In the first half of 2025, the Czech Republic issued and implemented many important policies related to international trade and investment, contributing to promoting economic relations with Vietnam. First, the two countries upgraded their relationship to a Strategic Partnership in January 2025, pledging to further facilitate cooperation in economics, trade, tourism, transport and labor.

The common goal is to increase two-way trade turnover to 5 billion USD in the next few years - significantly compared to ~2 billion USD in 2024 (an increase of 80% compared to 2023). In parallel, the Czech Government is implementing the Export Strategy 2023–2033 with a focus on diversifying markets outside the EU, in which Vietnam is identified as one of the Czech Republic's key markets in Asia.

According to this new strategy, the Czech Republic will increase support for export enterprises, focusing on safe and reliable markets - Vietnam is considered the Czech Republic's leading economic partner in Southeast Asia.

Regarding trade policy and technical standards, the Czech Republic continues to effectively utilize the EVFTA Agreement. From August 1, 2020, the EVFTA has eliminated 62% of Vietnam's export tax lines to the EU, moving towards ~99.2% exemption after 7 years.

Many key products such as textiles, footwear, and seafood from Vietnam exported to the EU/Czech Republic will enjoy 0% tax after the roadmap, with many products currently exempted from tax. Thanks to this advantage, Vietnam's exports to the Czech Republic have skyrocketed - in the first quarter of 2025, it increased by 62.3% compared to the same period in 2024, reaching ~495 million USD

Products such as garments, footwear, and agricultural products from Vietnam are increasingly present in the Czech and Eastern European distribution systems, due to improved quality and meeting EU standards.

EVFTA also offers tax incentives for coffee, cashew nuts, and tropical fruits - Vietnamese agricultural products that are very popular in the Czech Republic. For sensitive products such as rice and sugar, the EU offers a 0% tax quota under EVFTA

In contrast, Vietnam has also eliminated 48.5% of tariff lines for EU goods from 2020, aiming for 99% after 10 years, facilitating Czech machinery, equipment, and components to access the Vietnamese market.

In May 2025, the two sides noted positive progress in implementing EVFTA and EVIPA; The Czech Republic is the first EU country to ratify the EVIPA Investment Protection Agreement, demonstrating its commitment to protecting investors and promoting bilateral capital flows.

Regarding investment and financial policies, the Czech Government maintains an open environment for FDI but also begins to screen sensitive projects more closely. In March 2025, the Czech Republic applied the Foreign Investment Control Law (effective from 2021) for the first time to block an investment project of a Chinese company in the field of satellite stations, due to concerns about threats to national security.

This move shows that the Czech Republic emphasizes the security factor for foreign investment in key infrastructure or high-tech industries. Regarding domestic financial laws, from January 1, 2025, the Czech Republic will implement a number of adjustments: increasing the minimum wage and loosening the threshold for VAT revenue to support workers and small businesses. 

Windfall tax to continue until 2025 for large banks and energy companies that enjoy extraordinary profits

These measures could affect labor costs and tax obligations of businesses (including Vietnamese businesses in the Czech Republic), and reflect the Czech Republic’s efforts to stabilize the macroeconomy and public finances

The Czech National Bank forecasts economic growth of about 2% in 2025, thanks to sustained investment and exports, but also warns of risks from new US tariff barriers that could disrupt trade
In terms of infrastructure and logistics, the Czech Republic continues to take advantage of its central location in the EU and its developed logistics system to act as a “gateway” for Vietnamese goods to penetrate deeper into the EU market

The Czech government also promotes high-tech and industrial cooperation: in March 2025, the Thanh Cong – Skoda joint venture inaugurated Skoda’s first car assembly plant in Vietnam with a capacity of 120,000 vehicles/year – an important milestone in industrial cooperation, taking advantage of the EVFTA roadmap to eliminate import taxes on EU cars in 9-10 years

In addition to traditional sectors (textiles, footwear, electronics, machinery), the Czech Republic and Vietnam are expanding into new industries: automobile manufacturing, digital technology, renewable energy, semiconductors, AI, cloud computing... in the direction of diversifying supply chains and catching up with future market trends.

Impact on Vietnamese enterprises: In general, the Czech Republic's policies in the first 6 months of 2025 have created positive impacts and opened up great opportunities for Vietnamese enterprises. First of all, the implementation of EVFTA brings significant competitive advantages in tariffs for Vietnamese exports. Import taxes on many items have been reduced to 0%, helping Vietnamese goods (textiles, footwear, agricultural products, seafood) to have much more competitive prices than competitors outside the EVFTA. 

Thanks to that, Vietnam quickly emerged as one of the leading ASEAN suppliers to the Czech market - export turnover increased sharply in the first months of 2025

Enterprises should take advantage of the opportunity from EVFTA to boost the export of Vietnamese products with strengths (textiles, footwear, coffee, cashew nuts, seafood, etc.). In particular, agricultural products such as coffee a favor, while EVFTA sharply reduces taxes on these items, even granting 0% tax quotas for rice and sugar - paving the way for Vietnamese agricultural products to penetrate deeper

In addition to tax incentives, the image and reliability of Vietnamese goods in the Czech Republic are increasingly enhanced thanks to improved quality. Compliance with EU standards on food safety, origin, etc. is recognized by the Czech side, helping items such as processed foods, spices, instant noodles gradually enter the Czech supermarket channel. In addition, the large Vietnamese community in the Czech Republic (~80,000 people, accounting for nearly 1% of the population) plays a role as a bridge to consume and promote Vietnamese goods

The network of markets and stores owned by Vietnamese people in the Czech Republic (typically the Sapa shopping center in Prague) is an effective distribution channel that helps Vietnamese goods (food, household appliances, handicrafts, etc.) quickly reach local consumers. Regarding investment, the Czech Republic's early ratification of EVIPA and upgrading of diplomatic relations shows that the Czech investment environment is stable and values ​​Vietnamese investors.

Vietnamese enterprises can feel more secure when investing in the Czech Republic or in joint ventures, knowing that investment benefits will be protected by the EVIPA legal framework in the near future. The fields that the Czech Republic is encouraging (manufacturing industry, clean energy, high technology, etc.) are also opportunities for Vietnamese enterprises to cooperate (for example, importing Czech machinery and equipment with preferential EVFTA tariffs, or participating in the supply chain for Czech industrial projects in Vietnam such as the Skoda automobile factory).

In addition, the Czech Republic considers Vietnam a key export market outside the EU, so it will actively support trade connections (through business delegations, fairs, intergovernmental committees, etc.), Vietnamese enterprises need to take advantage of this to find partners and expand market share

Challenges to note: Besides the advantages, Vietnamese enterprises also face some challenges when accessing the Czech market. First of all, the EU's strict technical and legal standards require businesses to invest in improving product quality, completing certificates of origin, labor safety and the environment. The Czech Republic and the EU frankly commented that Vietnamese goods still need to improve their quality and design to compete better.

Compliance with new EU regulations - such as the Carbon Border Adjustment Mechanism (CBAM) or the law against deforestation - will increase compliance costs for exporting businesses, but is a mandatory requirement to stay in this market. (The EU is currently discussing CBAM exemptions for 80% of small businesses to reduce the compliance burden, focusing mainly on large importers with high emissions.

However, from 2026, this mechanism will be officially applied, requiring Vietnamese exporters of products such as steel, fertilizers, etc. to be ready to report emissions and purchase corresponding carbon certificates.) Next, the procedures for accessing the EU market, although receiving tax incentives from EVFTA, are still administratively complicated. 

Many Vietnamese enterprises, especially SMEs, have not fully exploited the incentives due to limitations in understanding the market and export procedures (applying for EUR.1 certificates of origin, customs procedures, standard registration, etc.). This may hinder the ability to take advantage of opportunities in the Czech Republic. Therefore, enterprises need to proactively improve their compliance capacity and understanding of EU law to avoid missing out on EVFTA incentives. In addition, competition in the Czech/EU market is quite fierce. 

If Vietnamese goods shift strongly to the EU (in the context of the US tightening tax policies), it will create greater competitive pressure and may reduce selling prices. Enterprises need to be ready to improve products according to local tastes and build a sustainable competitive strategy in terms of quality instead of relying solely on price advantages. 

Finally, the Czech investment policy environment, although stable, is not entirely “easy” – the Czech Republic’s increased FDI screening suggests that projects with sensitive elements (telecommunications technology, critical infrastructure) may be subject to close scrutiny. Although investment from Vietnam to the Czech Republic is currently not large and is mainly in the small-scale trade and service sector, Vietnamese businesses planning to invest need to pay attention to complying with local laws, being transparent about capital and partners to avoid problems.

In general, the challenges in the Czech Republic mainly come from the high standards of the developed market, requiring Vietnamese businesses to upgrade themselves to adapt, but this is also a positive driving force for improvement and long-term development.

References: Policies and data in the article are compiled from the Vietnam Trade Office Portal in the Czech Republic - Slovakia and international news sources, including updates from VietnamPlus, Reuters, DW... Analyses and assessments are made based on information up to June 2025.