The Association of Southeast Asian Nations (ASEAN), a trade-driven block of 10 Southeast Asian nations, has gained tremendous momentum in the past 50 years. Founded as a political bloc of five Southeast Asian countries, ASEAN has evolved into a 10-member economic powerhouse and is now home to some of the world’s fastest growing emerging markets. In the decades ahead, ASEAN is expected to write a new growth story with its rich resource reserves and established manufacturing base which will only be strengthened by the regional economic integration agenda of the ASEAN Economic Community (AEC).
ASEAN’s economic performance continues to outperform the global average. The region’s investment prospects look strong and consistently post impressive growth. Both intra- and extra-ASEAN trade has received its appropriate fillip from the prospect of an integrated ASEAN economy in the form of an unified market and single production platform via the free flow of goods and services, capital, investments and skilled labor. Foreign direct investment (FDI) inflows into ASEAN have surged in the last five years. In the coming years, the region will be able to enhance its attractiveness to FDI and several initiatives are on the cards to make the region compete more effectively against a global economy.
However, realizing the region’s full potential can be challenging. Liberalization of trade, integration of capital markets and standardization of legal and regulatory frameworks will be necessary to increasingthe ease of doing business in this region. The disparities in law, tax systems, financial systems, capital and exchange controls among the member nations continue to be road blocks for companies interested in ASEAN.
KPMG understands that businesses need to adopt a regional strategy to take advantage of the ASEAN growth story. KPMG member firms are well-poised to address the needs of businesses that are looking to expand or enter the region. This guide to doing business in ASEAN is part of our efforts to help international and regional companies navigate Southeast Asia with ease and success.