In the first eight months of 2017 Germany was the EU’s largest foreign investor in Vietnam. German companies see Vietnam as a first-class investment destination. World-famous German textile companies investing in Vietnam intend to expand their investments, creating highly qualified jobs, a transfer of technology, and state-of-the-art labor conditions.
Although Vietnam has a good set of legal provisions, the competency of the staff working in the administration, particularly on the provincial and local levels, is weak. Decisions are often discretionary or made without profound knowledge of the legal rules. Rules and procedures are changed fast, sometimes without taking into account existing rules which contradict the new ones. Pharmacy and agriculture are the most recent examples, the automotive sector another.
Another problem is the lack of flexibility to meet the requirements of German companies. The EU and Vietnam are conducting final procedures for the signing of the EU-Vietnam Free Trade Agreement next summer. This agreement opens new opportunities for both Vietnam and Germany. Both want to create beneficial conditions in order to increase the bilateral trade volume to 20 billion dollars by 2020. Reduction of duties will further enable the import of high-tech solutions, both in machinery and services.