Before the EVFTA took effect (August 1, 2020), Vietnam’s trade and investment relations with the EU in general and with Germany in particular have always been assessed for a strong and comprehensive development. Investors from Germany also consider Vietnam as a potential market with investment attraction, only after China and India. However, in fact, direct investment flows from Germany into Vietnam have not been as expected.

GERMAN BUSINESS  timid  INVESTMENT IN VIETNAM

As of August 2020, Germany had 350 FDI projects invested in Vietnam, total investment capital of 2 billion USD and ranked 18th in the total number of countries and territories investing in Vietnam. German projects are mainly concentrated in big cities such as Ho Chi Minh City, Hanoi, and Binh Duong. Many big German brands are widely known in Vietnam such as Bosch, Ericsson ...

Among the top 10 countries investing in Vietnam, mainly from East Asia and Southeast Asia, a country from the UK is also the British Virginislands tax paradise. 

Experts admitted that FDI projects from Germany are of high quality, focusing on areas with high levels of knowledge and technology, but the capital is not large. 

“We always call for high-quality investment projects in Vietnam that are sustainable, but in fact G7 countries including Germany are almost absent, only Japan is in the top 10 investment. into Vietnam. This question is for policy researchers, policy-makers who research and find answers, if they cannot answer this question, they will forever not know how to entice high-tech countries into Vietnam. Nam ”, Mr. Le Viet Thai, Vice Chairman of Vietnam - Germany Friendship Association emphasized at the Vietnam - Germany Economic and Trade Forum 2020. 

Mr. Doan Hoang Minh, Deputy Director of the European Department (Ministry of Foreign Affairs), admitted that Germany as well as many other European countries such as the UK, France, Spain and Italy, so far, only viewed the Vietnamese market. potential, not much investment in Vietnam. Most German enterprises are interested in and invest in other markets such as China, Japan, and India. These countries attract German businesses thanks to many different advantages. 

Explaining this fear, according to Mr. Minh, due to the unclear Vietnamese legal framework, the infrastructure has not met the needs of German investors, along with that the supporting industry is not really. develope. 

Assuming that not only the issue of institutions, infrastructure, human resources, according to Mr. Le Viet Thai, the culture of "lubrication", the official costs make German investors hindered by the discipline. German people do not accept to pay these. 

Meanwhile, restrictions such as policy instability, increased trade barriers and legal safety also made German investors hesitant to invest in Vietnam. “I learned from the German Chamber of Commerce and Industry in Vietnam, they complained that Vietnam’s policy in the direction of opening, closing in other times then opening again. Such "shock" mechanism cannot attract German investors, "said Mr. Thai. 

Not to mention the viewpoint about economic sectors when the state-owned enterprise sector still holds a leading role in some fields ...

HOW DOES German INVESTORS COME TO VIETNAM?

The signing of EVFTA is a historical achievement of Vietnam - EU relations. Along with the early signing of the IPA Investment Protection Agreement, the FTA is expected to bring investment and trade opportunities for both countries. "The tremendous development of the investment relationship between the two countries can not be harvested immediately and takes a long time, it will certainly be better", Mr. Doan Hoang Minh said. 

Over the past time, the German side has actively brought many businesses to Vietnam to explore the market, connect and cooperate. German law is also built in the trend of creating more benefits for foreign workers, promising to bring new opportunities for Vietnamese workers to learn skills, improve qualifications and capabilities in Germany. In particular, in terms of strategy, since September 2020, Germany announced its orientation, affirming its importance to cooperation with ASEAN, including Vietnam, paving the way for more active economic engagement in Vietnam.

However, according to Mr. Le Viet Thanh, to attract German businesses to invest in Vietnam, the most essential thing is to improve the investment environment and transparent business environment. Transparency is a key factor for investors to understand the rules and procedures to comply strictly, thereby setting priorities in their business plans. 

On the German side, representatives of some businesses said that the Government of Vietnam should create a level playing field and an equal economic framework for both domestic and foreign businesses. The quality of human resources also needs to be built methodically and with high quality. Vietnam needs to offer training programs for businesses and businesses will train their own human resources.

“Vietnam can be proud of its diligent workforce with a high literacy rate, but to work in German companies, workers need better preparation as well as knowledge and experience. Practical expertise ”, said a representative of a German enterprise.