 69 percent expect favorable conditions in the next three months, an 11 percentage-point increase from the previous edition.

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The improved outlook is underpinned by stronger commercial performance, including:

• Rising revenues, sales, and profitability (36 percent);
• Growing order books and new contract wins (32 percent); and
• Stronger domestic consumer demand (24 percent).

The findings suggest that business confidence is increasingly supported by market fundamentals rather than short-term recovery factors.

Administrative reform remains the top priority

Despite the positive outlook, regulatory and administrative challenges continue to weigh on investment decisions.

More than half (53 percent) of surveyed businesses identified regulatory delays, policy inconsistencies, and tax administration as their biggest obstacles to long-term expansion. Businesses also highlighted:

• Administrative procedures delaying project execution (33 percent);
• Compliance burdens diverting resources from core operations (29 percent);
• Regulatory complexity reducing competitiveness (27 percent); and
• Growing talent shortages, cited by 38 percent of respondents.

Respondents also pointed to inconsistent regulatory implementation, lengthy licensing procedures, and VAT refund delays as ongoing concerns that affect operational efficiency and investment certainty.

IP protection continues to influence investment decisions

Intellectual property protection remains an important consideration for European investors, particularly companies seeking to localize advanced technologies.

Among businesses with registered intellectual property in Vietnam:

• 32 percent experienced registration or enforcement challenges;
• Weak dispute resolution mechanisms were the most common issue (28 percent); and
• Administrative delays affected 18 percent of respondents.

While businesses welcomed the government’s recent IP reforms, many noted that it is still too early to assess their practical impact.

Global uncertainty reshapes business strategy

The BCI findings suggest that geopolitical tensions and global trade disruptions are influencing business strategy without significantly weakening long-term confidence in Vietnam.

While 46 percent of surveyed businesses reported a negative impact on their international operations, another one-third experienced mixed effects depending on their business segment, market, or supply chain. The findings indicate that the impact of external shocks varies considerably by company size, industry, and level of international exposure.

Mid-sized companies were the most affected, reporting the highest levels of operational disruption. In contrast, larger multinational companies saw no significant positive spillover effects from shifting trade dynamics, reflecting their greater exposure to global markets and compliance requirements.

Rising costs and supply chain adjustments

The survey shows that global uncertainty is primarily increasing operating costs rather than reducing business activity. Among affected businesses:

Businesses also reported logistics disruptions, delivery delays, and weaker customer confidence, prompting many to strengthen supply chain resilience. Longer transit buffers were particularly common among companies trading with the US and the EU.

Trade diversification creates new opportunities

Despite these challenges, some companies have benefited from shifting global supply chains. Respondents reported increased production orders and investment as manufacturers diversified operations toward Vietnam, reinforcing the country’s position as a regional manufacturing and sourcing hub.

At the same time, compliance requirements have become more complex. More than half of internationally active businesses said geopolitical developments have made compliance with Rules of Origin (RoO) requirements more difficult, particularly in obtaining supplier documentation, demonstrating manufacturing transformation, and managing fragmented sourcing networks.

Financial impact remains manageable

While two-thirds of surveyed businesses reported a negative financial impact from global uncertainty, the scale of losses remained relatively limited for most respondents.

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Key highlights include:

• Around half of affected businesses reported losses of less than 10 percent.
• Only 4 percent experienced losses exceeding 30 percent.
• Meanwhile, 14 percent of respondents recorded positive financial outcomes, largely driven by supply chain realignment and shifting trade flows.

Companies with stronger integration into EU–Vietnam trade were generally more resilient, highlighting the benefits of diversified export markets and established trade relationships.

Outlook: Vietnam remains a strategic investment destination

The Q2 2026 Business Confidence Index reinforces Vietnam’s position as one of Asia’s most attractive destinations for European investment.

Despite mounting geopolitical tensions and an increasingly complex global trading environment, European businesses continue to view the country as a strategic market for long-term growth, supported by resilient domestic demand, expanding manufacturing capabilities, and ongoing supply chain diversification.

At the same time, the survey highlights that maintaining this momentum will require continued improvements to Vietnam’s business environment.  As Vietnam pursues its ambition of becoming a high-value investment destination, addressing its structural challenges will be key to translating strong business sentiment into sustained, high-quality foreign investment.

See also: Is Vietnam the Right Market for Your Business? A Decision Framework for Foreign Investors

Setting up a business in Vietnam requires navigating company registration, local approvals, and work permit processes. We help FDI companies by preparing and submitting documentation, coordinating with authorities, and ensuring compliance, so they can start operations smoothly and focus on growth.

Tam Nguyen

Senior Manager

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