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

Posted by Reading Time: 4 minutes

ASEAN-market-watch logo

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.


Professional Service_CB icons_2015 RELATED: Corporate Establishment Services from Dezan Shira & Associates


Brunei: Automobile Sales in Low Gear in January

Automobile sales in January fell by 30.8 percent according to the Brunei Automobile Traders Association (BATA). The country’s auto industry shrunk by 20.40 percent in 2015. Average monthly sales are around 1,300 automobiles. Industry analysts say that automobile sales are expected to be slow in the coming year as the country reduces spending on projects due to low energy prices.

In addition to falling commodity pricing, the automobile industry has also suffered due to tighter lending regulations issued by the central bank and aimed at reducing debt among individuals. The newly implemented loan cap, also known as the Total Debt Service Ratio (TDSR), has severely restricted car purchases. The limit is currently set at 60 percent for those earning a minimum net salary of US $1,750. While the central bank implemented these limits to curb debt and encourage savings, it has constrained the availability of credit and thus discouraged consumers from buying vehicles. Experts believe that car sales are expected to further drop even during the upcoming festive season.


Related-Reading-Icon-Asean Link RELATED: ASEAN Open Skies Policy to be implemented in 2015


Laos: Thai AirAsia Flies into Luang Prabang

Thailand’s low-cost carrier (LCC) Thai AirAsia (TAA) became the first LCC to operate flights to Luang Prabang after an eight year wait. While ASEAN’s open sky policy theoretically obligates member states to allow airlines of member countries to operate flights to their countries without barriers, Laos has been reluctant to do so. Government officials have stated that the delay in granting permission to TAA was to understand the LCC model rather than protect state-owned Lao Airlines. The first flight will commence on March 24 and TAA plans to expand to the capital Vientiane in the future.

Luang Prabang remains significant as it is one of the fastest growing tourist destinations in Southeast Asia. More than 4 million tourists visit Laos each year, with half of them coming from Thailand. Tourism accounts for 3-4 percent of the country’s GDP. In addition, Malaysia AirAsia, HK Express and Silkair are also planning to launch flights to Luang Prabang to capitalize on the tourist traffic. While slow, the development underlines the authorities’ stance to open up the aviation sector to cater to the booming tourism industry.




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 or visit

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.

Related-Reading-Asean Book Title

The 2015 Asia Tax ComparatorAB 1214 Cover small small
In this issue, we compare and contrast the most relevant tax laws applicable for businesses with a presence in Asia. We analyze the different tax rates of 13 jurisdictions in the region, including India, China, Hong Kong, and the 10 member states of ASEAN. We also take a look at some of the most important compliance issues that businesses should be aware of, and conclude by discussing some of the most important tax and finance concerns companies will face when entering Asia.

Manufacturing Hubs Across Emerging Asia 
In this issue of Asia Briefing Magazine, we explore several of the region’s most competitive and promising manufacturing locales including India, Indonesia, Malaysia, Singapore, Thailand and Vietnam. Exploring a wide variety of factors such as key industries, investment regulations, and labor, shipping, and operational costs, we delineate the cost competitiveness and ease of investment in each while highlighting Indonesia, Vietnam and India’s exceptional potential as the manufacturing leaders of the future.

An Introduction to Tax Treaties Throughout Asia
In this issue of Asia Briefing Magazine, we take a look at the various types of trade and tax treaties that exist between Asian nations. These include bilateral investment treaties, double tax treaties and free trade agreements – all of which directly affect businesses operating in Asia.