Facilitating two-way business between Vietnam and Italy

June 12, 2023 | 13:00
(0) user say
As a country, Italy, whose GDP growth has been rather stagnant for a while, breathes optimism and energy from Vietnam. Both countries place a strong emphasis on values such as family, traditions, beauty, and food, and both have a rich cultural heritage that is deeply ingrained in their societies. Additionally, Vietnam and Italy are similar in terms of their geographical size and administrative structure, which does provide a basis for more effective collaboration.

Italy and Vietnam have maintained friendly relations for decades, dating back to the establishment of diplomatic ties in 1973. The partnership has grown and strengthened over the years, based on shared values and interests, as well as mutual respect and trust, and became a strategic one in 2013.

Facilitating two-way business between Vietnam and Italy
Michele D’Ercole - Chairman, Italian Chamber of Commerce in Vietnam

The Italian Chamber of Commerce in Vietnam (ICHAM) now has offices in Ho Chi Minh City and Hanoi and a number of desks in main Italian cities that cooperate strongly with the Italian Embassy in Hanoi, the Consulate General in Ho Chi Minh City, and the Vietnamese Embassy in Rome, as well as bilateral chambers of commerce and business associations

In terms of political relations, Italy and Vietnam share a commitment to upholding democratic principles and human rights. Italy and its friends expect the respect of individual rights, particularly in the workplace, from a government that is efficient and honest. Vietnam has made significant progress and Italy has been supportive of these efforts. The two countries have also collaborated on issues such as climate change, sustainable development, and regional security.

The trade volume between the two countries has grown steadily over the years, reaching a record high of over €6 billion in 2022. Italy’s main exports to Vietnam include machinery, equipment, and components, while Vietnam exports mainly clothing, textiles, and footwear to Italy. This is a positive sign for both nations, as it reflects a mutual interest in strengthening trade ties.

However, whilst bilateral trade was rather balanced before 2020, recent data shows that, while Vietnam is to be praised for increasing its exports to Italy, the other direction has not kept the same pace.

Italy hopes to see an increase in exports to Vietnam, especially at a time when the euro is relatively weak, shipment costs have gone down, and Vietnam is upgrading its infrastructure and technology and needs therefore advanced machinery, technology, components and know-how also from Italy.

Whilst trade has increased significantly, the same cannot be said about investments from Italy and this is a time of generalised reduction of foreign direct investment into Vietnam. Naturally, since so many foreign companies have set foot in Vietnam, a reduction in inflows is only to be expected.

Nevertheless, certain concerns should indeed be addressed. One important factor for foreign companies to invest in Vietnam is the certainty of the rule of law. We believe that there should be more clarity and consistency in the legal framework and well as simplicity in procedures, in order to ensure a level playing field for all investors and a higher level of attraction.

The government’s continued efforts in its anti-graft campaign is a step in the right direction, and Western players expect an efficient and honest government. If we look at neighbouring Singapore, high-ranking politicians are paid well precisely to attract the very best talents, hold them accountable, and avoid the temptation of corruption.

Another issue that needs to be addressed is the difficulty faced by foreign shareholders in remitting their profits out of the country. Banks often require numerous supporting documents for this purpose, making the process cumbersome and time-consuming. We suggest that the government should simplify this process to make it easier for foreign investors to repatriate their profits.

In addition, Vietnam should facilitate business visas and work permits for foreign workers. This would not only benefit businesses but also enrich society and promote trade, which ultimately leads to peace. A more streamlined process for business visas and work permits would also make Vietnam more attractive to foreign investors, as it would demonstrate the country’s openness and willingness to embrace foreign talents.

It is also important that foreign judicial decisions, administrative acts, and the extension of intellectual property rights through the Madrid system be swiftly recognised and enforced in Vietnam. Clear and efficient legal procedures enhance the credibility of the Vietnamese business environment and attract foreign investors, who can trust their rights will be protected even further than they already are, thanks to existing treaties.

In this light, we also hope that national parliaments of the EU member states ratify the EU-Vietnam Investment Protection Agreement, which complements the EU-Vietnam Free Trade Agreement of 2020. In this regard, Vietnam has already done its part.

We hope that Vietnam can adopt these measures to enhance its legal and regulatory environment: continued efforts to enhance transparency and efficiency in legal procedures, particularly in areas such as investment licensing, bureaucracy reduction, dispute resolution, and intellectual property protection. A more predictable and stable legal environment will boost investors’ confidence and facilitate business activities, ultimately contributing to the growth of the Vietnamese economy and society.

We are committed to promoting opportunities in Vietnam to our members in Italy, especially in the fields of defence, civil protection, the fight against pollution, machinery, industrial innovation, education, food and agricultural chain traceability, and production of advanced construction materials to reduce energy consumption. We also believe that the cultural and touristic potential of Vietnam is still under-explored and can benefit from Italian expertise and promotion.

All this should be carried out also in provinces different from Hanoi and Ho Chi Minh City, especially the central ones. These regions have enormous potential for development and can offer unique opportunities for Italian businesses looking to invest in Vietnam.

Our members are proud to be part of the vibrant and dynamic business community in Vietnam and look forward to contributing to its growth and prosperity. In particular, 2023 marks important milestones for ICHAM, in which we have many events to support such significance.

The first highlight includes our partnership with three major wine protection consortiums in Italy: those of Valpolicella, Abruzzo, and Prosecco. With each cooperation, we customised the events based on specific relating criteria; depending on which, we organise activities including various contests, masterclasses, and business-to-business meetings.

Another highlight is the events that ICHAM accompanies in celebration of 50 years of diplomatic relations between Italy and Vietnam. A noteworthy upcoming event hosted for this specific milestone is a golf tournament in July. Furthermore, the 15-year anniversary of the establishment of ICHAM is definitely an important mark, in which we will host events to celebrate as well.

Lastly, we cannot forget to mention that the Italian Embassy in Hanoi managed to organise a full opera at the Hanoi Opera House, Cavalleria Rusticana, written in 1889 by Pietro Mascagni, within the celebrations of 50 years of diplomatic relations.

This event, together with a recent show at the Trajan Fora in Rome by the Vietnamese Embassy, and Italian Design Day, celebrated in cities such as Hanoi and Ho Chi Minh City, represents the shared love for culture, music, and beauty between our two countries.

As ICHAM, we take inspiration from these values that go beyond sheer business, as testified by the recent delegations of wine consortiums from Italy and our participation in the Green Economy Forum and Exhibition in November last year.

Vietnam receives nearly 1.5 million doses of COVID-19 vaccines from France and Italy Vietnam receives nearly 1.5 million doses of COVID-19 vaccines from France and Italy

Vietnam on September 14 received two shipments of Astra Zeneca COVID-19 vaccines donated by the governments of France and Italy through the COVAX Facility.

Vietnam, Italy look to optimise business opportunities Vietnam, Italy look to optimise business opportunities

Nearly 100 delegates representing Vietnamese and Italian organisations and businesses attended the Vietnam-Italy trade promotion forum in Rome on September 19.

By Michele D’Ercole

What the stars mean:

★ Poor ★ ★ Promising ★★★ Good ★★★★ Very good ★★★★★ Exceptional