Resilience felt in European funding
Resilience felt in European funding
European investment in Vietnam is forecast to continue flowing strongly into hotspots like digitalisation and sustainability in 2025, on the back of growing market demand and economic recovery.
France’s OpenAirlines, which prioritises airline fuel efficiency solutions leveraging AI, signed on February 6 a strategic partnership agreement with Vietjet as part of its effort to expand its services in Vietnam.
Vietjet will be the first airline in the country to adopt SkyBreathe, an innovative platform that leverages AI, big data algorithms, and machine learning to analyse numerous flight data and optimise fuel usage.
Alexandre Feray, CEO of OpenAirlines, told VIR, “The Vietnamese market is growing very fast. It is very advanced in terms of digital technology. We plan to work with more Vietnamese airlines and others in the region, and we are discussing with them. Vietnam Airlines will be the second carrier we are planning to partner with.”
Many European businesses and investors are making plans in Vietnam. As shown in the fourth-quarter Business Confidence Index (BCI) report released by the European Chamber of Commerce in Vietnam (EuroCham) in early 2025, a significant portion of businesses indicated plans to expand their operations in Vietnam.
Approximately one out of four member companies are considering partnerships with Vietnamese suppliers or service providers, and more than one-fifth of the respondents are looking to expand their footprint in the country. And another 30 per cent are looking to increase their import/export operations and/or shift production to Vietnam.
EuroCham chairman Bruno Jaspaert said, “Despite the global challenges, Vietnam’s positive investment climate is creating new opportunities for European companies, especially in key sectors like technology, manufacturing, tourism and renewable energy.”
Meanwhile last week, Patrick Hemmer, Ambassador of Luxembourg to Thailand and designated Ambassador to Vietnam, said it was expected that Ho Chi Minh City would strengthen cooperation with Luxembourg in the fields of finance and trade and participate in building an international financial centre in the city.
Luxembourg is currently a strategic partner in green finance of Vietnam. By the end of 2024, Luxembourg had 31 projects in the city worth more than $400 million, ranking 14th out of 126 countries and territories investing here, and third from the EU.
Alexander Ziehe, chairman of the German Business Association, also believes that the future of its community is promising for 2025.
“We anticipate a resurgence in German funding, driven by diversification, regionalisation, and supply chain localisation strategies,” he said. “We expect increased investments in local sourcing, research and development, and manufacturing to align with these trends. In line with global requirements, German companies will also remain committed to decarbonising their operations and implementing best business practices.”
Member companies of EuroCham’s Digital Sector Committee (DSC) also see 2025 as an important year as it marks the start of new emphasises on groundbreaking advancements in science, technology, innovation, and national digital transformation.
“Vietnam’s digital landscape is poised for significant growth in 2025 and beyond. Businesses are investing in advanced logistics, AI-powered personalisation, and seamless integration between online and offline channels to enhance customer experiences,” said Pavel Poskakukhin, co-chair of DSC. “The fintech sector is also flourishing, with innovations in mobile payments, digital banking, and peer-to-peer lending attracting substantial investment. Edtech is another key area of growth, driven by the need to upskill Vietnam’s workforce.”
These developments underscore the vibrant and rapidly evolving nature of Vietnam’s digital ecosystem, he added, and businesses and investors who strategically align with these trends will be well-positioned to capitalise on the immense opportunities in this dynamic market.
The trends are reflected by the growing confidence among member companies of EuroCham Vietnam. As shown in the fourth-quarter BCI report, the index surged from 46.3 in the fourth quarter of 2023 to 61.8 in the fourth quarter of 2024, marking a pivotal shift from a neutral to a positive sentiment in both current and future outlooks.
In particular, a significantly higher number of businesses, or 56 per cent trust that Vietnam’s economy will stabilise and improve in the next quarter. Respondents also hold a more positive outlook for the future, with nearly half (47 per cent) anticipating a “good” or “excellent” business outlook for the first quarter of 2025.
According to the report, favourable market conditions bolster optimism amidst challenges in fluctuating demand and policy frameworks. Key opportunities are increased export/import activity between Vietnam and the US, coupled with the ongoing economic recovery.
Also, core infrastructure development is highlighted as the key factor for enhancing Vietnam’s attractiveness for foreign direct investment. Additionally, there is significant emphasis on streamlining administrative processes, delivering clarity and precision in laws, and strengthening law enforcement.
According to the Ministry of Planning and Investment, Vietnam attracted about $1.5 billion worth of EU funding in 2024, making up 3.92 per cent of the foreign total.
