Country Analysis: Vietnam Market Opportunities for Finnish Companies 2022

The Embassy of Finland in Vietnam has just released a short report by Finnish Ambassador Keijo Norvanto where he analyzes the possibilities for Finnish companies in Vietnam in 2022.

In the report, the Ambassador states that Vietnam is the fastest growing economy in Southeast Asia. Despite the recession caused by the Covid-19 pandemic, Vietnam’s GDP growth last year was estimated at 2 to 2.5 percent. 

After the initial austerity measures, Vietnam has changed its policy and is now trying to adapt to the conditions of the pandemic by opening up its economy. Growth of about 2 percent is forecast for this year, which differs greatly from the most positive forecasts at the beginning of the year. 

Uncertainty regarding travel and movement restrictions continues due to the pandemic situation and the implementation capacity of the complex administrative structure.

Moreover, the Ambassador states:

The goal of the Communist Party, the ruling Communist Party in Vietnam, is to ensure the independence and integrity of the country and its stable social development. Trade and investment are a means of developing the country, improving living conditions, and safeguarding social peace, as well as maintaining relations with foreign powers. 

Vietnam’s long-term commitment to the international economy and free trade, as well as the EU-Vietnam Free Trade Agreement (EVFTA), which entered into force in 2020, are also expected to offer new opportunities for Finnish companies to enter the Vietnamese market.

Although Vietnam is integrated into the world economy, the business environment in Vietnam is still quite challenging and difficult to understand. Despite economic openings, there is a strong protectionist trend in the country and non-tariff barriers to trade, in particular, can be surprising and unpredictable. In these situations, long-term tension, as well as a reliable local partner or long-term personal presence, is essential. The embassy serves and supports companies in market access problems to the best of their ability.

The most promising and greatest commercial potential for Finland is in the energy and natural resources sectors. Vietnam has announced a 9 percent reduction in CO2 emissions by 2030 compared to BAU levels and a goal of carbon neutrality by 2050 through the transition to renewable energy, the development of a smart grid, and greater flexibility in energy production. 

The country’s waste management is to be reformed so that only 10 percent of the waste ends up in landfills. Waste sorting, reuse, and energy recovery, as well as improving air and water quality, are areas where Vietnam needs the technology and know-how that Finnish companies have to offer. 

Vietnam is the fifth largest exporter of timber and is investing in modernizing production and increasing the degree of processing. Finnish companies can offer technology and solutions with the help of machines and equipment as well as automation. 

The IT sector is expected to grow at a rate of 10-15% in the next few years. In particular, software development and services offer significant growth potential in both the private and public sectors. Growth is being accelerated by the digitalization program launched by the Vietnamese government to improve the living standards of its citizens, covering administrative, economic, and social functions. 

The reduction in tariffs resulting from the free trade agreement has opened up new opportunities for food exports to Vietnam. The prosperous middle class is consuming more and more dairy, meat and fish products, which are also available in Finland. 

Finland is known in Vietnam as the information society, which invests in high-quality education and the utilization of high technology. Education is a sector where these strengths can be combined in a way that supports Finland’s image, whether it is the mobility of students and researchers or the provision of teaching-related technology or services in Vietnam.