ASEAN Advantages – Useful information about Asean Countries
ASEAN is a close knit community established between few countries in the Asian region for better mutual co-operation in social and commercial way of life. Today, ASEAN provide great opportunities for business investors and promises to deliver to their expectations.
The Association of Southeast Asian Nations, or ASEAN, was established on 8 August 1967 in Bangkok, Thailand, with Indonesia, Malaysia, Philippines, Singapore and Thailand, joining hands initially. Since then ASEAN has made good strides in regional integration and co-operation by unique modes of governance and adding Brunei, Vietnam, Myanmar, Lao and Cambodia as members. The social and economic integration initiatives are into it’s early stages and we all hope that the real regional co-operation would surface after 2015.
As set out in the ASEAN Declaration, the aims and purposes of ASEAN are:
- To accelerate the economic growth, social progress and cultural development in the region through joint endeavors in the spirit of equality and partnership in order to strengthen the foundation for a prosperous and peaceful community of Southeast Asian Nations;
- To promote regional peace and stability through abiding respect for justice and the rule of law in the relationship among countries of the region and adherence to the principles of the United Nations Charter;
- To promote active collaboration and mutual assistance on matters of common interest in the economic, social, cultural, technical, scientific and administrative fields;
- To provide assistance to each other in the form of training and research facilities in the educational, professional, technical and administrative spheres;
- To collaborate more effectively for the greater utilization of their agriculture and industries, the expansion of their trade, including the study of the problems of international commodity trade, the improvement of their transportation and communications facilities and the raising of the living standards of their peoples;
- To promote Southeast Asian studies; and
- To maintain close and beneficial cooperation with existing international and regional organizations with similar aims and purposes, and explore all avenues for even closer cooperation among themselves.
ASEAN the upcoming business hub
ASEAN region which has been solely dependent on export for their growth over the past is now trying to rebalance their economies with the help of local demand as part of an intentionally planned move in theirbusiness development in Asia and other regions and growth strategies. Without a doubt, most of the ASEAN economies are showing remarkable growth and the investment projections appear to be strong.
ASEAN at present is a trade focused block and it is anticipated that the thrust will continue in the coming decades ahead, with the rich supplies of resources and well-established industrial base which would be further improved by AEC. With the promise of a single production podium and an integrated market, the drive for Intra and inter-ASEAN trade will get a thrust and will hold the key for future.
However, due to the fluctuations in demand globally, there are risks and numerous concern which are continuously growing related region’s growth. It requires ASEAN to foster and bridge the gaps which remain between the members and follow some rigorous policies to bolster growth.
Insights on ASEAN region
1. Economic Powerhouse:
With a collective GDP of $2.4 trillion as of 2013, ASEAN is projected to be the fourth largest economy by the year 2050. ASEAN is home to more than 600 million people and with its labor force and consistent productivity improvements can drive the GDP to higher levels. ASEAN labor power is the third largest in the world after China and India.
2. Economic Stability:
ASEAN has seen the global downturn of 2008 and remained unaffected and remarkably resilient. Today, ASEAN is much stronger financially with government debt below 50 percent of its GDP, which is much lower as compared to United Kingdom where the debt is 90 percent of its GDP or United where the score stands at a whopping 105 percent. Furthermore, most of the ASEAN’s region has remained steady despite various concerns over thepossible end of quantitative easing by US Federal Reserve. In contrast, ASEAN has seen lower volatility than the European Union with respect to economic growth. Even the savings levels have been fairly stable within the region post-2005.
3. Consumer demand hub:
The region has 67 million households which are part of the consuming class, which is expected to double by 2025, making ASEAN one of the biggest consumer market for the businesses globally. The cities in the region are booming and more than 22 percent of the total population resided in the cities. The urbanization is on the rise and urban population accounts for more than 54 percent of the total GDP. It is expected that further 54 million habitants will join the cities by 2025 and will ultimately boost the GDP.
4. Online consumer presence:
With internet penetration of 25 percent and mobile penetration of massive 110 percent, consumers are moving online at an increasing pace. For instance, it has the second largest Facebook user community after the United States. It also has some highly advanced consumers in regions like Singapore, which has the fourth highest mobile penetration in the world and nearly 75 percent of its total population remains online.
5. Globally well positioned:
Trailing by North America, the European Union, and China, ASEAN is the fourth largest exporter in the world, accounting for nearly 7 percent of all the global exports taken together. Most of it member nations have sophisticated manufacturing setup and have been performing reasonably well. For instance, Malaysia and Singapore are leading the electronics export, Thailand is gearing the automotive parts and vehicles and Vietnam specializing in apparel and textiles. Apart from these member nations, you have Indonesia which is now a leading producer and exporter of palm oil, the Philippines which is thriving with its business startup consulting and outsourcing industry along with Myanmar with its vast reserves of gas, oil, and precious minerals. ASEAN has now replaced China’s dominance in the global market as a premier exporter.
6. Interregional Trade:
With better integration and implementation of various cross-border trade policies, ASEAN is expected to have a smoother and healthy flow of goods and services across its borders. It has also expanded its trade with various free-trade agreements with countries like China, Australia, India, New Zealand, Japan, and South Korea.
7. Home to global businesses:
ASEAN is home to most of the biggest companies in the world. ASEAN has more than 227 global companies having revenue of more than $1 billion. Singapore is ranked fifth in the world in terms of having themost number of corporate headquarters.
8. Foreign Direct Investment (FDI):
FDI has been booming in the region and has attracted nearly $128 billion in 2013 as compared to China’s $117 billion. Not just foreign corporates, ASEAN is now a Launchpad for many of the new companies. With its distinct cultures, languages and histories, its ten member nations share focus on economic development and mutual prosperity. ASEAN’s household purchasing power is on the rise which is assisting the region in approaching a higher level of consumer growth.
9. Exceptionally diversified:
ASEAN is home to world’s most diversified population. Indonesia has the world largest Muslim population with nearly 90 percent of its people belongs to theIslamic faith. The Philippines has more than 80 percent Roman Catholic whereas Thailand comprises of 95 percent of Buddhist. Having such a diverse yet unified economy provides uniqueness to this region.
ASEAN as a region occupies about only 3 percent of global land mass but has more than 20 percent of all the known species living deep in its jungles, mountains, lakes, rivers and seas.
Thailand – The Startup Destination in Asean
Thailand was one of the five founding members of ASEAN and is instrumental in forming and developing ASEAN Free Trade Area (AFTA). With six primary members (Singapore, Thailand, Indonesia, Philippines, Malaysia, and Brunei) AFTA came into force on 1 January 2010 thereby dipping the import duties to nil. Thailand has been a cost-competitive and cost-effective location for investors and offers expatriates’ quality lifestyle. Thailand also offers a welcoming culture with positive business regulatory framework along with the healthier macroeconomic environment.
We try to list down some of the reasons to understand why starting a business in Thailand is rewarding:
• Strong business framework – Thailand is known for its well-established infrastructure, pro-investment policies and free-trade economy. With an average growth rate of 4 percent, Thailand is experiencing a steady growth since 2000.
• Better trade relations – Thailand celebrated the175th anniversary of their business alliance with the United States in 2008 and is the 23rd largest trading partner for the United States.
• Ease of doing business – It has been ranked 13th as the easiest place of doing business in the world. It is also considered as one of the chief destination for Foreign Direct Investment (FDI). Thailand has also been ranked 11th globally for protecting investors interest, 10th for cross-border trading and 25th for enforcing contracts. Hence, doing business in Thailand is now easier and less complicated.
• Attractive tax rates – Thailand offers low corporate taxes, ranging from 30 percent down to 10 percent based on various criteria which include profits, status under the Thai law and company listing on the Stock Exchange of Thailand. Additionally, the Investment Board provides several investment incentives which significantly shrink and reduce tax liabilities.
• Modern Infrastructure – If you are looking to set up a business, Thailand is the one of the best choices for you.
Furthermore, if you are an entrepreneur having a global presence and looking for a centralized office, Asia, particularly Thailand is the ultimate destination due to its low-cost of operation. Thailand is comfortable place for living with readily accessible high speed internet and all around WiFiavailable everywhere you go.
Starting a business in Thailand is considerably easier in terms of dealings, duration and cost paralleled to China, India, Malaysia and Vietnam. Fewer startup hurdles in Thailand permit businesses and entrepreneurs to swiftly place their resources to fruitful uses.Thailand entails the lowermost number of processeswith the shortest time to register and do business in Thailand.
It required only two procedures, two days and costs 6 percent of the business valuefor registering a property. Starting a company in Thailand also competes favorably with fewer business start-up requirements. Further, Thailand market economy was considered for the highest index for financial information and disclosure of ownership to investors by the World Bank. Regulations in Thailand require businesses to revealownershipinformation, such as beneficialand indirect ownership,family, financial performance and the exact nature of transactions related to business.By encouraging and enforcing transparency and also legal protection from expropriation aids foreign investors in Thailand and creates more business opportunities in Thailand.
Boutique Business Consulting firms like Startup in Thailand knits the ASEAN region by assisting them to do business with a complete 360 degrees approach which encompasses all kind of business startup services like Startup | Market Entry | Legal | Serviced Office | Factory Setup | Representation | Recruitment |Accounting | Operations | Sourcing | Buying | Distribution | Marketing | Regional Business Development | Management
ASEAN 2017 – What’s New
With the official formation of the AEC (ASEAN Economic Community)by the end of 2015, there is a rising anticipation that the 10 strong trading alliances of South-East Asian countries will before long surprise to express its mettle as an economic power in the world. With the change of stride in China’s economy and headline-seizing growth story of India, many economic and political critics will see the expansion of ASEAN,with the world pivoting towards Asia.
For those doing business in theAsia region, the numbers are impressive which demonstrate the region’s growth. Its economy is fore casted to raise at 5 percent annually till 2020, which is exceeding the global growth of 3.5 percent per year. Its metropolitan population is rising by around 2.2 percent annually, whereas the population of the middle-class is set to surge to 194 million by 2020.
Transformation in Retail
In developed ASEAN markets, retail through online sales has already been up 5 to 15 percent of the total; with retail per capita has increased dramatically. South-East Asia is achieving higher online shopping penetration than in other developed marketplaces such as the UK and US. As per the research conducted by Bain & Company, 50 to 90 percent of customers in South-East Asia who are residing outside cities are avoiding their PCs and are using mobile phones online shopping.
Infrastructure and Traffic Management
Mass rapid transportation development projects are under construction in Kuala Lumpur,Singapore, Manila, Jakarta and Bangkok which will raise rail length by 50 percent by 2020. With respect to real estate, it will generate newer centers, new opportunities for investment and the prospects to build mixed-use innovative developments which will enable people’s capability to work, live and play much easily.
Newer skills and technologies with new uses for present technologies make it possible in transforming the movement within cities. Autonomous driving, intelligent traffic management and car-sharing are projected to streamline over crowding and boost mobility. Traffic jams in cities such as Manila and Jakarta are renowned which is due to insufficient investment in projects related to mass rail transit. Though, platforms like Grab, Uber and Waze are permitting mobile-phone data in order to improve efforts by the government in traffic management.
Innovation at work
Serviced office and co-working space presently accounts for 1 to 5 percent of total Asia office in developed ASEAN cities and is mounting rapidly due to the flexible working, freelancing and sharing economy. It is estimated that in South-East Asia co-working spaces would make up 10 to 15 percent of total by 2030.
With regard to work, demand for office will change because of larger outsourcing coming from the developed markets, rise in co-working spaces and more elastic work practices. Even though the growth of worldwide office demand reduced subsequently after the financial crisis, the region has resisted the trend. It is expected that office demand will grow by 6 percent per year till 2020 due to growing economy which in turn will spur outsourcing from the developed markets and will raise the middle class.
ASEAN – Next Steps
ASEAN is determined to board on a long-term and bold and strategy to improve its logistics connectivity in order to operate in a seamless and an efficient manner towards its journey to economic integration. On the execution of the ASEAN Economic Community, the total region will reap benefit out of this single production and the single market. Though, the profits are not predicted to be equal among its member countries nor within the provinces inside the member countries. It is surely a win-win position but subject to the perception taken, the AEC’s appeal to each ASEAN countries might be not the same.
If the businesses choose to select the expected GDP growth as a crucial factor then Myanmar’s as the key target for upcoming expansion would not be astonishing but carefulness would still be required. The higher levels of expected growth are partial because Myanmar begins with a lower GDP level as compared to other member countries, and hence facilitation environment and infrastructure have a great in fluenceon the country’s development.
Master Plan on ASEAN Connectivity (MPAC)
The MPAC is intended to allow the AEC and enhance ASEAN’s inner integration with the help ofimproved infrastructure development, efficient and effective international institutional measures as well as connectivity for the citizens. The plan is founded on the key principles listed below:
(i) Aid in accelerating existing ASEAN enterprises and accompaniment the building process by ASEAN Community;
(ii) Adopt win-win measures in reflecting the welfare of all Member States of ASEAN;
(iii) Ensuring synchronization of continuous sector plans and policies within the contexts of ASEAN and also its sub-regions;
(iv) Striving for a balance between national and regional interests;
(v) Strengthening the connectivity between archipelagic and mainland Southeast Asia;
(vi) Outward-looking and serving to endorsevigorous competitive dynamic forces among outside partners and also helping in preserving the significance of ASEAN; and
(vii) Viable in practice with strong financial mobilization models, with the participation of the private sector.
The final result would be that distribution and production grids in ASEAN will be extended and deepen with respect to logistics assimilation, broadened with more products and commodities being traded competitively, and finally, become much more ingrained in supply chains globally. A like significant, improved ASEAN logistics integration would taper growth gaps within the ASEAN expanse as the human prospects of the region is unlocked over this bigger connectivity in lagging, which are often remote countries. It will also help in increasing greater investment opportunities,growth and trade lagging regions within nations in ASEAN.
For any business support in ASEAN region, please write to us for a free consultation by our Asian Director.
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