We keep hearing this question and we want to give you an answer in this article with supporting thoughts. Yes, ASEAN is definitely a good place to do the business and you will find out why in this article.
While most of the western countries are developed and have reached a sort of stagnated economy, ASEAN Region is the developing and the happening place and there is so much of scope to expand and grow here. The Asian Economic Community also regularly engages other countries in the Asia-Pacific region and beyond which means that the door is open for some amazing opportunities.
Advantages in doing business in ASEAN
- Everybody will concur that Singapore is one of the best countries in the world for doing business because of its location and its economy. And, it has been the hub or the centre for all businesses for quite some time. Other countries in ASEAN are Brunei, Cambodia, Indonesia, Lao, Malaysia, Myanmar, Philippines, Thailand and Vietnam. And, this is because the economies here support business expansion and have improved their business regulations.
- This business regulation improvement includes the ease with which the business can enter and exit along with some improved tax administration. This is only going to get better with free trade(FTA) and labour agreements. ASEAN Region has five free trade agreements (FTAs) with six Dialogue Partners, namely China, Japan, Republic of Korea, India, and Australia and New Zealand. All Parties have ratified the FTA Agreements.
- These countries have a favourable business climate which is better suited for the entrepreneurs to build up their own businesses. As the AEC will result in reinvestment in their own communities, it will lead to the creation of more jobs here. Countries such as Thailand are developing rapidly, infrastructures improving and business booming. This will only get bigger and better over the next few years.
- There are not many financing constraints here and the borrowing cost is also quite low which makes investments quite lucrative. However, if you have the capital upfront, then the rapid economic growth can also lead to impressive returns.
- Other important factors include small but nevertheless critical things such as getting the electricity and permits for doing construction. In Asia, this is normally easier and far more affordable than the costs of Western countries like the UK and USA.
- These countries provide free trade agreements which enable the exports from these countries to other countries quite easily. This will only broaden with the AEC, providing easy access to huge markets.
Compared to the advantages, the disadvantages are very few but should be mentioned.
- The only main drawback could be that the potential of the ASEAN market could reach its saturation point (personally I wouldn’t expect this to happen for 20+ years or so). However, with so many developing economies nearby, this is unlikely to be an issue for an entrepreneur.
- The Trans-Pacific Partnership, which might affect the free trade agreements. However, this should be more than counterbalanced by the increased internal and international business of the joining members of the AEC.
- There are some challenges that are faced by developing countries and these include corruption and difficult custom laws. This can be problematic, but can also sometimes make things easier. Everywhere has this, it just might be more obvious in Asia.
- ASEAN’s Economy is Projected to Grow by over 5.5% per Year and Become the 4th Largest Economy in the World by 2050. With a projected annual growth rate of over 5.5% per year, ASEAN is forecast to overtake the EU and Japan to become the 4th largest economy in the world by 2050, behind China, India, and the United States
Considering the various advantages that we have listed out here, it would be good for most businesses to look into doing business in ASEAN Region and the AEC. But, don’t wait too long, opportunities are being grabbed all the time, get in while the market is fresh and about to open up even wider.
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