The vietnam-briefing.com published by Dezan Shira & Associates - a consultancy firm on foreign investment in Asia - on May 6 run an article, emphasising that since the EU-Vietnam Free Trade Agreement (EVFTA) took effect in August 2020, Belgium has played a significant role in promoting trade and foreign investments into Vietnam.

Illustrative image (Photo: VNA)

The vietnam-briefing.com published by Dezan Shira & Associates - a consultancy firm on foreign investment in Asia - on May 6 run an article, emphasising that since the EU-Vietnam Free Trade Agreement (EVFTA) took effect in August 2020, Belgium has played a significant role in promoting trade and foreign investments into Vietnam.

According to the article, major sectors that Belgian investors have particularly shown interest in is industrial zones, food and beverage, processing and manufacturing, pharmaceutical, and renewable energy.

It noted that with increasing trade and investment between Belgium and Vietnam, Belgian investors have opportunities to invest in Vietnamese industries, favoring the economic and political landscape between the two countries.

Over the past decade, trade and investment relations between Vietnam and Belgium have improved considerably. This has been attributed to Vietnam’s growing economy and the expansion and globalisation of some Belgian corporations.

The article quoted Riccardo Benussi, Head of European Business Development of Dezan Shira & Associates, saying that more Belgian companies are looking to invest in Vietnam, especially with the implementation of the EVFTA and subsequent reduced tariffs.

As of March 2021, Belgium has 78 investment projects in Vietnam, with a total registered capital of 1.1 billion USD, ranking 23rd among 131 countries and territories investing in Vietnam.

On the other hand, Vietnam is Belgium’s 14th largest trade partner, with a trade value reaching approximately 707.55 million USD in 2020, up 6.7 percent compared to 2019.

In the first seven months of 2020, due to the COVID-19 pandemic, Vietnam’s export value to Belgium totaled 1.4 billion USD, down 17.7 percent year-on-year. On the other hand, Vietnam imported 459 million USD worth of goods from Belgium, up 11.9 percent year on year.

The article said these figures demonstrate that while Vietnamese exports to Belgium experienced a depression, Belgium’s exports to Vietnam still grew, which is a positive signal for the future of bilateral trade between the two countries.

In 2019, within the EU, Belgium was the seventh-largest exporter to Vietnam and the sixth-largest in 2018. Belgium’s top exports to Vietnam in 2020 are chemicals (46.2 percent), and machinery and equipment (13.7 percent). Meanwhile, Vietnam’s top exports to Belgium were textiles, footwear and headgear, and base metals.

The most substantial Belgium investment in Vietnam is the development and operation of an industrial park cluster known as the Deep C Industrial Zone (initially named the Dinh Vu Industrial Zone – DVIZ).

Geert Dom, Head of Marketing & Sales for DEEP C Europe and the US, said that DEEP C has attracted over 130 projects with foreign investors of different nationalities such as Belgium, Germany, Japan, the Republic of Korea, the US, and Singapore. Looking towards the future, DEEP C is still attracting more Belgian and other investors to do business and establish factories and warehouses in this industrial zone.

Meanwhile, Filippo Bortoletti, Senior Manager for Dezan Shira’s Hanoi Office, noteed that apart from industrial zones, Belgian investors also play a significant role in the Vietnamese food and beverage (F&B) industry.

Belgium investments are focused on the supply chain of the industry, catering ingredients to restaurants, F&B factories, and retail, he said.

Vietnam’s manufacturing and processing industry also proves to be a prospective investment sector for Belgium corporations. Over the years, most of the investments that Belgian investors have made in Vietnam are in seaports, infrastructure, real estate, manufacturing, and power generation.

Pharmaceuticals is also a significant sector for foreign investment in Vietnam. Most EU investors source raw pharmaceutical materials from the EU, ship them to Vietnam, manufacture and process the products in Vietnam before they re-import the products back to the EU.

Thanks to the EVFTA, about 71 percent of import tariffs have been eliminated. Moreover, non-tariff barriers also brought opportunities in improving intellectual property rights and direct pharmaceutical imports. This means that Belgian investors can establish an entity to import pharmaceutical products and sell to local distributors or wholesalers. In addition, Belgian investors are also eligible to build warehouses and perform clinical research and trials, the article said.

The article also noted that Vietnam is an attractive investment destination for green energy production projects, and it is predicted that many foreign investors, especially those from the EU, will continue to establish and expand their businesses in this sector in the country.

The increase in bilateral trade between Belgium and Vietnam, as well as the increasing FDI from Belgium, demonstrate bright prospects for the two countries’ relations, it said, adding that the long-term presence and successful investment of Belgian companies in Vietnam offer a good indication and reference for business opportunities in the country./.