Vietnam ranked either first, in the top three or top five of 36% of European firms’ favourite global investment destinations.

This is according to the latest Business Climate Index (BCI) report released by the European Chamber of Commerce in Vietnam (EuroCham), produced by Decision Lab on Tuesday.

The findings showed Vietnam’s appeal as a foreign direct investment (FDI) destination is strong among European business leaders, with 3% more European business stakeholders stating the country is in their top three global investment choices.

The Business Climate Index – measuring business sentiment within the European business and investment community in Vietnam - remained steady at 48 in Q1 this year, Vietnam Plus reports. 

Despite remaining at the same level as at the end of last year, there are positive signs that European business stakeholders see an optimistic shift in their economic outlook.

Indeed, the number of respondents who are confident in Vietnam’s economy has increased by 8 points, the findings showed.

The survey also revealed the number of people who forecast a downturn in the country’s economy declined by 6%, whilst those who predict an uptick in orders and revenue rose by 7%.

Furthermore, the European business and investment community is broadly satisfied with policymakers’ attention to business needs in Vietnam, the report adds, with a third of respondents signalling significant or moderate satisfaction. This is thanks to the government’s commitment to promoting a business-friendly environment in Vietnam. 

Nevertheless, foreign businesses in Vietnam continue to face regulatory challenges and visa and work permit issues, the findings also showed.