HCMC – Vietnam continues to be a key investment hub for European businesses, even as confidence eased in early 2026 due to global uncertainties, according to the European Chamber of Commerce in Vietnam (EuroCham).
The chamber’s Business Confidence Index (BCI) fell to 72.7 in the first quarter, down by 7.3 points from the previous quarter. The decline reflects a more cautious outlook amid geopolitical tensions and rising global volatility.
Despite this drop, sentiment remains relatively strong. The index is still higher than levels seen in recent years, and 93% of surveyed European firms said they would recommend Vietnam as an investment destination, one of the highest rates on record.
The report shows that businesses have performed better than initially expected despite global trade disruptions. In 2025, 77% of European companies in Vietnam maintained or increased revenue, with 40% reporting growth.
However, companies are facing rising risks linked to external factors. Energy price volatility was cited by 75% of respondents as a key concern, followed by higher operating costs and weakening global demand. Overall, 90% identified cost pressures and geopolitical tensions as major risks for 2026.
Confidence levels vary depending on company size and market exposure. Larger firms tend to remain more optimistic, while smaller businesses report weaker sentiment.
Companies that focus on Vietnam’s domestic market show stronger confidence than those reliant on exports, particularly to regions affected by geopolitical tensions such as the Middle East.
In the first quarter, 56% of firms reported positive performance, below earlier expectations of 69%. The gap reflects slower deal-making, higher costs, and ongoing uncertainty.
Beyond global factors, businesses continue to face domestic constraints. Administrative procedures and regulatory inconsistencies remain the most cited obstacles, followed by tax-related issues and a growing shortage of skilled labor.
These challenges are increasing operating costs and slowing business activities, reducing competitiveness in a more complex global environment.
Despite short-term pressures, Vietnam’s long-term appeal remains intact. Sectors such as agriculture, food, tourism, and hospitality recorded particularly strong investor confidence.
The report highlights that companies with a deeper strategic presence in Vietnam are more likely to report positive performance and maintain a favorable outlook.
EuroCham said further improvements in infrastructure, administrative reform, and regulatory clarity would be critical to sustaining investment momentum in the coming years.
