The EU-Vietnam Investment Protection Agreement (EVIPA) is expected to create a favourable environment for Vietnam to attract further investment in fields where the EU holds strengths, such as finance, telecommunications, transport, distribution, processing, hi-tech manufacturing, and clean and renewable energy.

According to the Ministry of Planning and Investment (MPI), the implementation of the commitments in the EVIPA, which was approved by the National Assembly on June 8, will encourage Vietnam to improve its institutions and policies, making the country’s investment and business environment more transparent and welcoming.

Investment from the EU is projected to support the development of domestic economic sectors. Through production links with EU-invested enterprises, Vietnamese ones will have the opportunity to join global and EU value and supply chains.

The agreement will offer opportunities for local enterprises to acquire technologies and skills transferred by partners in the EU, improving the competitiveness of the national economy.

The MPI also underlined, however, the need for Vietnam to adopt comprehensive solutions to improve constraints relating to management policy, infrastructure, and human resources, thus meeting the needs of national economic development in general and those of investors from the EU in particular.

Incentive mechanisms should be issued to encourage and direct foreign-invested enterprises towards cooperating with domestic enterprises to form and develop supply chains, the ministry said.

It is also necessary to complete early warning mechanisms to address investment disputes, it added.