Determining the right market entry strategy should be the top of mind for companies around the world intending to expand and benefit from the business opportunities in Southeast Asia. Amid global uncertainties such as Brexit and the COVID-19 pandemic on some of the most significant economic powers such as the US and China, the region’s economic growth is still on the rise. From manufacturing to e-commerce, today, Southeast Asia is one of the world’s most exciting areas for doing business.
Fast-growth markets like Vietnam, Indonesia, Thailand, the Philippines, as well as the region’s hub Singapore are at the forefront of SEA’s economic growth, attracting ASEAN FDI from all over the world to expand and benefit from business opportunities presented by the large size of the young population. We invited some of the most influential leaders of professional services in these countries to a panel discussion in our webinar series to illustrate the insights and opportunities within their respective markets.
Our CEO, Drew Calin, moderated the discussion with key talking points on:
- Industry trends and ASEAN FDI (Foreign Direct Investment)
- Incorporation requirements like licensing, company structure options, and paid-up capital requirements
- Business opportunities emerging through COVID-19
- Government support for new entrants/industries
Here are some insights from the discussion:
Market Entry Strategy in the Philippines: Improved Efficiency and Upskilled Talents
- Incorporation: Digitalization and improved efficiency by the government, for example cutting down process time from 1-1.5 month to 2 weeks at SEC (first level).
- Tax incentives: Government incentives for companies doing exports on goods or services that are engaged to the country’s Investment Priority Plan (2018).
- Paid capital requirement: Down to zero for the export market and 200.000 USD paid up capital for FDI servicing the domestic market at more than 40% share.
- Business opportunities: A wealth of english-speaking talents with growing skills contributed to the BPO and KPO workforce.
- FDI advantage: Public utilities opening up to 100% Foreign Direct Investment in the Philippines to upgrade infrastructure.
Market Entry Strategy in Thailand: Thriving Healthcare Industries and Soft Loans for SMEs
- Incorporation: Streamlined and straightforward process. 2 weeks for Limited Liability Company (LLC) and 3-6 months for Board of Investment (BOI) company.
- Tax incentives: BOI is entitled to 100% ownership and may own a land and tax exemption up to 8 years.
- Paid capital requirement: 65,000 USD paid cap per foreign member that requires work permit for LLC. Significantly higher for industries that require high level technology and innovation.
- Industry advantage: Public-Private Partnership model attracting foreign investment for infrastructure projects. Example is the Eastern Economic Corridor (EEC) connecting Bangkok metropolitan area with other Thailand provinces going towards Cambodia.
- Business opportunities post-COVID: Thriving foreign investment in the medical and healthcare industry.
- COVID-19 financial aid: 70 billion USD injection in the form of soft loans for companies with good credit scores, especially SMEs.
Market Entry Strategy in Vietnam: Acquisition and Investment Opportunities
- Incorporation: 6 weeks for representative office, 2-3 months for LLC, education and health sectors may take longer.
- Business opportunities post-COVID: Vietnam has performed very well during the pandemic, so foreign investors are still keen on investing through acquisition to local businesses getting through difficulties. E-commerce and logistics are thriving.
- COVID-19 tax incentives: 10 billion USD support package for deferral of tax, lease payments, and tax reductions for SMEs.
- FDI incentives: Tax incentives for foreign investment located around disadvantaged areas, and particularly for industries like high-tech renewable energy and social good.
Market Entry Strategy in Singapore: Ease of Banking and Access to ASEAN
- Top industries: Tech, fintech, and cryptocurrency. There have been lots of innovations in terms of cyber security and mobile payments.
- Business Opportunities: Despite the small market, Singapore is regarded very well internationally in terms of IP strengths and access to the wider ASEAN region.
- Incorporation: Digital signatures are accepted, and traditional banks in Singapore now allow the opening of bank accounts online. Transparent process on registration and paid up capital.
- **Tax incentives: **Double taxation agreement with more than 80 countries, zero percent dividends tax in Singapore, zero percent capital gains.
- FDI advantage: Opportunity for external investment and 100% own of the company. Allocated funding from government and angel investors to invest fintech ventures.
Market Entry Strategy in Indonesia: Business Opportunities and Fintech-Ready Population
- Business Opportunities: Massive population of 270 million people, half of them in productive age below 30 year old. Most of them don’t have commercial banks yet, which creates opportunities for fintech.
- FDI advantage: Ongoing Omnibus Law bill to reduce impact of the negative list and to encourage foreign equity participation, hence creating more jobs.
- Incorporation: Centralized system on issuing corporate and operational licenses provided by the Omnibus Law bill.
To get in the market (also applies for other SEA countries):
- Do your research
- Find trusted local partners to help navigate through the hassle
- Identify your principal activity, check maximum foreign equity participation
- Always do your due diligence
Watch the full webinar session here:
Since April, we at Greenhouse have been working closely with our network of service providers and partners across Southeast Asia to launch a series of webinars on topics like:
- Adaptation to COVID-19
- Business opportunities
- Fast-growth markets
- Market entry strategy
- Opportunities in emerging markets
- Venture Capital
Reach out to us for any questions about this session!
All experts who have shared on this panel are actually partners of Greenhouse, and their company profiles are listed on our platform. To see a comprehensive profile of each company and approach them, click here.
BPO Business Process Outsourcing
KPO Knowledge Process Outsourcing
BOI Board of Investment
FDI Foreign Direct Investment