Heralding new options for French investors

Prime Minister Pham Minh Chinh met with French counterpart Jean Castex in November

How did the operations of French businesses in Vietnam pan out in 2021 and what are the prospects for French investment in 2022?

Adam Koulaksezian, executive director of The French Chamber of Commerce and Industry in Vietnam (CCIFV)

Our companies and members have been strongly impacted by the pandemic, especially French companies abroad that are not eligible for French financial aid and do not benefit from the support of a headquarters in that country.

Faced with this situation, the CCIFV has made its visibility and extensive network available to put companies in difficulty in touch with volunteer experts for advice and companies ready to invest. We were able to see the strength of our network and the great solidarity of our French business community in this unprecedented context.

The prospects for French investment in Vietnam in 2022 are promising, as illustrated by the recent visit of Prime Minister Pham Minh Chinh to France and the signing of no less than 29 major cooperation agreements.

We also recall the importance of the EU-Vietnam Free Trade Agreement, and foreign direct investment (FDI) keeps growing. Vietnam’s favourable conditions for doing business, namely its strategic location, stable political system, ample, young and tech-savvy workforce, and a relatively open environment for FDI, has cemented its position as a safe and stable destination for investment.

What do you think of the efforts of the Vietnamese government to ensure the investment environment for foreign investors?

This pandemic has not made decisions easy, but the Vietnamese government had very good management of the pandemic in 2020. In 2021, it was able to adapt and make the choice to live with the pandemic, to set up a plan for the progressive reopening of the country.

These elements are very positive for Vietnam, and we see that more flexibility is needed for the return of international experts and to facilitate business travel if Vietnam wants to attract more French investors.

Our organisation belongs to an international network of 126 chambers and we have seen a strong attraction for Vietnam over the last two years. The CCIFV is at the full disposal of the Vietnamese government to encourage and support French investment in Vietnam.

What are your recommendations to address the challenges of businesses post-pandemic such as rising input materials, lack of workforce, and supply chain disruption?

In recent decades, Vietnam has performed strongly in attracting key investors in electronics, footwear, and textiles. In order to attract more FDI and boost Vietnam’s economic growth, the authorities should keep lifting various restrictions especially regarding international flights and quarantine regulations.

The business hardship is not completely over, but Vietnam remains an appealing option for French investors to continue their business or even relocate their manufacturing operations from other Asian countries. At CCIFV, we believe that supply chains will continue to be stretched but global demand for products remains high. With its reasonable labour costs, reliable infrastructure, and smooth bureaucratic process, Vietnam can navigate the new normal and get ready for new flows of FDI.

The government should allocate more capital for social assistance programmes and support recovery by alleviating companies’ taxes. Vietnam’s socio-political stability, policies, and measures to step up vaccination will allow the country to overcome challenges, while the French Chamber of Commerce and Industry will continue to showcase successful business development and promote international networking and exchange of best practices in Vietnam.