The rate of German companies wanting to expand has increased by 3 percentage points from last year and is higher than the Southeast Asian average of 44 percent, according to the 2019 AHK World Business Outlook released recently by the German Chambers of Commerce Abroad.

Most of these businesses are in industry, construction, services, and trading, the survey, which polled nearly 1,000 Germen entrepreneurs in April, said the report.

Around 77 percent said their businesses situation has improved this year compared to 56 percent last year.

Marko Walde, chief representative of the German Industry and Commerce Vietnam (GIC/AHK Vietnam), said that German firms want to set up factories serving sustainable business development and create partnerships with Vietnamese firms.

But there are also issues that concern German businesses. Over half of them, 51 percent, said that economic policies are the greatest factor of uncertainty for their business this year. This ratio has increased by 7 percentage points since last year.

They also said the country has a shortage of skilled labor and most workers have to be retrained when employed, adding and labor costs are rising.

Walde said Vietnam needs to create a practical vocational training system to ensure long-term development.

"When businesses invest in modern technologies, they need skilled workers. A practical-oriented vocational training system will not only serve German businesses but also the development of Vietnam."

Vietnam last year attracted $35.46 billion worth of FDI, marginally down from 2017, according to the Ministry of Planning and Investment.