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ASEAN Regulatory Brief: Philippines Green Energy Initiatives, Myanmar Industrial Zone Land Use, and Brunei Companies Act Amendments

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Philippines: Tax incentives announced for companies going green

The Philippines Board of Investment (BOI) has announced that it is planning to introduce tax incentives for companies going green. The initiative under the Climate Incentives for Manufacturing (CLIMA) program will target firms in the manufacturing sector. To qualify, enterprises should promote energy efficiency and use technology that reduces greenhouse gas emissions. While the exact nature of the incentives are not known, they are likely to be in the form of capital equipment incentives and income tax holidays.

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An Introduction to Doing Business in ASEAN 2017

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By: Dezan Shira & Associates

An Introduction to Doing Business in ASEAN 2017, the latest publication from Dezan Shira & Associates, is out now and available for complimentary download through the Asia Briefing Publication Store.

What happens in and around ASEAN is one of the key factors increasingly impacting upon China and India trade flows, as well as the rest of Asia. While the ASEAN trade bloc has been in existence since 1967, it has really shown its importance in trade and commercial business flows since the rise of China over the past three decades, and through its response to China’s changing domestic demographics. Those changes – an aging and increasingly consumer demanding China – have been skillfully adapted by ASEAN to place the future of global manufacturing, and where it takes place, firmly within its own orbit.

Simply put, free trade agreements that came into effect with China and India in 2010 changed the face of Asian trade and production, and are continuing to do so. For example, bilateral trade figures between China and ASEAN’s Big Five of Indonesia, Malaysia, Philippines, Singapore, and Thailand have multiplied by factors of 500 percent since the agreement was signed. With the smaller ASEAN nations of Cambodia, Laos, Myanmar and Vietnam coming into line with their own compliance of ASEAN customs duty reductions at the end of 2015, the entire bloc offers close to zero import-export tariffs for much of emerging Asia, including the giant markets of China and India, possessing some 500 million middle class consumers between them. ASEAN therefore represents a massive trade bloc possessing free trade agreements of global strategic importance. The question of accessing ASEAN for the benefit of North American, European and other global purchasing and manufacturing executives is a key function of this report.

An Introduction to Doing Business in ASEAN introduces the fundamentals of investing in the 10-nation ASEAN bloc, concentrating on economics, trade, corporate establishment and taxation. We also include the latest development news in our “Important Updates” section for each country, with the intent to provide an executive assessment of the varying component parts of ASEAN, assessing each member state and providing the most up-to-date economic and demographic data on each. Additional research and commentary on ASEAN’s relationships with China, India and Australia is also provided.

Includes:

  • An introduction to ASEAN 
  • Country profiles
  • Case studies: ASEAN as a platform for Asian growth

Our practice, Dezan Shira & Associates, has taken giant steps into the ASEAN market through the establishment of offices throughout the region, in addition to the creation of a unique alliance of firms. That, coupled with our existing long experience of handling foreign investment into China and India, puts us in a unique position of truly understanding how Asia works and how to maximize its free trade benefits.


About
 Us

Asia Briefing Ltd. is a subsidiary of Dezan Shira & Associates. Dezan Shira is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in China, Hong Kong, India, Vietnam, Singapore and the rest of ASEAN. For further information, please email asean@dezshira.com or visit www.dezshira.com.

Stay up to date with the latest business and investment trends in Asia by subscribing to our complimentary update service featuring news, commentary and regulatory insight.

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Related-Reading-Asean Book Title

dsa brochureDezan Shira & Associates Brochure
Dezan Shira & Associates is a pan-Asia, multi-disciplinary professional services firm, providing legal, tax and operational advisory to international corporate investors. Operational throughout China, ASEAN and India, our mission is to guide foreign companies through Asia’s complex regulatory environment and assist them with all aspects of establishing, maintaining and growing their business operations in the region. This brochure provides an overview of the services and expertise Dezan Shira & Associates can provide.


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An Introduction to Doing Business in ASEAN 2017
An Introduction to Doing Business in ASEAN 2017 introduces the fundamentals of investing in the 10-nation ASEAN bloc, concentrating on economics, trade, corporate establishment, and taxation. We also include the latest development news for each country, with the intent to provide an executive assessment of the varying component parts of ASEAN, assessing each member state and providing the most up-to-date economic and demographic data on each.



Human Resources in ASEANHuman Resources in ASEAN
In this issue of ASEAN Briefing, we discuss the prevailing structure of ASEAN’s labor markets and outline key considerations regarding wages and compliance at all levels of the value chain. We highlight comparative sentiment on labor markets within the region, showcase differences in cost and compliance between markets, and provide insight on the state of statutory social insurance obligations throughout the bloc. 

Donald Trump in the White House: Implications for the Future of the TPP and Free Trade in ASEAN

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By Dezan Shira & Associates

US president-elect Donald Trump’s opposition to the Trans-Pacific Partnership (TPP) is well-known and the future of the trade deal is now on tenterhooks. For the supporters of the TPP, Trump’s victory has meant that their worst fears are now going to unfold. Opponents of the trade deal are rejoicing at their expectation that Trump will now move quickly to fulfill one of his most controversial campaign promises – to abandon the TPP. Any prospects of the US renegotiating the TPP are not only bleak but also impractical – the trade deal was seven years in the making, meticulously negotiated and involved compromises from several countries on both sides of the Pacific.

Professional Service_CB icons_2015RELATED: Pre Investment and Market Entry Advisory from Dezan Shira & Associates

Implications for ASEAN

So now if the US does ultimately withdraw from the TPP, what implications will this have for free trade in the ASEAN region? Before analyzing this, it should be kept in mind that TPP’s potential failure is unlikely to have any significant immediate economic impact on the region. It was not a trade deal in force, but only offered prospects of newer free trade rules coming into effect in the near future. Instead of being a step backwards, it is more a lack of further progress as far as development of free trade in the region is concerned.

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Indirect Taxation Across ASEAN

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By: Dezan Shira & Associates

Among a myriad of factors which determine competitiveness within ASEAN member states, rates of taxation are a particularly salient judge of character for the treatment of foreign investment. In recent years, corporate income tax (CIT) has become the standard bearer for tax benchmarking, however, foreign investors will be faced with a variety of different taxes in the event that capital is committed. For those importing and exporting, indirect taxation, including value added taxation (VAT) and goods and services tax (GST) are significant forms of tax that should not be disregarded. 

In essence, an indirect tax adds to the price of a purchasable product or a payable service, thereby increasing the cost of that product or service and causing consumers to indirectly pay its rate of taxation. Indirect taxes thus differ from other forms of taxation, such as corporate income and individual income tax; both of which require a business or an individual to pay the applicable amount directly to a government.

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ASEAN Regulatory Brief: Foreign Banks in Myanmar, Thai Minimum Wages, and Increasing SME Aid in Brunei

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Myanmar: Government Approves Licenses to New Foreign Banks

The government recently gave approval to four new foreign banks to operate in the country. The four banks are as follows:

  • Bank for Investment and Development – Vietnam
  • SUN Commercial Bank – Taiwan
  • Shinhan Bank – South Korea
  • State Bank of India – India

With the issuance of these licenses, the total number of foreign banks now allowed to operate in Myanmar has risen to thirteen. A number of banks that have been approved have not opened branches yet, as they fulfill their regulatory compliance obligations. In addition, a number of banks will operate under temporary licenses for a year, and will only become permanent, once they fulfill their obligations to the government. Once the banks have been operationalized, foreign companies will find it easier to access financing, which the World Bank stated was the largest problem for business in Myanmar. The approval for the banks is a part of the government’s larger plan to attract foreign investment into Myanmar.

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ASEAN Market Watch: Malaysian FTAs, Auto Production in Brunei, and Thai Flights to Laos

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Malaysia: FTAs to be Signed in Bid to Boost Economy

Malaysia is expected to sign three more Free Trade Agreements (FTAs) this year according to International Trade and Industry Second Minister Ong Ka. The three FTAs will be with the European Union, Hong Kong and the Regional Comprehensive Economic Partnership (RCEP).

The FTAs are expected to further increase volumes in trade and investment as well as bolstering revenue. The minister further stated that the FTAs will facilitate two-way trade, with zero tax rates and no import duties on almost 90 percent of products. In addition, more FTAs are planned to further help the economy and boost two-way trade. According to data, 65 percent of trade in 2015 was due to FTAs –which removed tax and non-tax barriers. Ong further stated that his could increase to 70 percent this year.

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ASEAN Regulatory Brief: Brunei’s New Finance Rules, Eased Export Restrictions for Myanmar, and a Fight Against Graft in Indonesia

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In this edition of ASEAN Regulatory Brief, ASEAN Briefing takes a closer look at Brunei’s new finance regulations, the US’s eased export restrictions for Myanmar, and a fight against corruption in Indonesia.

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Nationality and Residency Requirements for Directors across ASEAN – Part One

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By: Dezan Shira & Associates
Editor: Steven Elsinga

asean-e1436103044232Directors are a crucial part of every company. Appointed by the shareholders, they are charged with running the company and deciding its day-to-day affairs. They often have the capacity to bind the company as well.

Given the important role that directors have in a company, some countries have chosen to attach nationality or residency requirements to being a director in companies registered within their territory. These differ strongly among ASEAN nations, with the more liberal member states not imposing any requirements, while stricter ones require half the board to be resident in the country.

This two-part article discusses the requirements imposed on directorship in each ASEAN state. Some ASEAN member states follow a two-tier board system. Where relevant, we will discuss these additional institutions as well.

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Foreign Investment Restrictions across ASEAN: An Overview of the Region’s “Negative Lists” – Part Two

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By: Dezan Shira & Associates
Editor: Steven Elsinga

This is the second installment in the series on FDI restrictions in ASEAN. Please click here to read Part One.

The legal regime on foreign investment restrictions differs strongly among the ASEAN member states. Some nations, such as the Philippines or Indonesia, use the model of a Negative List that details which sectors are closed, and which ones have equity caps. China too, follows this model.

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An Overview of IFRS Adoption in ASEAN – Part Three

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By: Dezan Shira & Associates
Editor: Maxfield Brown

ato-tax-refundIn this final installment on the Association of South East Asian Nation’s (ASEAN) adoption of International financial reporting standards, ASEAN Briefing touches on the state of harmonization in the Philippines as well as the regional bloc’s frontier economies. 

Unlike previous installments, nations covered herein present divergent opportunities for investment. The Philippines – an original member of ASEAN 6 – has a long history of financial reporting requirements, and its transition from national GAAP to IFRS is largely representative of previously covered member states.

ASEAN’s frontier economies on the other hand offer investors a relatively blank slate. The absence of preexisting regulatory infrastructure has enhanced and – in several instances – allowed swift and uncompromised convergence with international standards to take place. Although implementation of IFRS promises to reduce compliance costs for wholly owned foreign investment projects, lagging local penetration of accounting practices among other issues mandates a careful selection of local partners.

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