European business confidence in Vietnam surged to 79.7 points in Q2 2026 from 72.7 points in Q1, defying global supply chain volatility and shifting trade dynamics, EuroCham said.
The latest index is just a fraction below the historic seven-year peak of 80 in late 2025.
A balanced growth across multiple sectors shows Vietnam’s economic engine is accelerating on multiple cylinders, the chamber noted.
The latest index is just a fraction below the historic seven-year peak of 80 reached in late 2025.
“The momentum signals a renewed appetite among European investors for expansion in one of Southeast Asia’s fastest-growing economies, reaffirming the long-term confidence that briefly receded amid heightened global uncertainty,” , the chamber noted in a release.
The survey shows that 63 per cent of European businesses reported positive business conditions during Q2, while optimism continues to strengthen, with 69 per cent expecting favourable conditions in the coming quarter.
This wave of optimism represents an 11-percentage-point jump compared to the expectations expressed just three months ago, driven by surging commercial performance, a healthy influx of new orders and resilient domestic demand.
The data highlights clear commercial drivers behind this optimism. Among the firms reporting improved performance this quarter, 36 per cent pointed to rising revenues, stronger sales velocities and enhanced operational profitability that consistently outpaced internal forecasts.
Meanwhile, 32 per cent credited their brighter outlook to expanding order books and major new contract wins, while 24 per cent emphasised a noticeable strengthening in domestic consumer demand.
This balanced growth across manufacturing, tourism, real estate, and export-oriented sectors shows that Vietnam’s economic engine is accelerating on multiple cylinders, the press release from the chamber observed.
Despite rising confidence, 53 per cent of businesses consistently ranked regulatory delays, policy inconsistencies and opaque tax administration not merely as minor daily annoyances, but as the primary anchors dragging down their long-term expansion plans.
While these longstanding challenges remain firmly at the top of the business agenda, new pressures are also emerging. Talent shortages have continued to rise since Q4 2025, now cited by 38 per cent of businesses and ranking among the three most pressing operational challenges.
Meanwhile, technical and product standards have emerged as a growing source of operational complexity, reflecting the growing sophistication of Vietnam’s economy.
A third of businesses reported that administrative procedures slow operational execution and project delivery, while 29 per cent said they divert resources away from core business activities. A further 27 per cent believe regulatory complexity reduces competitiveness and limits market access.
Many respondents described spending an escalating amount of management time dealing with multi-layered licensing, repetitive approvals, and redundant documentation.
This administrative burden acts as a stealth tax on innovation, limiting a firm’s ability to reinvest capital into local research and development or facility expansions.
Furthermore, businesses frequently pointed to the inconsistent implementation of central decrees across different authorities, unpredictable regulatory evolutions and prolonged value-added tax refund procedures as persistent sources of financial uncertainty that tie up vital working capital.
Intellectual property protection also remains an important consideration for businesses in Vietnam.
Among respondents with registered intellectual property or trademarks in Vietnam, 32 per cent reported experiencing at least one registration or enforcement challenge, most commonly weak dispute resolution mechanisms (28 per cent) and delays in administrative procedures (18 per cent).
Fibre2Fashion News Desk (DS)
