Regional Actors

Taxation in ASEAN: An Introduction

Posted on by

By Dezan Shira & Associates

The Association of Southeast Asian Nations (ASEAN) represents a highly integrated economic region when compared to other parts of the world. Yet, in terms of taxation, there is a wide variation among its 10 member states namely, Brunei, Laos, Cambodia, Indonesia, Myanmar, Malaysia, Philippines, Singapore, Thailand, and Vietnam. Apart from the reduction of import tariffs, ASEAN tax coordination is limited to the elimination of certain withholding taxes and the completion of the network of double tax treaties among all ASEAN countries. Companies that are looking to enter emerging markets in ASEAN must take note of the various taxes they may be subject to, and their variation across the region. Applicable taxes for foreign businesses include Corporate Income Tax (CIT), Personal Income Tax (PIT), Withholding Tax, as well as indirect taxes such as Value Added Tax (VAT), and Goods and Services Tax (GST). The impact of the different taxes, tax rates and tax bases on the effective tax burdens, however, may differ according to the type of investment, the source of finance and the profitability of an investment.

Continue reading…

Design Rights Protection in South East Asia

Posted on by

By: South-East Asia IPR SME Helpdesk

It is essential for SMEs doing business in South East Asia to protect their intellectual property rights, as poor IP strategy often leads to the end of the business endeavor in the region. Design rights are useful, but oftentimes overlooked means of protecting IP in South East Asia.

An industrial design right, also known as a design patent in certain jurisdictions, is an exclusive right, which protects designs which give a competitive edge to the owner over competitors due to their aesthetic appeal. Industrial designs can take the form of either two- or three-dimensional shapes, configuration or patterns. Prominent examples include the iPod, shape of the Coca Cola bottle, computer icons, and even the design of mobile applications.

To obtain industrial design protection, SMEs must file an application to register the design in all the countries they foresee business activities, since design rights like other IP rights are territorial. Like patents, protection for industrial rights lasts for a limited period and the duration can vary from country to country. Generally, protection lasts for at least 10 years.

Furthermore, industrial rights protection can be an asset to businesses. The success of a product or service is usually influenced by its visual appearance, where aesthetic appeal is one of the critical factors influencing consumer decisions. It is thus important for SMEs to draft a protection strategy matching the business strategy for the product or service in question.

Continue reading…

Investing in Thailand: Tax and Non-Tax Incentives

Posted on by

By Dezan Shira & Associates
Editor: Vasundhara Rastogi

ASEAN Briefing-Thailands Investment Outlook for 2018 (002)

Thailand’s Board of Investment (BOI) offers a range of tax and non-tax incentives to foreign companies making investments that are deemed highly beneficial to the Thai economy.

In 2015, the BOI announced a new seven-year investment promotion strategy (2015-2021) that offers special privileges to foreign investors. Under the strategy, tax-based incentives are granted according to the group classification (A or B) for the activities and the merit of the project (if any), whereas non-tax benefits are available to all projects regardless of the type of activity or conditions.

Continue reading…

Key Highlights of Cambodia-China Double Taxation Treaty

Posted on by

By Dezan Shira & Associates
Editor: Vasundhara Rastogi

Recently, China’s State Administration of Taxation (the SAT) released an announcement, setting out the effectiveness of the new China-Cambodian Double Taxation Treaty (DTT) and the associated protocol. The new DTT – signed on October 13, 2016 – entered into force on January 26, 2018, and will be applicable to income received on or after January 1, 2019. 

The treaty aims to create a clear legal framework built on increased fiscal transparency that will improve the tax collection mechanism between the two countries and increase cross-border trade and investment.

It is important to note that the DTT does not apply to Hong Kong or Macau, as these regions have a separate tax system and do not fall under the taxation laws of the People’s Republic of China.

Continue reading…

Laos Increases Minimum Monthly Wage for the Third Time in Eight Years

Posted on by

ASEAN Regulatory Brief

By Dezan Shira & Associates

The Lao government has increased the country’s monthly minimum wage from Kip 900,000 (US$108) to Kip 1,100,000 (US$132) with effect from May 1, 2018. An increase of 11 percent, the wage increase will apply to all businesses and factories established in the country. This is the third such raise in the last eight years. In early 2012, the minimum monthly wage doubled from Kip 348,000 (US$41.5) to Kip 626,000 (US$74.7). In 2015, it rose to Kip 900,000 (US$107.4).

Continue reading…

The Philippines’ FTA with the European Free Trade Association Enters into Force in June

Posted on by

By Dezan Shira & Associates
Editor: Vasundhara Rastogi

The Free Trade Agreement (FTA) between the Philippines and the European Free Trade Association (EFTA) will enter into force for Switzerland and the Philippines on June 1, 2018. In March this year, the Philippines’ Senate ratified the FTA with the EFTA as part of the country’s strategy to gain a stronger foothold in the European market. The EFTA comprises of some of the world’s wealthiest nations – Iceland, Liechtenstein, Norway, and Switzerland.  Once implemented, the agreement will be the Philippines’ second bilateral FTA after the Japan-Philippine Economic Partnership Agreement (JPEPA) in 2008.

Continue reading…

Myanmar’s Daily Minimum Wage Increased from Kyat 3,600 to Kyat 4,800

Posted on by

ASEAN Regulatory Brief

By Dezan Shira & Associates

Myanmar’s union government has increased the country’s daily minimum wage for an eight-hour work day from Kyat 3,600 (US$2.65) to Kyat 4,800 (US$3.54). The revised wage, which came into effect from 14 May will apply to all businesses with 10 or more employees irrespective of the location or type of work.

Continue reading…

Cambodia Grants Validation to European Union Patents

Posted on by

By Dezan Shira & Associates
Editor: Vasundhara Rastogi

In January 2017, the government of the Kingdom of Cambodia and the European Patent Organization (EPO) entered into an agreement on validation of European patents. The agreement came into effect on March 1, this year and makes Cambodia the first Asian country to grant validation to European patents. Similar agreements have come into force between the EPO and Morocco, between the EPO and Moldova, and between the EPO and Tunisia in the last three years.

Continue reading…

Corporate Taxes in the Philippines

Posted on by

By Dezan Shira & Associates
Editor: Vasundhara Rastogi

In the Philippines, all companies – domestic or foreign – are liable to pay corporate income tax (CIT). The tax liability for a corporation is determined by its residency status and is based on the net income it obtains while carrying out its business activity, normally during one business year.

Residency status of a company

A company is regarded as a resident if it is incorporated under the tax laws of the Philippines or as a foreign resident corporation that is duly licensed by the Philippine Securities and Exchange Commission (SEC) to engage in trade or business in the Philippines.

While a domestic company is taxed on its worldwide net taxable income, a foreign company – resident or non-resident -, is taxed only on income that is received in the Philippines, or that arises or is deemed to accrue in the country. Non-resident foreign corporations, however, are taxed on gross income derived from the Philippines.

Income tax does not include dividends received from domestic corporations; interest on Philippine currency bank deposit and yield or any other monetary benefit from deposit substitutes and from trust funds and similar arrangements; and other passive income previously subject to final taxes.

Continue reading…

Corporate Establishment in Thailand: What You Need to Know

Posted on by

By Dezan Shira & Associates
Editor: Vasundhara Rastogi

ASEAN Briefing-Corporate Establishment in Thailand What You Need to Know (002)

Foreign investors contemplating new business undertakings in Thailand should carefully consider the Thai Foreign Business Act B.E. 2542 (FBA) before setting up operations in the country. The FBA is the main law that governs the extent of foreign participation in business activities in Thailand; it limits the rights of foreigners to engage in certain businesses, commercial, and industrial activities in the country.

Under the FBA, a business entity is deemed ‘foreign’ if:

  • It is registered under the law of another country – including all branches, representative offices and regional offices of overseas companies operating in Thailand; or
  • It is registered under Thai law
    • with 50 percent or more of its capital shares held by non-Thais (individuals or business entities);
    • with 50 percent of its capital invested by non-Thais; or
    • has foreign individuals as its managing partner or manager.

Continue reading…

Never Miss an Update

Subscribe to gain even better insights into doing business in ASEAN. Subscribing also lets you to take full advantage of all our website features including customizable searches, favorite, wish list and gift functions and access to otherwise restricted content.

Scroll to top