Tricor Group - ASEAN Business Guide 2022

TRICOR, AT YOUR SERVICE Asia’s Leading Business Expansion Specialist

ASEAN BUSINESS GUIDE 2022 Business intelligence and insights, compiled by Tricor Group, to guide companies and entrepreneurs interested in establishing, operating and scaling their business in the markets of the Association of Southeast Asian Nations (ASEAN).

FOREWORD The center of the global economy continues to gravitate east, accelerated by unprecedented GDP growth and the rise of foreign direct investment (FDI) throughout the Asia Pacific (APAC) region. In particular, the growth of FDI has been a key driver of success for the emerging economies of the Association of Southeast Asian Nations (ASEAN), which are the focus of this guide.

ASEAN markets come of age

Originally founded as a political bloc of five countries in Southeast Asia, ASEAN has evolved into a 10-member economic powerhouse. The ASEAN Economic Community (AEC) is now home to some of the world’s fastest growing markets, where hundreds of millions of people have joined the ranks of the middle class.

ASEAN’s rapidly rising middle class is driving domestic consumption and fueling the demand for more discretionary and aspirational products and services – with a focus on quality, convenience and choice.

Very often, the hardest question to answer when it comes to business expansion is where to start. After all, there are so many markets in ASEAN to choose from. For example, Singapore, one of the founding members of ASEAN, has long earned high marks from global investors for its economic stability and businessfriendly environment. This longstanding track record and increasingly favorable economic conditions are making Singapore a strategic ‘gateway to ASEAN’ for MNCS wishing to set up shop or strengthen their market position in the ASEAN region. On page 68 of this report, we take a deeper dive into Singapore’s role as a launchpad for MNCs expanding into ASEAN.

In the upcoming decades, ASEAN will write a new growth story. Bolstered by AEC’s economic integration agenda – as well as the recently passed landmark Regional Comprehensive Economic Partnership (RCEP) – the region’s rich resource reserves, established manufacturing base and rapid industrialization will continue to attract investors from around the globe.

We see significant opportunities for the private sector across a number of industries, especially in the postpandemic period. However, innovative strategies must be adopted in order to navigate the region's complex dynamics and seize business growth opportunities.

2 Tricor Group

Our objective for this guide is to share critical business intelligence, as well as our expertise and insights. We hope to provide guidance and support for companies and entrepreneurs interested in establishing and expanding their businesses across ASEAN.

Those already familiar with ASEAN know it is far from homogenous. Rather, the region is significantly diverse in ethnicities, languages, cultures, regulations, financial systems and borders. With this guide, we hope to briefly introduce each market and provide inspiration for tapping into bourgeoning opportunities. Careful consideration will be needed when deciding which of these markets is the right choice for the initial and expanded footprint of your business in ASEAN.

Notably, frontrunners for success in ASEAN will be enterprises that are prepared to build strategic business-to-business partnerships, collaborate with local companies and aptly position themselves within the local ecosystem. Of course, all products, services and business models will need to be adapted to suit local economic conditions and cultures.

A trusted partner with deep ASEAN expertise To reduce the risks of global expansion, it is essential to secure on-the-ground knowledge, relationships and experience through a trusted partner. Opting to expand your business in ASEAN may seem low cost initially, but it is rarely worth the liability of doing it alone. Aside from the obvious language and cultural barriers, local regulations and regulatory frameworks can change regularly, often without international notification.

Tricor understands global businesses must adopt a tailored regional strategy if they want to be part of the ASEAN growth story. Our dedicated teams in each ASEAN market know the ‘ins and outs’ of the markets they serve. Backed by this niche expertise, we help businesses circumvent pitfalls, build strategic relationships and seize emerging opportunities.

At Tricor, we provide comprehensive and integrated solutions to our clients in ASEAN, APAC and beyond.

Over the past 20 years, Tricor has helped ~50,000 clients navigate the myriad of administration, tax, accounting and compliance issues that come with doing business in the region.

Our professional specialists can provide support to your business at every stage of its life cycle. Tricor’s range of services include: business advisory; entity formation; corporate governance, corporate administration & secretarial; trust & fiduciary services; accounting & financial reporting; payroll, payment & treasury administration; services for new issues / initial public offerings (IPO) & registry management; tax services; mainland China entry & consulting; executive search; human resources consulting; fund administration; and governance advisory.

understanding of local laws and regulations. Moreover, we enjoy a dynamic network of relationships that will simplify your operations, while ensuring efficiency and compliance.

With ~3,000 professionals and support staff available to meet the needs of our clients across this region, Tricor delivers critical finance, human capital management and compliance services where and when you need them. We proudly enable our clients’ in-house teams to focus their time and efforts on core business functions.

Entrusting a dedicated service provider, such as Tricor, can eliminate the hurdles that come with managing a global workforce, ease your administrative burdens, mitigate risks and even connect you with the right local partners in the ASEAN markets.

Tricor is well-positioned to unlock the potential of your business across ASEAN, and help your company stay one step ahead of today’s diverse and fast evolving regulatory environment. Strategically located in the heart of APAC, we operate across a network of offices in 49 cities across 22 countries / territories.

Our client portfolio includes over 1,300 companies listed in Hong Kong and Mainland China, ~600 companies listed in Singapore and Malaysia, over 40% of the Fortune Global 500 companies, as well as a significant share of multinationals, private enterprises and SMEs operating across international markets.

With the above-mentioned credentials, Tricor is the leading APAC business expansion specialist, with a core focus within ASEAN. We are proud to be at your service – providing the building blocks for and catalyzing every stage of your business growth, from incorporation to IPO.

Lennard Yong Group CEO Tricor Group

Tricor differentiates itself because we are a proudly homegrown operation headquartered in Hong Kong SAR and focused on business growth in APAC. Across our geographical footprint, we offer the optimal blend of in-depth industry expertise and up-to-date

ASEAN Business Guide 2022 3

CONTENTS FOREWORD

2

01

WHY ASEAN?

8

02

OVERVIEW OF ASEAN MARKETS

24

03

BUSINESS INCORPORATION

38

04

TAX CONSIDERATIONS

46

05

LABOR ENVIRONMENT

56

06

ASEAN: THE LEVER FOR CHINA’S REGIONAL PLANS

64

07

SINGAPORE: THE GATEWAY TO ASEAN

68

08

OPPORTUNITIES & CHALLENGES

74

09

CASE STUDIES

78

10

CLIENT TESTIMONIALS

82

11

HOW TRICOR CAN HELP

86

REFERENCES

88

01 WHY ASEAN?

WHY ASEAN?

OVERVIEW OF ASEAN MARKETS

BUSINESS INCORPORATION

TAX CONSIDERATIONS

LABOR ENVIRONMENT

ASEAN: THE LEVER FOR CHINA’S REGIONAL PLANSS

SINGAPORE: THE GATEWAY TO ASEAN

OPPORTUNITIES & CHALLENGES

CASE STUDIES

CLIENT TESTIMONIALS

HOW TRICOR CAN HELP

WHY ASEAN? History of ASEAN The Association of Southeast Asian Nations (ASEAN) was established in 1967 in Bangkok, Thailand, with the signing of the ASEAN Declaration (Bangkok Declaration) by the 'Founding Fathers' of ASEAN, specifically Indonesia, Malaysia, Philippines, Singapore and Thailand.

Brunei joined the pact in 1984 followed by Vietnam in 1995, Laos and Myanmar in 1997 and Cambodia in 1999 – making up what is today the ten member states of ASEAN.

The aims and purposes of ASEAN1

The Ten Member States of ASEAN1

Accelerate

economic growth, social progress and cultural development throughout the region.

1967

ASEAN-5 Indonesia, Malaysia, Philippines,

Promote

Singapore and

regional peace and stability.

Thailand

Avocate

for active collaboration and mutual assistance on matters of common interest.

50+ Years of ASEAN 1967

2

2020

3

1984

Brunei joined

1995

Vietnam joined

1997

Laos and Myanmar joined

1999

ASEAN-10 Cambodia joined

665.9 Population (in millions)

GDP per capita (in US$)

185

4,827.4 122

2,815.2 Trade (in US$, billions)

Life expectancy (in years)

8 Tricor Group

10

56

72

WHY ASEAN?

OVERVIEW OF ASEAN MARKETS

BUSINESS INCORPORATION

TAX CONSIDERATIONS

LABOR ENVIRONMENT

ASEAN: THE LEVER FOR CHINA’S REGIONAL PLANSS

SINGAPORE: THE GATEWAY TO ASEAN

OPPORTUNITIES & CHALLENGES

CASE STUDIES

CLIENT TESTIMONIALS

HOW TRICOR CAN HELP

ASEAN Member States Country

Languages

Currency

Ministry of Foreign Affairs

Malay, English

Brunei Dollar B$1.35 = US$1

www.mfa.gov.bn

Khmer

Riel 4,004.40 = US$1

www.mfaic. gov.kh

Indonesian

Rupiah Rp14,103.60 = US$1

www.kemlu.go.id

Lao

Kip ₭8,604.65 = US$1

www.mofa.gov.la

Malay, English, Chinese, Tamil

Ringgit RM4.09 = US$1

www.kln.gov.my

Burmese

Kyat K1,532.35 = US$1

www.mofa. gov.mm

Filipino, English, Spanish

Peso ₱52.24 = US$1

www.dfa.gov.ph

English, Malay, Mandarin, Tamil

Singapore Dollar S$1.36 = US$1

www.mfa.gov.sg

Thai

Baht ฿31.22 = US$1

www.mfa.go.th

Vietnamese

Dong ₫23,225.57 = US$1

www.mofa. gov.vn

Brunei

Cambodia

Indonesia

Laos

Malaysia

Myanmar

Philippines

Singapore

Thailand

Vietnam

ASEAN Business Guide 2022 9

WHY ASEAN?

OVERVIEW OF ASEAN MARKETS

BUSINESS INCORPORATION

TAX CONSIDERATIONS

LABOR ENVIRONMENT

ASEAN: THE LEVER FOR CHINA’S REGIONAL PLANSS

SINGAPORE: THE GATEWAY TO ASEAN

OPPORTUNITIES & CHALLENGES

CASE STUDIES

CLIENT TESTIMONIALS

HOW TRICOR CAN HELP

Economy and Gross Domestic Product ASEAN has been traveling on a remarkable growth journey over the past four decades. After weathering the 1997 Asian financial crisis, ASEAN's growth rate stood at 6% in 2000.

Even through the 2008 global economic crisis, the regional economy continued to grow steadily from

2000 through 2019, before the COVID-19 pandemic, at an average annual growth rate of 5.7%.3 With a combined gross domestic product (GDP) of almost US$3.2 trillion in 20194, ASEAN collectively is ranked as the third largest regional economy in Asia and the fifth largest economy in the world.

Sociodemographic Factors The ASEAN population has nearly doubled over the last four decades, shooting up from 355.2 million in 1980 to over 678 million as of January 2022. This means ASEAN is home to approximately 8.58% of the world population.5 The ASEAN Population

1980

355.2M

678M+

2022

8.5%

of the world population

Many countries in Asia are experiencing the favorable demographic phenomenon known as the ‘golden population’, the number of labor force outnumbers the number of dependents.6 Countries have the potential to transform their economies but must take appropriate actions to leverage their human capital by providing improved 10 Tricor Group

education and skills training, access to technology, as well as creating jobs and developing social security.

Changes in the population age structure in ASEAN member states indicate increasing proportions of youth and working-age population. The working-age population accounted for 59.6% of the region's total population in 2019, compared to 53.0% in 2000.3 While this demographic transition may present some challenges with regards to education and creating employment opportunities, an effective strategy could bring about significant contributions to economic growth and poverty reduction.

Adult literacy rate, net enrolment rate in primary and secondary education and the percentage of educational expenditure to GDP are key indicators important for monitoring the progress of educational development of a particular country. The majority of ASEAN has achieved literacy rates of 95% and above. Cambodia and Laos stand lower at 82.5% and 84.7% respectively3, but have made significant progress in the past two decades. The enrolment rate in primary education is over 97%, bar the Philippines and Cambodia at 94% and 93%, respectively. Singapore, Vietnam, Malaysia, Brunei and Thailand lead the way with enrolment rates in secondary education of 85% and above.3 Malaysia, Vietnam and the Philippines hold the top three rates for educational spending in proportion to GDP, at 4.16%, 4.06% and 3.23%, respectively.7

WHY ASEAN?

OVERVIEW OF ASEAN MARKETS

BUSINESS INCORPORATION

TAX CONSIDERATIONS

LABOR ENVIRONMENT

ASEAN: THE LEVER FOR CHINA’S REGIONAL PLANSS

SINGAPORE: THE GATEWAY TO ASEAN

OPPORTUNITIES & CHALLENGES

CASE STUDIES

CLIENT TESTIMONIALS

HOW TRICOR CAN HELP

ASEAN Mid-Year Population (National Estimation), 2011-20208 (in thousands) Country

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

Brunei

393.4

399.8

406.2

411.9

412.4

417.3

421.3

442.4

459.5

453.6

Cambodia

14,521.3

14,741.4

14,676.6

14,932.3

15,191.7

15,453.9

15,717.7

15,981.8

16,078.7

16,338.1

Indonesia

241,990.7

245,425.2

248,818.1

252,164.8

255,587.9

258,496.5

261,355.5

264,161.6

266,911.9

270,203.9

6,385.1

6,514.4

6,644.0

6,809.1

6,671.7

6,787.0

6,900.8

7,013.0

7,123.1

7,261.2

Malaysia

29,062.0

29,510.0

30,213.7

30,708.5

31,186.1

31,633.5

32,022.5

32,382.2

32,523.0

32,583.8

Myanmar

50,149.0

50,667.0

51,184.0

51,991.0

52,450.0

52,917.0

53,388.0

53,863.0

54,340.0

54,817.9

Philippines

94,823.8

96,510.9

98,196.5

99,880.3

101,562.3

103,242.9

104,921.4

105,755.2

107,288.2

108,772.0

Singapore

5,183.7

5,312.4

5,399.2

5,469.7

5,535.0

5,607.3

5,612.3

5,638.7

5,703.6

5,685.8

Thailand

66,214.0

66,491.7

66,754.6

67,002.6

67,236.0

67,454.7

67,653.2

67,831.6

67,989.8

68,127.8

Vietnam

88,145.8

89,202.9

90,191.4

91,203.8

92,228.6

93,250.7

94,286.0

95,385.2

96,484.0

97,582.7

ASEAN

596,868.7

604,775.8

612,484.3

620,574.0

628,061.7

635,260.8

642,278.6

648,454.6

654,901.7

661,826.8

Laos

ASEAN GDP at Current Prices (US$, millions)8

2011 2013 2016 2020

2,260,595.6 2,514,397.7 2,597,470.3 2,997,833.7

ASEAN GDP was 2.5% and 3.6% of World GDP in 2011

and 2020 respectively.9

ASEAN Business Guide 2022 11

WHY ASEAN?

OVERVIEW OF ASEAN MARKETS

BUSINESS INCORPORATION

TAX CONSIDERATIONS

LABOR ENVIRONMENT

ASEAN: THE LEVER FOR CHINA’S REGIONAL PLANSS

SINGAPORE: THE GATEWAY TO ASEAN

OPPORTUNITIES & CHALLENGES

CASE STUDIES

CLIENT TESTIMONIALS

HOW TRICOR CAN HELP

International Trade & Investment

Singapore in Focus: The Gateway to ASEAN

International trade in ASEAN is flourishing, with total merchandise trade increasing well over threefold from US$790 billion in 2000 to almost US$2.8 trillion in 2020.3

On page 68 of this report, we spotlight Singapore’s position as the ‘Gateway to ASEAN’, exploring the favorable attributes luring MNCs in, including trade openness, well-connected supply chains, a well developed manufacturing sector, innovation, tax incentives and top talent pools.

Intra-ASEAN trade collectively is the largest market, representing 23.5% of ASEAN total exports and 22.3% of ASEAN total imports.3 The largest markets for ASEAN exports, following intra-ASEAN activity, have been mainland China, the European Union, the United States and Japan. On the other hand, mainland China, Japan, the European Union, South Korea and the United States have been the largest markets for ASEAN imports.

Foreign Direct Investment (FDI) Flows to ASEAN10 Market

2019 FDI Flows (in US$, millions)

2020 FDI Flows (in US$, millions)

Percentage Change from 2019 to 2020

ASEAN

182,006.2

137,331.5

-25%

374.6

577.4

+54%

Cambodia

3,663.0

3,624.6

-1%

Indonesia

23,883.3

18,310.0

-23%

755.5

967.7

+28%

Malaysia

7,859.7

3,511.8

-55%

Myanmar

1,729.9

2,205.6

+25%

Philippines

8,671.4

6,585.6

-24%

Brunei

Laos

114,158.4

90,597.7

-21%

Thailand

Singapore

4,790.4

-4,848.9

-200%

Vietnam

16,120.0

15,800.0

-2%

12 Tricor Group

Impact of the COVID-19 Pandemic on FDI in ASEAN ASEAN, an engine of global FDI growth for the past decade, recorded a 25% contraction in foreign direct investment in 2020 (going down to US$136 billion), according to the United Nations Conference on Trade and Development’s World Investment Report.10 Singapore, Indonesia and Vietnam, ASEAN’s largest FDI recipients in that order, all recorded declines in FDI in 2020. Specifically, FDI to Singapore fell by 21% (down to US$91 billion), Indonesia by 22% (down to US$19 billion) and Vietnam by 2% (down to US$16 billion).

In Thailand, FDI dropped down to -US$6 billion, hampered by the by the acquisition of the Thai and Malaysian operations of British grocer Tesco by Charoen Pokphand (CP) Group, one of Thailand’s largest business conglomerates, for US$10.57 billion. In Malaysia, FDI sank by 55% to US$3 billion. FDI in Cambodia remained flat at US$3.6 billion, thanks to inflows in finance. In Myanmar, FDI plummeted by 34% to US$1.8 billion.

The major FDI contraction tracked in ASEAN – like most of the reduction seen across the globe during this unprecedented period – can be attributed to sequential

WHY ASEAN?

OVERVIEW OF ASEAN MARKETS

BUSINESS INCORPORATION

TAX CONSIDERATIONS

LABOR ENVIRONMENT

ASEAN: THE LEVER FOR CHINA’S REGIONAL PLANSS

SINGAPORE: THE GATEWAY TO ASEAN

OPPORTUNITIES & CHALLENGES

CASE STUDIES

CLIENT TESTIMONIALS

HOW TRICOR CAN HELP

International trade in ASEAN is flourishing, with total merchandise trade increasing well over threefold from US$790 billion in 2000 to almost US$2.8 trillion in 2020.

waves of infection, sustained lockdown and quarantine measures, travel restrictions, supply chain disruptions, plunging corporate earnings, ongoing economic uncertainties and delayed global investment plans.

ASEAN Foreign Direct Investment (FDI) Inward Flows by Host Country, 2011-20208 (in US$, millions) Host Country Brunei

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020i

1,208.3

864.8

725.5

568.2

171.3

-150.4

460.1

517.3

374.6

577.4

Cambodia

891.7

1,557.1

1,274.9

1,726.5

1,701.0

2,475.9

2,788.1

3,212.6

3,663.0

3,624.6

Indonesia

19,241.6

19,137.9

18,443.8

21,810.4

16,642.1

3,920.7

20,579.2

20,563.5

23,883.3

18,310.0

466.8

294.4

426.7

913.2

1,079.2

1,075.7

1,695.4

1,358.0

755.5

967.7

Laos Malaysia

12,000.9

9,400.0

12,107.1

10,875.3

10,180.0

11,290.3

9,295.8

7,611.3

7,859.7

3,511.8

Myanmar

2,058.2

1,354.2

2,620.9

946.2

2,824.5

2,989.5

4,002.4

1,609.8

1,729.9

2,205.6

Philippines

1,815.9

2,797.0

3,859.8

5,814.6

5,639.2

8,279.5

10,256.4

9,948.6

8,671.4

6,585.6

Singapore

39,886.6

60,101.9

56,670.9

73,284.5

59,702.3

70,223.5

84,685.1

75,954.1

114,158.4

90,597.7

Thailand

2,473.7

12,899.0

15,936.0

4,975.5

8,927.7

3,486.3

8,285.2

13,190.9

4,790.4

-4,848.9

Vietnam

7,519.0

8,368.0

8,900.0

9,200.1

11,800.0

12,600.0

14,100.0

15,500.0

16,120.0

15,800.0

ASEAN

87,562.8

116,774.3

120,965.5

130,114.5

118,667.2

116,190.9

156,147.7

149,466.0

182,006.2

137,331.5

Note: i. Data for 2020 are preliminary figures

ASEAN Foreign Direct Investment (FDI) Inward Flows by Source Country, 2011-20208 (in US$, millions) Source Country

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020i

ASEAN

15,836.7

23,900.8

18,464.2

22,180.9

20,819.3

26,408.9

27,083.5

22,830.4

22,046.5

22,815.8

Rest of the World

71,726.1

92,873.5

102,501.3

107,933.6

97,847.9

89,782.0

129,064.2

126,635.6

159,959.7

114,515.7

Australia

4,847.3

741.1

2,165.5

4,032.1

1,407.2

1,081.7

-807.8

700.7

1,085.0

535.4

922.7

3,870.8

790.0

2,239.7

1,179.7

1,603.2

1,477.3

318.6

10,124.3

5,100.7

Mainland China

7,194.3

7,975.2

6,165.2

6,811.7

6,571.8

10,502.7

17,511.0

12,751.7

8,827.7

7,732.6

European Unioniii

24,419.3

-2,536.7

15,718.5

28,943.3

20,373.1

31,810.7

15,364.5

27,856.4

17,711.4

10,015.8

India

-2,106.2

7,040.7

1,731.2

1,163.5

1,473.4

850.9

1,510.3

555.6

1,529.1

2,123.7

Japan

7,797.6

14,852.8

24,608.6

13,436.1

12,962.3

15,047.6

15,625.4

26,724.6

23,837.9

8,520.2

South Korea

1,774.3

1,278.5

4,302.7

5,257.2

5,608.8

6,586.4

5,649.3

5,169.4

7,527.3

6,849.5

New Zealand

24.6

-945.8

270.0

496.3

-58.3

347.2

162.6

-155.1

163.8

72.5

Russia

10.1

189.1

608.0

-113.5

-24.4

63.4

47.8

56.1

83.5

63.2

8,197.4

18,911.4

11,457.9

21,141.3

22,912.5

13,626.3

30,868.3

-25,398.5

34,580.7

35,039.2

ii

Canada

United States Othersiv TOTAL

18,644.7

41,496.4

34,683.8

24,526.0

25,441.9

8,261.9

41,655.6

78,056.1

54,489.1

38,463.0

87,562.8

116,774.3

120,965.5

130,114.5

118,667.2

116,190.9

156,147.7

149,466.0

182,006.2

137,331.5

Note: i. Data for 2020 are preliminary figures ii. Excludes reinvestment of earnings in the Philippines and intra-ASEAN breakdown for Laos (2012 and 2013) are estimated by the ASEAN Secretariat iii. Data for 2011-2019 covers EU28 while for 2020 covers EU27 iv. Includes unspecified country source for reinvestment of earnings in Philippines and estimated extra-ASEAN for Laos (2012 and 2013)

ASEAN Business Guide 2022 13

WHY ASEAN?

OVERVIEW OF ASEAN MARKETS

BUSINESS INCORPORATION

TAX CONSIDERATIONS

LABOR ENVIRONMENT

ASEAN: THE LEVER FOR CHINA’S REGIONAL PLANSS

SINGAPORE: THE GATEWAY TO ASEAN

OPPORTUNITIES & CHALLENGES

CASE STUDIES

CLIENT TESTIMONIALS

ASEAN Top 10 Foreign Direct Investment (FDI) Flows by Source Country, 20208

ASEAN Top 5 Foreign Direct Investment (FDI) Inward Flows by Industry, 20128

ASEAN Top 5 Foreign Direct Investment (FDI) Inward Flows by Industry, 20208

ASEAN Foreign Direct Investment (FDI)8 2012

2020

Financial and insurance activities

34.1%

36.6%

Wholesale and retail trade; repair of motor vehicles and motor cycles

32.8%

19.6%

-

14.5%

Professional, scientific and technical activities

4.7%

8.2%

Real estate activities

9.5%

6.1%

Mining and quarrying

5.5%

-

13.4%

15%

Manufacturing

Others

14 Tricor Group

HOW TRICOR CAN HELP

WHY ASEAN?

OVERVIEW OF ASEAN MARKETS

BUSINESS INCORPORATION

TAX CONSIDERATIONS

LABOR ENVIRONMENT

ASEAN: THE LEVER FOR CHINA’S REGIONAL PLANSS

SINGAPORE: THE GATEWAY TO ASEAN

OPPORTUNITIES & CHALLENGES

CASE STUDIES

CLIENT TESTIMONIALS

HOW TRICOR CAN HELP

RCEP: Opening New Horizons for ASEAN On November 15, 2020, in the midst of the global COVID-19 pandemic that has widely disrupted global trade flows, leaders from 15 APAC countries gathered for a virtual ceremony to sign a commitment to the

Regional Comprehensive Economic Partnership (RCEP), essentially connecting about 30% of the world’s population as part of the largest trading bloc globally.

Asia Pacific Trade Groupings11 RCEP

CPTPP Australia

China

South Korea

Japan

New Zealand

Canada

Chile

Peru

Mexico

Cambodia

Indonesia

Laos

Brunei

Malaysia

Myanmar

Philippines

Thailand

Singapore

Vietnam

ASEAN

Key Benefits of RCEP Tariff Reductions: The agreement is expected to reduce tariffs on between 90% and 93% of tariff lines but will maintain carve-outs for agricultural products.

Creation of Common Rules of Origin: The creation of a common rule of origin will allow companies to ship products between RCEP countries with a single certificate of origin, lowering costs and incentivizing regional supply chains.

Digital Copyright Rules & Intellectual Property: The digital copyright rules in the final draft are stronger than expected, going beyond what is included in the Comprehensive and Progressive Agreement for TransPacific Partnership (CPTPP).

(Limited) Services, Investment & Standards Provisions: Though the provisions are relatively weak, they are there, and may be expanded in the future.

When RCEP negotiations were initially launched in 2012, negotiations for a separate Trans Pacific Partnership (TPP) agreement were in discussion. At the time, this deal included RCEP participants Australia, Brunei, Japan, Malaysia, New Zealand, Singapore and Vietnam, as well as the United States. But mainalnd China and India were not included.

The original rendering of TPP was part of a larger American strategy under President Barack Obama for an 'Asian pivot', which was to be a combination of

ramping up multilateral trade with Asian countries (other than mainland China) and increased military presence in the region. However, support for TPP in the United States was lukewarm at best and, in early 2018, President Donald Trump announced that the United States would pull out of the agreement in favor of bilateral trade agreements. Effectively, the RCEP became the centerpiece multilateral trade agreement in Asia.

However, TPP negotiations did continue and, in the end, it evolved to become the CPTPP, an agreement led by Japan that includes 11 countries. It should be noted that many of the areas covered by RCEP are also encompassed by CPTPP. In addition, many countries engaged in both agreements maintain separate bilateral free trade treaties with each other.

The three key areas where RCEP and CPTPP differ are in the elimination of tariffs, labor and environmental standards. When compared to the RCEP, the CPTPP, which also engages Canada, Mexico and Chile, mandates a greater elimination of tariffs (calling for up to 99%) and higher-level standards in labor and sustainability.

It also attempts to place restrictions on state-owned enterprises. This differentiator exists because, during the negotiations, the smaller, less economically developed economies (primarily ASEAN states) were unable or unwilling to commit to the higher CPTPPlevel standards.

ASEAN Business Guide 2022 15

WHY ASEAN?

OVERVIEW OF ASEAN MARKETS

BUSINESS INCORPORATION

TAX CONSIDERATIONS

LABOR ENVIRONMENT

ASEAN: THE LEVER FOR CHINA’S REGIONAL PLANSS

SINGAPORE: THE GATEWAY TO ASEAN

OPPORTUNITIES & CHALLENGES

CASE STUDIES

CLIENT TESTIMONIALS

HOW TRICOR CAN HELP

RCEP: Deepening ASEAN’s Supply Chain Footprint For ASEAN, RCEP could serve as a counterweight to the emerging trade protectionism that has accelerated globally amid COVID-19. At Tricor, our experts in global trade expect RCEP to steer both global and domestic businesses within ASEAN to re-shore or near-shore their supply chains.

Not only does RCEP assert trade openness with ASEAN’s border, it can also deepen the region’s connectivity with mainland China, South Korea and Japan. In particular, these three countries are global heavyweights for the electronics, cars, textiles and garments industries – upon which ASEAN is reliant. Placing each of these markets within a trade pact means ASEAN can assert its supply chain relevance across these sectors in ways it never has before.

RCEP will reignite ASEAN’s attractiveness for FDI, which has been a key driver of the region’s manufacturing, infrastructure and export growth over the past 20

years. With FDI tapering off in recent years, RCEP could be the panacea to renewed investment interest from companies and investors in mainland China, Japan and South Korea.

RCEP is also projected to drive critical domestic regulatory reforms in key areas such as labor laws, investment liberalization, cybersecurity, cross-border data rules and intellectual property protection.

Such reforms effectively foster material commercial incentives for trade and investment from member partners, a trend which will only accelerate as global supply chain dynamics continue to shift.

The trade deal also aims to streamline the various overlapping preferential trading arrangements that most RCEP members already have with each other. By establishing common trade rules, the RCEP will help reduce trade costs for businesses operating within ASEAN.

RCEP: A Windfall for SMEs in ASEAN Of note, the RCEP maintains special provisions for small and medium-sized enterprises. Despite a common perception that the deal will only impact the large players in major industries, a closer look at the agreement by Tricor shows RCEP could also be a boon for small and medium enterprises (SMEs), which comprise more than 90% of business entities across the 15 participating economies.12 The greatest advantage, by far, for SMEs lies in the promise for greater market access. Accounting for

nearly 30% of the world population and 30% of global income and global trade13, the RCEP zone represents an ideal opportunity for fast-growth SMEs to spread their wings and capitalize on immense Pan-Asia market growth.

The RCEP has the potential to change the game for SMEs, opening access to trade financing to enable SMEs to easily export their products throughout the zone as well as fund the development of better, more competitive products.

RCEP: Bolstering ASEAN's Labor Market For the population of ASEAN, RCEP could also have a cumulative, snowball effect on the region’s labor market. The Asian Development Bank (ADB) estimates a 10% increase in trade finance globally, triggered by the RCEP, could add 2.8 million jobs to regional employment by 2030.14 With SMEs accounting for between 88.8% and 99.9% of total establishments

in ASEAN and between 51.7% and 97.2% of total employment15, the effects RCEP has on financing could be colossal. As SMEs grow and expand their businesses in ASEAN, thanks to incentives from the RCEP, they will inevitably create more job opportunities. This upward trend in job creation will drive unemployment rates down and strengthen the region’s consumer class.

Infrastructure The ASEAN countries with the highest total road coverage, according to a 2021 report compiled by member states, were Thailand (702,210.2 km), Vietnam 16 Tricor Group

(594,898.0 km), Indonesia (564,010.0 km) and Malaysia (256,493.6 km).8

WHY ASEAN?

OVERVIEW OF ASEAN MARKETS

BUSINESS INCORPORATION

TAX CONSIDERATIONS

LABOR ENVIRONMENT

ASEAN: THE LEVER FOR CHINA’S REGIONAL PLANSS

SINGAPORE: THE GATEWAY TO ASEAN

OPPORTUNITIES & CHALLENGES

CASE STUDIES

CLIENT TESTIMONIALS

HOW TRICOR CAN HELP

ASEAN Road Infrastructure, 2011-20208 Road Infrastructure

Total Length (km)

Length of Paved Network (km)

Year

Brunei

Cambodia

Indonesia

Laos

Malaysia

Myanmar

Philippines

Singapore

Thailand

Vietnam

2011

2,868.7

44,919.0

496,607.0

41,032.0

157,167.2

150,816.0

31,359.0

3,410.0

231,215.6

300,848.0

2012

2,908.8

51,422.0

504,184.0

43,601.0

182,699.3

151,298.0

31,597.7

3,430.0

231,789.6

326,000.0

2013

2,935.8

51,404.0

508,000.0

45,825.0

204,170.1

164,969.0

32,227.0

3,453.0

232,195.6

334,845.0

2014

2,976.1

55,026.0

517,753.0

51,596.0

203,791.0

165,723.2

32,526.0

3,496.0

233,174.6

357,222.0

2015

2,998.5

58,000.0

523,974.0

56,330.0

216,837.1

147,821.6

32,633.4

3,500.0

454,025.2

360,216.0

2016

3,049.0

58,946.0

537,837.0

58,885.0

238,789.9

164,028.1

32,770.3

3,512.0

455,652.9

368,779.0

2017

3,053.0

61,508.4

540,490.0

59,870.0

237,022.4

164,376.8

32,868.1

3,500.0

456,486.8

370,664.0

2018

3,059.0

62,442.0

540,658.0

60,340.0

250,023.4

162,766.2

32,932.7

3,515.0

701,847.1

387,653.5

2019

3,714.0

63,432.4

564,010.0

58,255.0

256,493.6

138,272.4

33,018.3

3,520.0

702,210.2

594,898.0

2020

-

64,883.0

-

58,286.8

267,012.0

237,288.4

33,119.6

3,525.0

702,576.5

-

2011

2,467.1

3,881.0

283,102.0

5,703.0

127,517.0

33,014.0

24,834.4

3,412.0

160,485.1

197,682.0

2012

2,707.4

5,474.0

283,102.0

6,496.3

143,012.3

32,535.0

25,443.4

3,426.0

160,771.2

216,000.0

2013

2,742.6

5,619.0

285,252.0

6,888.0

158,005.2

39,076.0

26,773.0

3,453.0

162,230.1

218,000.0

2014

2,783.1

7,576.0

295,968.0

8,272.0

154,696.7

38,423.1

27,816.0

3,496.0

163,170.4

222,000.0

2015

2,804.7

6,549.5

317,119.0

8,830.3

164,035.6

37,119.3

28,919.2

3,500.0

276,988.9

229,790.6

2016

2,857.0

8,800.0

326,629.0

9,044.0

180,193.9

37,662.5

30,010.0

3,512.0

281,350.3

254,340.4

2017

2,860.0

10,685.3

321,093.0

9,251.0

179,517.6

39,496.5

31,035.3

3,500.0

281,969.9

262,857.3

2018

2,863.0

11,096.4

329,926.0

11,728.1

189,800.1

53,418.3

31,622.8

3,515.0

407,838.1

281,652.4

2019

3,223.2

12,008.7

325,606.0

12,617.2

192,373.7

40,626.9

32,087.1

3,520.0

408,188.4

475,918.0

2020

-

12,453.0

-

13,029.0

198,404.3

-

32,527.0

3,525.0

408,594.8

-

Note: '-' not available at the time of publication

ASEAN Business Guide 2022 17

WHY ASEAN?

OVERVIEW OF ASEAN MARKETS

BUSINESS INCORPORATION

TAX CONSIDERATIONS

LABOR ENVIRONMENT

ASEAN: THE LEVER FOR CHINA’S REGIONAL PLANSS

It is important to note that total road length is not only indicative of the economic development of a country, but also of its cumulative land area.

Brunei, Malaysia and Thailand recorded the highest ratios of total vehicles per 1,000 population in 2020, at 997.8, 993.7 and 607 respectively.

Also important from an infrastructure perspective is international air passengers, as these can indicate the attractiveness of a country as an international tourism

SINGAPORE: THE GATEWAY TO ASEAN

OPPORTUNITIES & CHALLENGES

CASE STUDIES

CLIENT TESTIMONIALS

HOW TRICOR CAN HELP

destination and or a place to do business. Notably, the total number of international air passengers travelling through all 10 ASEAN member states more than tripled, from 92.4 million in 2004 to 288.8 million in 2017, according to a 2018 report compiled by ASEAN member states.16 In 2019, the year before the COVID-19 pandemic stunted international travel, Thailand held top spot with international passenger traffic of over 81 million, followed by Singapore (67.6 million) and Malaysia (53.8 million).

ASEAN Road Fleet, 2011-20208 Road Fleet

Total Vehicles (per 1,000 population)

Year

Brunei

Cambodia

Indonesia

Laos

Malaysia

Myanmar

Philippines

Singapore

Thailand

Vietnam

2011

376.7

17.3

353.7

170.7

736.4

46.9

75.3

184.6

456.0

16.6

2012

595.3

18.4

384.5

197.8

769.3

71.3

77.3

182.6

488.4

17.8

2013

642.5

19.2

417.6

216.6

788.4

78.5

78.3

180.4

518.7

18.5

2014

713.8

23.1

449.5

231.6

817.4

94.4

80.9

177.7

534.8

20.1

2015

948.1

26.2

472.6

257.4

843.4

102.7

85.7

172.9

546.3

22.8

2016

935.6

34.0

495.4

272.6

872.9

115.8

89.6

170.6

553.5

27.0

2017

970.8

28.1

499.6

286.6

897.4

127.4

99.2

171.4

566.3

30.8

2018

962.9

36.3

533.0

300.2

925.1

134.6

108.8

169.7

583.1

34.3

2019

956.5

39.7

473.6

313.6

958.1

135.6

117.5

170.6

598.8

44.6

2020

997.8

27.9

485.1

337.1

993.7

138.8

109.0

171.3

608.7

-

Note: '-' not available at the time of publication

18 Tricor Group

WHY ASEAN?

OVERVIEW OF ASEAN MARKETS

BUSINESS INCORPORATION

TAX CONSIDERATIONS

LABOR ENVIRONMENT

ASEAN: THE LEVER FOR CHINA’S REGIONAL PLANSS

SINGAPORE: THE GATEWAY TO ASEAN

OPPORTUNITIES & CHALLENGES

CASE STUDIES

CLIENT TESTIMONIALS

HOW TRICOR CAN HELP

ASEAN International Civil Aviation, 2011-202024 Civil Aviation

Number of International Airports

International Passenger Traffic ('000s)

Year

Brunei

Cambodia

Indonesia

Laos

Malaysia

Myanmar

Philippines

Singapore

Thailand

2011

1

3

29

4

6

2

9

2

7

Vietnam 6

2012

1

3

29

4

6

2

10

2

7

9

2013

1

3

29

4

6

3

11

2

7

9

2014

1

3

29

4

6

3

11

2

7

9

2015

1

3

29

4

6

3

11

2

7

8

2016

1

3

29

4

6

3

11

2

7

8

2017

1

3

29

4

6

3

11

2

7

8

2018

1

3

30

4

6

3

11

2

7

9

2019

1

3

34

4

6

3

11

2

7

9

2020

1

3

34

4

6

3

8

2

7

9

2011

2,017.0

3,481.0

8,152.0

372.1

30,462.0

1,455.6

15,716.5

45,429.0

41,769.7

11,897.1

2012

1,681.0

3,997.0

9,938.3

642.0

32,396.9

2,034.7

17,432.7

49,910.0

46,920.5

13,208.0

2013

1,715.0

4,606.0

10,964.0

728.7

38,032.4

2,651.8

18,582.3

52,775.0

54,448.9

14,867.6

2014

1,647.0

5,169.0

10,252.0

921.2

39,984.2

3,187.2

19,402.8

53,288.0

49,531.4

15,332.0

2015

1,717.0

5,606.0

23,103.0

1,073.0

40,017.0

3,428.1

21,279.7

54,835.6

60,593.7

17,696.1

2016

1,726.0

6,201.0

25,212.0

944.0

43,490.7

4,027.0

23,796.9

58,158.0

67,247.4

20,682.0

2017

1,726.0

7,666.0

31,953.0

1,620.0

49,783.3

4,377.7

26,812.5

61,574.0

75,207.9

25,330.2

2018

1,774.0

9,376.0

36,326.0

2,306.0

52,246.8

4,465.8

28,914.7

64,889.0

83,157.9

34,534.1

2019

2,186.0

10,326.0

37,278.0

2,312.7

53,840.7

5,538.7

29,363.0

67,601.0

81,427.6

41,747.0

2020

423.0

1,913.0

7,235.0

460.7

9,546.5

1,150.7

6,312.8

11,634.0

16,254.8

-

The number of internet subscribers has shown massive growth in ASEAN, from only 22.3 subscribers per 100 population in 2000 to 62.9 in 2020.

Mobile density has increased from 96.7 devices per 100 people in 2011 to 140 in 2020.

Access to Cellular/ Mobile Phones in ASEAN, 2011-202024 ICT Service

Cellular/ Mobile Phone Density (per 100 persons)

Year

Brunei

Cambodia

Indonesia

Laos

Malaysia

Myanmar

Philippines

Singapore

Thailand

Vietnam

ASEANi

2011

112.7

108.0

102.5

87.2

127.0

2.4

98.1

149.6

114.6

144.9

96.7

2012

117.5

129.6

114.9

66.0

140.0

7.4

104.5

151.9

125.2

148.3

111.7

2013

115.4

135.4

125.9

69.1

143.6

13.3

103.5

156.3

137.5

137.9

116.7

2014

113.1

132.7

126.5

67.8

148.5

51.6

110.0

146.9

141.4

150.1

123.4

2015

108.1

133.0

132.6

53.1

143.9

75.7

115.8

146.5

152.7

128.8

126.6

2016

120.7

124.9

149.1

55.4

141.2

89.3

109.2

146.9

172.6

128.0

135.1

2017

128.3

116.0

164.4

53.4

136.1

89.8

110.1

146.8

175.6

126.9

147.3

2018

131.9

119.5

119.3

51.9

134.5

113.8

126.2

148.8

180.2

147.2

128.3

2019

132.7

129.9

126.1

60.8

139.6

137.7

154.8

155.6

186.2

141.2

139.1

2020

120.4

-

130.1

-

135.1

-

-

144.1

166.6

142.7

140.0

Note: i. ASEAN figure for 2020 is estimated as the data for some ASEAN member states (AMS) are not available '-' not available at the time of publication

ASEAN Business Guide 2022 19

WHY ASEAN?

OVERVIEW OF ASEAN MARKETS

BUSINESS INCORPORATION

TAX CONSIDERATIONS

LABOR ENVIRONMENT

ASEAN: THE LEVER FOR CHINA’S REGIONAL PLANSS

SINGAPORE: THE GATEWAY TO ASEAN

OPPORTUNITIES & CHALLENGES

CASE STUDIES

CLIENT TESTIMONIALS

HOW TRICOR CAN HELP

Access to Internet Services in ASEAN, 2011-20208 ICT Service

Internet Subscribers / Users (per 100 persons)

Year

Brunei

Cambodia

Indonesia

Laos

Malaysia

Myanmar

Philippines

Singapore

Thailand

Vietnam

ASEANi

2011

53.0

3.1

12.3

9.0

61.0

1.0

29.0

71.0

23.7

41.9

22.3

2012

56.0

4.9

14.5

10.7

65.8

4.0

36.2

72.0

26.5

39.5

24.6

2013

64.5

6.8

14.9

12.5

67.0

8.0

37.0

81.0

28.9

43.9

26.1

2014

68.8

9.0

17.1

14.3

67.5

11.5

39.7

82.0

34.9

48.3

28.9

2015

71.2

19.0

22.0

18.2

71.1

21.7

53.7

79.0

39.3

43.5

35.0

2016

75.0

25.6

25.4

21.9

78.8

25.1

55.5

81.0

47.5

46.5

38.8

2017

90.0

32.4

32.3

25.5

80.1

30.7

60.1

84.4

52.9

58.1

48.5

2018

94.6

65.0

39.8

25.5

81.2

33.1

67.9

88.2

56.8

69.8

53.4

2019

95.0

78.3

47.7

25.5

84.2

33.1

63.7

88.9

66.7

68.7

57.0

2020

-

78.8

53.7

-

89.6

-

-

92.0

77.8

70.3

62.9

Note: i. ASEAN figure for 2020 is estimated as the data for some ASEAN member states (AMS) are not available '-' not available at the time of publication

Conclusion Despite a global slowdown triggered by the COVID-19 pandemic, ASEAN continues to be an attractive region for foreign businesses and investors, particularly because of its strong economic growth and burgeoning middle class and consumer markets.

Official FDI figures had not been released at the time of this report’s publication but, according to the International Monetary Fund (IMF)'s World Economic Outlook report, the global economy’s GDP growth overall is estimated to moderate from 5.9% in 2021 to 4.4% in 2022.17 According to this same report, global GDP is also anticipated to grow 3.8% in 2023 over 2022. Comparatively, the IMF looked at ASEAN and estimated that after GDP dropped 3.4% in 2020 when compared to 2019, ASEAN’s GDP is estimated to have grown 3.1% in 2021 compared to 2020. Moreover, the IMF projects that ASEAN’s economy will grow 5.6% in 2022 and 6.0% in 2023, outpacing the projected growth of global GDP.

“

The passage of the RCEP trade bloc is a defining moment for global trade and a pivotal development that will inevitably redirect FDI flows in the months and years ahead. Notably, the maturing economies of ASEAN serve as a linchpin for activating the deal. At Tricor, we are keeping a strong pulse on how this landmark agreement is triggering new global trade trends, bolstering pan-Asian supply chains and expanding opportunities for foreign investors. Tricor’s specialized local expertise and dynamic connections reinforce our status as the ‘go-to’ partner for enterprises seeking to expand throughout ASEAN, APAC and beyond.

Lennard Yong Group CEO Tricor Group

Population18 Percentage Change

Percentage of World Population (Jan, 2022)

7.9 billion

+1.2%

100%

4.6 billion

4.7 billion

+2.2%

59%

668.6 million

679 million

+1.6%

8.6%

Market

Population (Jan, 2021)

Population (Jan, 2022)

Global

7.8 billion

Asia ASEAN RCEP

2.2 billion

2.4 billion

+0.9%

30.4%

EU

445.3 million

445.7 million

+0.08%

5.6%

US, Canada, Mexico (combined)

497.7 million

503.4 million

+1.2%

6.3%

20 Tricor Group

WHY ASEAN?

OVERVIEW OF ASEAN MARKETS

BUSINESS INCORPORATION

TAX CONSIDERATIONS

LABOR ENVIRONMENT

ASEAN: THE LEVER FOR CHINA’S REGIONAL PLANSS

SINGAPORE: THE GATEWAY TO ASEAN

OPPORTUNITIES & CHALLENGES

CASE STUDIES

CLIENT TESTIMONIALS

HOW TRICOR CAN HELP

GDP19 Market

GDP 2020

GDP 2021 (estimated)

Percent Change

Percent of World GDP

Global

US$85 trillion

US$94.9 trillion

+7.9%

100% 33.7%

Asia

US$28.9 trillion

US$31.9 trillion

+10.4%

ASEAN

US$3.1 trillion

US$3.4 trillion

+9.6%

3.6%

RCEP

US$26 trillion

US$29 trillion

+11.5%

30.5%

EU

US$15.2 trillion

US$17.1 trillion

+12.5%

17.9%

US, Canada, Mexico (combined)

US$23.7 trillion

US$25.8 trillion

+8.8%

27.2%

Top Reasons ASEAN Markets Will Be More Important for Worldwide Operations and Revenue Over the Next Two Years (2018 to 2020)20

Southeast Asia is home to several emerging market countries, making the ASEAN region one of the most dynamic in the world. Many foreign businesses are expected to benefit from the region’s potential.

ASEAN's integration into the global economy has continued with the signing of the ASEAN-Hong Kong,

China Free Trade Agreement (AHKFTA) and ASEANHong Kong, China Investment Agreement (AHKIA). The ASEAN Plus Three forum, first held in 1996, paves the way for further integration by coordinating cooperation between ASEAN and China, Japan and South Korea.

Various other meetings are facilitating cooperation with even more regional and global partners.

ASEAN Business Guide 2022 21

02

OVERVIEW OF ASEAN MARKETS

WHY ASEAN?

OVERVIEW OF ASEAN MARKETS

BUSINESS INCORPORATION

TAX CONSIDERATIONS

LABOR ENVIRONMENT

ASEAN: THE LEVER FOR CHINA’S REGIONAL PLANSS

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OVERVIEW OF ASEAN MARKETS The ASEAN markets each present their own unique challenges and opportunities. If your business expansion strategy includes one or more of these markets, it is critical to understand some background information on the economic climate, tax codes, labor landscape and culture.

Brunei: Small & Wealthy, Gradually Offering More Opportunities for Foreign Investors Brunei, located on the northern coast of Borneo in Southeast Asia, is a small, wealthy economy that boasts a well-educated, largely English-speaking population, advanced infrastructure and a stable government intent on attracting foreign investment. Investing in the economy and doing business in Brunei have been challenging for foreigners in the past, but recent policies are making the economy more welcoming to foreign direct investment.

Reasons to do business in Brunei include:

English-speaking, welleducated population

Located in the heart of Southeast Asia with strong regional connections

The economy of Brunei is a mixture of foreign and domestic entrepreneurship, government regulation and welfare measures. Per capita GDP is among the highest in the world and substantial income from overseas investment supplements income from domestic hydrocarbon production.

Bruneian citizens pay no personal income taxes and the government provides free medical services and free education through the university level. This translates to high levels of disposable income and a very engaged workforce.

Crude oil and natural gas production account for approximately 65% of GDP and 95% of exports, with Japan being the primary export market.21 The Bruneian government is taking measures to diversify its economy away from hydrocarbon exports to other industries such as information, communications, technology and halal manufacturing, permissible under Islamic law.

Brunei’s trade increased in 2016, 2017 and 2018, following its regional economic integration in the ASEAN Economic Community.22 The energy price shock early in 2020 affected resourcebased processing industries globally, halving the number of investment announcements in petroleum coke and refined petroleum and reducing the value of announced projects by a third, to US$30 billion.10 24 Tricor Group

Solid infrastructure & political stability

No sales, payroll, capital gains, manufacturing and personal income taxes

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Brunei’s footprint in global trade has been increasing in recent years, especially following new trade policies and favorable taxation schemes.

Furthermore, Brunei’s adoption of the RCEP signals the country’s strong commitment to nurturing ASEAN’s postpandemic recovery efforts, strengthening trade linkages and expanding horizons for global businesses. With opportunities for foreign direct investment continuing to grow, Tricor Brunei is excited to help clients tap into flourishing market opportunities.

Cecilia Wong COO & Director Tricor Brunei

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Nevertheless, several large projects were announced in this sector, among them one by Hengyi Group (mainland China) for a more than US$13 billion investment to build a refinery and petrochemical complex in Brunei.

Brunei has also established a 174-hectare BioInnovation Corridor to support the development of

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halal pharmaceuticals and health supplements, which is expected to bolster FDI in upcoming years. Inward FDI more than doubled from 2019 to 2020, skyrocketing from US$275 million to US$577 million.23

Cambodia: One of the Fastest Growing Economies in Asia Cambodia has one of the most open economies in Asia and with the promulgation of new investment laws, it now offers competitive investment incentives.

Of the 10,565 registered businesses operating in Cambodia in 2014, 5,128 were foreign owned.24 Foreign firms are mostly operated by Chinese, South Koreans, Japanese and Vietnamese carrying out business in the garment, footwear, agriculture, agro-industry, tourism, construction and real estate sectors.

“Recently, many companies are seeking a next destination for investment. Especially companies in countries such as China, Thailand and Vietnam – which are facing a drastic increase in costs, including labor costs – are very keen to shift their production bases to new emerging countries, including Cambodia,” says Hiroshi Suzuki, Chief Economist at the Business Research Institute for Cambodia.25

Reasons to do business in Cambodia include:

Very open economy compared to other Least-Developed Countries (LDCs)

Low corporate / income tax

Low-cost, trainable, and motivated workforce

No discrimination between foreign and local investors

Despite catastrophic plummets in FDI around the globe in 2020 amid the fallout of the COVID-19 pandemic, FDI in Cambodia in 2020 remained flat at US$3.6 billion. The maintenance of FDI can be attributed to substantial inflows in finance, which rose by 13% up to US$1.4 billion. This compensated for a 7% drop in manufacturing, primarily in the garment industry (the traditional largest manufacturing recipient) and declines in investment in other key industries such as hospitality and real estate. Notably, Cambodia marked itself among the top five least developed countries (LDCs) for FDI inflows in 2020, coming in as the largest LDC in Asia Pacific.26 Notably, Cambodia hosted the world’s fourth largest greenfield project (and largest in Asia) in 2020 for Malaysia-based Lipp Engineering (furniture), which was valued at US$750 million. Moreover, it hosted the seventh largest greenfield project for France-based Total (energy) valued at US$340 million and the ninth largest for Japan-based Aeon (construction) valued at US$290 million.10

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Indonesia: Low Costs, High Potential The last two years have brought a significant boom to the Indonesian economy, placing it among the top investment climates in Southeast Asia.

machinery and equipment industry), and electricity, gas and water supply industry.27

A large domestic market of growing middle-class consumers, highly competitive labor costs and an established export-oriented manufacturing sector make Indonesia an attractive choice for investors looking to expand their operations in ASEAN.

In Indonesia, FDI declined by 22% in 2020 down to US$19 billion, namely hampered by a 58% drop in investment in the manufacturing industry. Notably, two major sources of FDI to Indonesia fell: investment from Japan shrunk by 75% to US$2.1 billion while investment from Singapore fell by nearly 30% down to US$4.6 billion.

Despite some recent economic and political setbacks, Indonesia has maintained relative stability and the government is working toward maintaining an attractive business environment. Indonesia’s leaders have also taken several recent steps to expedite FDI reforms and cut red tape for prospective foreign investors. The industries attracting the most FDIs are metal (except

However, Indonesia still gained favor from some of its ASEAN neighbors. For example, in 2020, Thai-based Bangkok Bank acquired Bank Permata in Indonesia for US$2.3 billion.28 Major global announcements of battery investments included a US$5.1 billion investment by Contemporary Amperex Technology (mainland China) in Indonesia.29

Reasons to do business in Indonesia include:

Lower labor and overhead costs

Recent years have brought a significant boom to Indonesia’s economy, placing it among the top investment climates in ASEAN and APAC. A large domestic market of growing middle-class consumers, highly competitive labor costs and an established export-oriented manufacturing sector make Indonesia an attractive choice for global investors looking to expand their operations in ASEAN. At Tricor Indonesia, we offer customized solutions to help businesses succeed in Indonesia’s vibrant, ever-changing business landscape.

Thriving middle class that is posting record consumption numbers year-over-year

Francisca Gunawan Co-Managing Director Accounting & Corporate Secretary Services Tricor Indonesia

Incentives, programs, policies and labor costs are favorable for businesses

Ease of doing business improving, with more reforms for foreign investors expected

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Laos: Motivated Workforce & Favorable Tax Environment Laos is the only landlocked country in the whole of Southeast Asia. It is heading into a new phase of regional and global integration, averaging 8% a year in GDP growth. The country's renewed economic development can be attributed to its strategic position between China, Vietnam, Cambodia, Thailand and Myanmar. Laos is also in the process of kick-starting new hydroelectricity projects, which its economy relies heavily on. It also hosts ample natural resources, including arable land and minerals.

To help local businesses and stimulate foreign investment, the government has set an attractive tax system, placing it among the lowest rates in the region.30 Laos stood out as a winner in FDI in 2020, when most countries in the world experienced sharp contractions in FDI. Inward investments rose 74% to reach US$968 million, driven largely by investments in hydropower. This included investment from Koreabased Doosan Heavy Industries to build a hydroelectric power plant in Phou Ngoy.31 International project finance deals in the country nearly quadrupled in 2020 to US$3.3 billion, scheduled to be invested over several years.

Most importantly, Laos’ success can be attributed to booming infrastructure investments from companies in

Reasons to do business in Laos include:

Socio-economic, financial and political stability

Lower labor and overhead costs

Newly established Special Economic Zones offer opportunities for foreign enterprises

Liberal laws and regulations creating favorable business environments

other Asian countries, especially mainland China. For example, a consortium led by Datang International Power began the construction of the US$2.1 billion Sanakham Dam in 202032 and the China Railway Group is building the US$5.7 billion Laos–China Railway project.33

Labuan: Becoming a Market of Choice Labuan - often referred to as the pearl of Borneo - is quickly becoming a market of choice for high net-worth individuals and businesses wanting to invest or expand globally. A federal territory of Malaysia, Labuan has passed several laws in recent years with the clear aim of

making it an attractive global financial and investment destination. It is particularly appealing for those seeking highly efficient tax planning and wealth management solutions.

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Situated centrally in the APAC region, Labuan has the added benefit of being part of Malaysia so its businesses enjoy the trade agreements Malaysia has formed with other markets. With its strong economy, multilingual workforce, low operating costs and convenient time zone, Malaysia’s Labuan is the ideal location for business investment and offers access to many other economies across Asia Pacific.

Labuan companies comprise trading and non-trading entities. In 2020, due to slowdowns and restrictions associated with the COVID-19 pandemic, new incorporations declined by 32.3% to 664.34 More than half of the new incorporations were made by investors from Malaysia (40.4%), China (7.8%) and Japan (5.4%).

Also in 2020, the number of deregistration increased sharply to 1,020 which was likely in response to Labuan tax changes. As a result, total operating Labuan companies declined by 5.8% to 5,802 entities.

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Reasons to do business in Labuan include:

Low tax and favorable investment environment

Established business structure including technology innovation, skilled workforce and resources

One-stop center for banking, leasing, ship registration and insurance services

Government is motivated to attract FDI with more incentives to be expected

Malaysia: Making Inroads as a Hub for MNCs Malaysia, an upper middle-income economy and the third largest economy in Southeast Asia35, has transformed itself since the 1970s from a producer of raw materials into a multi-sector economy.

Malaysia’s labor productivity is higher than many of its neighbors thanks in part to a high density of knowledgebased industries and the adoption of cutting-edge technology for manufacturing and digital services.

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Malaysia is an open, state-centric and newly industrialized market economy. Malaysians generally lead a more affluent lifestyle than peers in other upper middle-income countries (like Mexico, Turkey and Brazil) and this is due to a low national income tax, low cost of local food, transport fuel, readily available household essentials, a fully subsidized single payer public-healthcare and comprehensive social welfare benefits.

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Malaysia’s government has stated that it wants to serve as a hub for international businesses in ASEAN, particularly for Chinese firms, and it has been rolling out business-friendly initiatives and policies to encourage foreign direct investment. More than 1,500 Malaysian companies are operating in other ASEAN countries and its solid manufacturing base, cultural diversity and multilingual manpower help to connect it with key markets and support its gateway endeavors.

Like much of the globe, the COVID-19 pandemic has found Malaysia in the throes of successive lockdowns, travel restrictions and productivity halts. As a result, FDI has suffered considerably, falling by 55% down to US$3 billion. This marked the lowest FDI inflow to Malaysia in the last decade. In more positive news, Malaysia was recently ranked sixth on the Global COVID Index (GCI)36, which was developed with input from various international bodies and the World Health Organization (WHO). If recovery prevails, FDI in Malaysia is likely to also rebound in 2022.

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Reasons to do business in Malaysia include:

Rising real estate market and resilient finance industry

Numerous free trade agreements around the world and pro-business government

Advanced medical system with many opportunities Will play a major role in benefiting from the Belt and Road Initiative as well as many other projects in APAC

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Supply chain diversification has been in the spotlight in recent years, due to rising geopolitical tensions, pandemic disruptions and ongoing global shortages. Significantly, the RCEP helps to streamline the necessary global supply chain shifts that can help businesses problem-solve and thrive.

Thanks to the deal’s focus on digitization and smart manufacturing, businesses in Malaysia and Labuan will be incentivized to develop more innovative and competitive products. As ASEAN’s footprint in global supply chains deepens, Tricor Malaysia / Labuan is committed to supporting our clients in their cross-border endeavors throughout the region.

Yeap Kok Leong CEO & Managing Director Tricor Malaysia / Labuan

Myanmar: Poised to be the World's Next Low-Cost Manufacturing Hub Myanmar, formerly known as Burma, is bordered by China to the north, Thailand and Laos to the east, and India and Bangladesh to the west. After Indonesia, it is the second largest country in Southeast Asia.

Major reforms have been implemented to aid economic progress and, in recent years, improvements have been made in regard to corruption, currency exchange rates, foreign investment law and taxation. A major step

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in reforms allows foreigners to conduct business in Myanmar with or without local partners, and guarantees that foreign investments will not be nationalized.

Reduced economic sanctions to allow foreign direct investment will provide the Burmese government with additional tax revenue.

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Reasons to do business in Myanmar include:

Strategically located between China and India

Myanmar attracted US$5.7 billion in fiscal year 201920, around US$110 million short of what it hoped to raise as part of the Myanmar Investment Promotion Plan (MIPP).37 Achieving 98% of its target is evidence that government’s reform efforts are bearing fruit despite the COVID-19 pandemic crisis.

Low-cost & efficient workforce

Newly established Special Economic Zones offer opportunities for foreign enterprises

The United States, Japan and the European Union countries have recently begun to explore reducing economic sanctions against Myanmar. If this trend continues, FDI will likely rise in upcoming years.

Regulatory environment shifting to become more welcoming to foreign investors

Philippines: Quality Manpower & Valuable Resources The Philippines is a newly industrialized country, which has an economy transitioning from being based in agriculture to one with more emphasis on services and manufacturing. The Philippine economy is the 32nd largest in the world and 12th largest in Asia, by nominal GDP.38 The Philippines occupies a strategic geographical location, and the archipelago has an abundance of natural resources. The largest urban area is Metro Manila, located in Luzon.

After Indonesia, the Philippines has the second largest population in Southeast Asia, along with a growing digital community. Penetrations of mobile devices have provided a new avenue for underdeveloped industries

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like financial services to progress. English is taught in all schools in the Philippines, making it the world’s fifth largest English-speaking country.39 350,000 graduates enrich the professional pool every year.

The Philippines saw FDI plummet by 24% in 2020, down to US$654 million. This was lower than the US$867 million recorded in 2019 but nearly matched the amount recorded in 2018.

In better news, FDI inflows grew throughout 2021 and returned to near pre-pandemic levels according to the Philippine central bank.40 Notably, the Philippines now allows 100% foreign ownership in large-scale geothermal projects, which could help to attract additional FDI in upcoming years.

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Reasons to do business in the Philippines include:

Sizeable and capable workforce

Developing infrastructure set for regional and global growth

Consumer-driven population

Government is motivated to attract FDI with many incentives for foreign investors

Singapore: An Open, Pro-Business & Diversified Financial Center Singapore, ranked second overall globally for ease of doing business by the World Bank, has a highly developed and successful free-market economy.41 It enjoys a remarkably open and corruption-free environment, stable prices and a per capita GDP higher than that of most developed countries. The unemployment rate is very low.

The economy depends heavily on exports, particularly consumer electronics, information technology products, medical devices and pharmaceuticals. In addition, Singapore’s vibrant transportation, business and financial services sectors also help power the economy.

Singapore's economy has been ranked as the most open in the world, third least corrupt42, most pro-business, low tax rates (13.3% of GDP)43 and has the fourth highest per-capita GDP in the world in terms of PPP.44 Singapore’s economy is a mixed market-oriented system, with the public sector serving as both an investor and as a catalyst for economic development and innovation.

The government owns 90% of the land and controls some of the means of production.

Currently, the government is attempting to restructure Singapore’s economy by weaning its dependence on foreign labor, addressing weak productivity growth and

increasing Singaporean wages. Singapore has attracted major investments in advanced manufacturing, pharmaceuticals and medical technology production and will continue efforts to strengthen its position as Southeast Asia's leading financial and technology hub.

Singapore is a member of the Regional Comprehensive Economic Partnership (RCEP) with the nine other ASEAN members plus Australia, China, India, Japan, South Korea and New Zealand.

Singapore has long been among the top destinations for FDI. While it suffered some blows in FDI in 2020, against the backdrop of the COVID-19 pandemic, it still ranked fourth in the world overall for FDI, behind the United States, mainland China and Hong Kong SAR. In March of 2022, the Singapore Economy 2030 vision was unveiled by the Ministry of Trade and Industry (MTI), outlining economic goals for services, manufacturing, trade and enterprises for long-term, sustainable growth through the year 2030. As part of the vision, MTI has targeted to raise Singapore's export value from S$805 billion in 2020 to at least S$1 trillion by 2030, while doubling offshore trade value to US$2 trillion.

Learn more about Singapore as a “Gateway to Asia” on page 66 of this report.

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Reasons to do business in Singapore include:

Business-friendly tax and regulatory environment

Ease of starting & conducting business

Strong trade links to the Greater China region

Diversified economy

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The RCEP is greatly enhancing crossborder trade, which is at the very heart of Singapore's open and export-oriented economy. Notably, companies in Singapore are enjoying greater flexibility in their sourcing strategies and now have access to a larger pool of suppliers throughout ASEAN and APAC. At Tricor Singapore, we are committed to helping global and local enterprises pivot their business plans so they can capitalize on these emerging opportunities and collaborate with regional partners to explore new markets.

David Ong CEO Tricor Singapore

Thailand: The Land of Smiles for Global Investors With a relatively well-developed infrastructure, a freeenterprise economy and generally pro-investment policies, Thailand is highly engaged in international trade with exports accounting for about two-thirds of its GDP. Thailand’s main exports include electronics, agricultural commodities, automobiles / parts and processed foods.

The industry and service sectors produce about 92% of GDP. The agricultural sector, comprised mostly of smallscale farms, contributes only 8% of GDP, but employs about one-third of the labor force.45 Thailand has a mixed economic system in which there is a variety of private freedom, combined with centralized economic planning and government regulation. The

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government is now actively accelerating its economy and inviting foreigners to make investments in various business segments. This effort is supported by Thailand’s six free trade agreements (FTAs) with Australia, China, India, New Zealand and the ten member countries of ASEAN. After ranking 28th in 2019 for FDI outflows, Thailand ranked 15th in 2020. On the other hand, Thailand did not fare as well with FDI inflows. FDI stood at a negative US$6 billion, a figure largely driven by the acquisition of the Thai and Malaysian operations of British grocer Tesco by Charoen Pokphand (CP) Group, one of Thailand’s largest business conglomerates, for

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US$10.57 billion.

Thailand has taken steps to address increasing FDI in the future. Notably, the healthcare industry was identified as a priority sector for investment in the Thailand 4.0 policy, which aims to shift the economy to a innovation-driven model.46 The Board of Investment actively promotes health sector investment to position Thailand as the medical hub of Asia, leaning on FDI to accomplish this goal.

Thailand has announced new incentives to accelerate investment in the medical industry, including a 50% reduction in corporate income tax for another three years.47 The existing law already provides a tax holiday of three to eight years for qualified investors. Starting in 2020, manufacturers of medical parts or devices could be exempted from import duties on machinery. Additional Reasons to do business in Thailand include:

Beneficial trade relationships with India, China and ASEAN

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tax benefits are also offered to companies producing non-woven fabric used to manufacture medical masks or medical devices. Thailand was also recognized by the United Nations Conference on Trade and Development for its focus on medical training and development. For example, Chulalongkorn University in Thailand, offers an advanced program with a specialization in industrial pharmacy and comprehensive practical training.

Thailand was also recognized for its innovation in using FDI to promote mass production. In 2020, AstraZeneca, a British–Swedish pharmaceuticals company, licensed Siam Bioscience, a public-private partnership based in Thailand, to produce its COVID-19 vaccines. The commitment of the Government of Thailand to procure locally – with a vision for Thailand emerging as a regional vaccine production hub – contributed to the feasibility of the IP licensing.

“

Thailand’s next phase of economic growth prioritizes key sectors including renewable energy, electric vehicles, smart electronics, medical tourism, pharmaceutical and the digital economy.

Thailand has established various incentives for foreign investors in these industries, though navigating through regulatory intricacies requires local know-how and expertise. As the leading business expansion specialist in Asia, we work with our clients to address their challenges and lay a solid foundation for them to succeed and thrive in Thailand.

Cost-competitive locale with productive workforce & affordable office space

The Thai baht has been APAC’s most stable currency in recent years

Current & upcoming government policies to stimulate FDIs

Dyland Mah Managing Director Tricor Thailand

Vietnam: Emerging as Asia’s Newest ‘Tiger’ Economy Vietnam is a densely populated developing economy that has been transitioning from the rigidities of a centrally planned, highly agrarian economy since 1986 to a more industrial and market-based economy, which has raised income and quality of life substantially. In fact, it has been called Asia’s newest ‘tiger’ economy, following in the footsteps of Hong Kong SAR, Singapore, South Korea and Taiwan.

Vietnam has a young population, stable political system, commitment to sustainable growth, relatively low inflation, stable currency, strong FDI inflows and strong manufacturing sector. In addition, the country is committed to continuing its global economic integration. Vietnam joined the World Trade Organization (WTO) in January 2007 and concluded several free trade agreements in 2015-16, including

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the EU-Vietnam Free Trade Agreement, the Korea Free Trade Agreement and the Eurasian Economic Union Fee Trade Agreement. Vietnam is also a signatory of the Regional Comprehensive Economic Partnership (RCEP) and has in November 2018 ratified its membership in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

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Notably, renewable energy saw a rise in international project finance deals to US$33 billion, with Vietnam accounting for more than 40% of all projects for wind and solar plants.

Unique opportunities within the renewable energy sector Vietnam has great potential for developing renewable energy (RE) projects. Due to rapid economic growth, Fitch Ratings estimated Vietnam electricity demand to increase at an average rate of 9% a year from 2021 onwards.50 The government is actively developing RE sources to ensure that these surging energy demands are met.

To keep pace with global decarbonization initiatives, the Prime Minister announced at the 26th UN Climate Change Conference of the Parties (COP26) in Glasgow that Vietnam shall achieve zero carbon emissions by 2050. As one of the goal’s implementations, in February 2021 the Vietnam government released a draft Power Development Plan (PDP8) for the 2021 to 2030 period, 34 Tricor Group

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Reasons to do business in Vietnam include:

Low setup expenses, ease of doing business & low labor costs

Advantageous free trade agreements

Despite woes of the COVID-19 pandemic, Vietnam jumped from 24th in the world for FDI to 19th in 2020, with FDI falling just 2%. Notably, inflows declined from major Asian economies (e.g. mainland China, Hong Kong SAR, Japan and South Korea), traditionally the largest sources of FDI to Vietnam. Conversely, approximately 40% of FDI in Vietnam was from Singapore.

Even though there were significant investment contractions in processing, manufacturing and real estate activities (Vietnam’s three largest industry recipients of FDI last year)48, the country’s total FDI inflow was cushioned by a rise in investment in electricity projects in 2020. Thai companies are actively investing in the construction of power plants and in retail activities in ASEAN. In Vietnam, EGAT and the Electricity Generating Company are building a US$2.4 billion power plant, Super Energy is constructing the US$384 million Loc Ninh power plant and B. Grimm Power is engaging a US$300 million solar power project.49

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High performing stock market

Government is pursuing policies to attract foreign investors, including privatization and public listing of state-owned enterprises

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In recent years, Vietnam has earned a reputation as a ‘tiger’ economy, becoming one of the most attractive FDI destinations in ASEAN and APAC. The RCEP is particularly significant for the future of trade and investment in Vietnam, as the deal is expected to drive critical domestic regulatory reforms in key areas such as labor laws, investment liberalization, cybersecurity, data security and protection of intellectual property.

In response to mounting opportunities and evolving needs, Tricor Vietnam offers a full suite of expansion solutions to our clients as they navigate the local landscape and explore how the RCEP may impact business decisions.

Lim Chor Ghee General Director Tricor Vietnam

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which will expand wind and solar capacity targets for a higher share of the country’s electricity generation.

PDP8 has been seen as drastic move away from previous iterations, which focused more on hydropower, coal and natural gas resources.

In 2020, solar and wind capacity in Vietnam was 16.6 gigawatts (GW) and 0.6 GW, respectively.51 Under the draft PDP8, Vietnam plans to increase solar capacity to 18.6 GW and wind capacity to 18.0 GW by 2030.

As a result of the favorable policies for solar energy development between 2016 and mid-2019, Vietnam exceeded its 2025 solar energy capacity target (4 GW) early, by having 82 projects online contributing to 4.46 GW of power generation by July 2019. Thanks to the dynamic and innovative environment in Vietnam, the draft PDP8 provides huge opportunities for the nation’s next stage of RE development, and for wind energy in particular.

According to Electricity of Vietnam (EVN), Vietnam requires US$150 billion in capital investments for power generation and construction upgrade.52 In order to meet the high-level capital investment, 100% foreign ownership of Vietnamese energy corporations is permitted. Currently, the government allows three types of market entry options for foreign investments in RE: (1) 100% foreign-invested company, (2) joint venture company and (3) public-private partnership (PPP) in the form of a build-operate-transfer (BOT) contract. In addition, foreign engineering, procurement, and construction (EPC) contractor supporting the

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RE sector can opt to set up a 100% foreign invested enterprise or apply for Foreign Contractor’s License and register a Project Management Office (PMO) to manage their contracting works in Vietnam.

RE projects can take advantage of a range of government tax incentives and exemptions, including preferential corporate income tax (CIT), Feed-in-Tariff (FIT), preferential credit loans, land use tax exemption, and land rental exemption. Foreign contractors may choose one of the three tax methods to declare their income in Vietnam, each of which comes with different registration, compliance and accounting requirements.

Tricor Vietnam is committed to providing holistic and insightful solutions for foreign investment entering the market. We have been helping numerous mid to large RE companies around the world with various types of projects in Vietnam. Notable clients include Armstrong Energy Global, Canadian Solar, CNBM, Ecoplexus, ERS Energy, First Solar, Gulf Energy, Gunkul, HNG Capital, Juwi, Mainstream, Modern Energy, Scatec, Shapoorji Pallonji, Trina Solar and more.

Our committed team has a deep understanding of local regulatory requirements, the type of commercial support and the technology ecosystem that clients need to sustain their competitive edge in the RE field. We collaborate with various partners, including law firms, banks, logistic companies and specialist engineering consultants, to provide seamless corporate solutions to our clients.

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CLIENT TESTIMONIALS

HOW TRICOR CAN HELP

BUSINESS INCORPORATION One of the first steps when expanding into any new market is registering a business or entity. This process varies greatly across the markets of ASEAN and, in some cases, may entail complex requirements and degrees of foreign language interaction. ASEAN offers foreign entities and investors various options for incorporation, each with their own set of parameters, stipulations and requirements.

Because of the potential complexities across these markets, it is advised that you consult with a partner like Tricor Group which has local expertise and connections to ensure a seamless business incorporation process.

A consulting partner can offer advisory on the selection of business structures available with reference to your specific business needs and local requirements of governments. They can also assist on registration with government authorities and subsequent bank account opening.

Registering a Business in Brunei Setting up a business in Brunei can now be done online.

Online application forms are available for either of the following: • •

Incorporation of a company (establishing a Sendirian Berhad) for a flat fee of BND 300; or Registration of a business name (establishing a sole proprietorship or partnership) for a fee of BND 30.

For successful application, the Registry, together with various other government agencies, must be satisfied of the intent of the company set up. This oftentimes requires prospective investors to provide business plans, financial support documentation, detailed resumes and qualifications of shareholders and directors, amongst other documents. Foreign ownership is subject to the satisfactory review and approval by these agencies. Due to this review and approval processes, incorporation can take several months.

We always recommend that a client engages a trusted service provider, such as Tricor Group, to incorporate and register its companies. Many companies have approached us for guidance after attempting to selfincorporate, and subsequently realizing that the clauses in their standard M&A do not cover their intended nature of business, nor the governing of their operations. Moreover, the online service does not provide any professional guidance with regard to postincorporation statutory requirements and other annual statutory compliance matters.

38 Tricor Group

To save you time and effort, our professional team in Brunei can guide you through the options and structures available for businesses to trade in the country. Tricor Group can help you determine what the best structure for your business is, furnish the required documents and assist in all of the follow-up procedures.

WHY ASEAN?

OVERVIEW OF ASEAN MARKETS

BUSINESS INCORPORATION

TAX CONSIDERATIONS

LABOR ENVIRONMENT

ASEAN: THE LEVER FOR CHINA’S REGIONAL PLANSS

SINGAPORE: THE GATEWAY TO ASEAN

OPPORTUNITIES & CHALLENGES

CASE STUDIES

CLIENT TESTIMONIALS

HOW TRICOR CAN HELP

Registering a Business in Indonesia The legal entity through which a foreign person, foreign company or foreign government body can conduct business in Indonesia (meaning generating revenue streams and profit) is the Perseroan Terbatas Penanaman Modal Asing (PT PMA). The establishment of a PT PMA is regulated by Law No. 40/2007 regarding limited liability companies (company law). Such a company can be either 100% foreign-owned or partially foreign-owned.

The Priority List (under Presidential Regulation No. 10 of 2021 on Investment Business Lines as amended by Presidential Regulation No. 49 of 2021) replaces the negative list. Under the new regulation, all business lines are open for foreign investment, except for six closed sectors and business fields with certain conditions. This change significantly reduces the number of business lines limited or restricted from foreign investment.

A new Indonesian licensing system, called the RiskBased Online Single Submission (OSS) System, was launched in 2021 through government Regulation No. 5. This is one of the new regulations of Law No. 11 of 2020 concerning job creation (commonly known as the Omnibus Law).

Before establishing a legal entity, it is recommended to start by asking the following questions: What type of legal entity do I need? A company (PT PMA) or a representative office (KPPA)?

A PT PMA is required if you plan to generate revenue, profit or engage in sales directly in Indonesia. A representative office would be more appropriate if you solely want to explore business opportunities for your foreign company (through avenues such as market research and networking) without engaging in commercial transactions inside Indonesia.

What is the business line (KBLI) of the PT PMA? Using a risk-based approach, we can assess the category (low, medium or high risk) and the required business licenses.

From there, it is highly recommended that you consult with a local partner like Tricor Group to help work with the Indonesia Investment Coordinating Board (BKPM).

Working alone as a foreign entity can be challenging.

A trusted partner will help you determine the best structure, up front capital costs, permit procedures and work with the BKPM on your behalf.

ASEAN Business Guide 2022 39

WHY ASEAN?

OVERVIEW OF ASEAN MARKETS

BUSINESS INCORPORATION

TAX CONSIDERATIONS

LABOR ENVIRONMENT

ASEAN: THE LEVER FOR CHINA’S REGIONAL PLANSS

SINGAPORE: THE GATEWAY TO ASEAN

OPPORTUNITIES & CHALLENGES

CASE STUDIES

CLIENT TESTIMONIALS

HOW TRICOR CAN HELP

Registering a Business in Labuan The growth of the Labuan International Business and Financial Center (IBFC) is supported by an effective regulatory and supervisory regime that ensures the stability of the jurisdiction’s financial system. Labuan IBFC’s laws are regularly reviewed and revised to ensure that the market remains competitive and relevant.

Labuan IBFC provides multiple company structures and solutions for business expansion and investment in Asia Pacific and beyond. Over the years, the promoted activities in Labuan have evolved. At present, Labuan focuses on these core areas:

Labuan Companies Labuan IBFC offers three main types of Labuan company structures, namely Labuan Company, Labuan Protected Cell Company and Partnership. Entrepreneurs and investors are welcome to conduct cross-border businesses and enjoy a range of tax benefits. Labuan's strategic location near other financial centers enables businesses to tap into the many investment opportunities in the region. Labuan companies can conduct either trading or non-trading transactions in, from or through Labuan IBFC.

Financial Licenses Various financial licenses are offered for new entries and existing market players to facilitate the evolving needs and trends of current businesses, including Banking License, Fund Manager License and Captive Insurance License. Aside from offering generous tax incentives, Labuan IBFC’s mature compliance guidelines and regulations facilitate the establishment and ongoing operations of licensed entities. The jurisdiction’s geographic position in APAC promotes the likelihood of cross-country cooperation and connects investors to other emerging markets in the region.

Fintech Licenses and Solutions

Labuan IBFC is the only midshore jurisdiction in Asia that supports a comprehensive fintech ecosystem for entrepreneurs and investors to seek suitable solutions and expand their business. As such, Labuan IBFC offers Digital Banking License, Cryptocurrency Money Broking License, Credit Token License and Payment System solutions to facilitate the growing digital ecosystem.

Wealth Management Structures The introduction of the Labuan Foundations Act 2010 provides high-net-worth families with more choices in planning and structuring their family succession. A Labuan Foundation, either in the form of a Labuan Private Foundation or a Labuan Charitable Foundation, can be structured in either the conventional or the Islamic form.

The process for registration can be challenging and it is recommended that you consult with a local partner like Tricor Group to help you determine which category best suits your business needs and provide expert advice regarding documentation requirements.

40 Tricor Group

WHY ASEAN?

OVERVIEW OF ASEAN MARKETS

BUSINESS INCORPORATION

TAX CONSIDERATIONS

LABOR ENVIRONMENT

ASEAN: THE LEVER FOR CHINA’S REGIONAL PLANSS

SINGAPORE: THE GATEWAY TO ASEAN

OPPORTUNITIES & CHALLENGES

CASE STUDIES

CLIENT TESTIMONIALS

HOW TRICOR CAN HELP

Registering a Business in Malaysia A foreign person can register a corporation in Malaysia with 100% foreign ownership. This is called a Sdn Bhd. In order to have complete foreign ownership, the company must be in specific industries as dictated by the government. The following are a few of the industries in which the Malaysian government is trying to encourage foreign investment:

Education

Petroleum, oil & gas

Banking & finance

Outbound tourism & ticketing

Agriculture

In order to form a Sdn Bhd (Private Limited Company) in Malaysia, according to the Companies Act 2016, you will need at least one director and one shareholder. You will also need to make a decision in terms of ownership: Do you want to restrict the type of business you can operate by owning 100% of the company? Or do you want more flexibility in the products and services sold by having part of the company owned by a Malaysian?

Once the structure of the business is determined, the entity is incorporated by the same process for all businesses regardless of foreign or local ownership.

Registering a Business in Singapore Foreign company registration in Singapore is a simple process once underway, but there is a lot to consider before starting the process. A foreign corporation or multinational company in Singapore has several options to choose from, each with different advantages, limitations and stipulations. The choice of business structure will depend on the anticipated extent and scope of business activities.

ASEAN Business Guide 2022 41

WHY ASEAN?

OVERVIEW OF ASEAN MARKETS

BUSINESS INCORPORATION

TAX CONSIDERATIONS

LABOR ENVIRONMENT

ASEAN: THE LEVER FOR CHINA’S REGIONAL PLANSS

SINGAPORE: THE GATEWAY TO ASEAN

OPPORTUNITIES & CHALLENGES

CASE STUDIES

CLIENT TESTIMONIALS

Subsidiary Company A subsidiary company is a locally incorporated private limited company and the majority shareholder is another local or foreign company. In Singapore, companies can be fully foreign-owned, which allows foreign companies to incorporate a subsidiary company and own 100% of its shares. Under Singaporean law, a subsidiary company is considered as a separate entity (from its foreign parent company) and is treated as a local Singapore company. Thus, the foreign company and its assets cannot be held for the debts and liabilities of the subsidiary.

Branch Office A Singapore branch office is a registered legal entity which is treated as an extension of the foreign parent company. Branch offices are allowed to conduct any type of business activity that falls within the scope of its parent company and can repatriate its earnings and capital. Branch offices will only be taxed for the earnings derived from its operations in Singapore. Branch offices are considered a nonresident entity, which means that the foreign company’s head office will be held liable for any acts of commission or omission committed by the Singapore branch office. The non-resident status of branch offices also excludes them from some of the tax exemptions that local and subsidiary companies enjoy. Companies or individuals are generally advised to register a branch office if they are running a medium to large-sized business that has specialized operations in international locations and intends to conduct a wide range of business activities in Singapore.

Representative Office A representative office is a temporary setup which enables foreign companies to explore the market or manage company affairs in Singapore without conducting any direct sale or profitable business activity. Representative offices do not have any legal status. Thus, representative offices cannot sign contracts, trade, lease warehouses, raise invoices or open letters of credit - neither directly nor on behalf of their foreign parent companies. Foreign companies bear implicit liability for the activities of their representative offices in Singapore. Companies or individuals are generally advised to set up a representative office if their main objective is to study the Singapore business environment before committing any form of investment or if they have considerable non-core activities to be managed in Singapore.

Registering a Business in Thailand Thailand’s Department of Business Development (DBD) has implemented an e-Registration system53, which saves businesses the hassle of the conventional registration process. Moving forward, a foreign business can appoint someone through a power of attorney to appear on its behalf, in order to verify its identity and obtain a username and password, which are used as the digital signature for submitting applications and which are linked to a mobile telephone number in Thailand for purposes of receiving one-time-passwords (OTP) from the DBD. Overall the process has become a lot more flexible. Here are some of the popular options for foreign businesses in Thailand:

42 Tricor Group

HOW TRICOR CAN HELP

WHY ASEAN?

OVERVIEW OF ASEAN MARKETS

BUSINESS INCORPORATION

TAX CONSIDERATIONS

LABOR ENVIRONMENT

ASEAN: THE LEVER FOR CHINA’S REGIONAL PLANSS

SINGAPORE: THE GATEWAY TO ASEAN

OPPORTUNITIES & CHALLENGES

CASE STUDIES

CLIENT TESTIMONIALS

HOW TRICOR CAN HELP

Thai Limited Company The most popular business structure among general investors is the private limited company, due to the fact that the liability of the investors is limited to the amount of unpaid shares committed.

A Thailand limited company requires a minimum of three promoters who file a memorandum of association, convene a statutory meeting and register the company. Depending on the business activities to be conducted, certain foreign-owned company may require a Foreign Business License prior to commencing operations in Thailand. Some companies are required to register into the value-added tax (VAT) system, depending on the types of business and the level of gross income.

They must also follow accounting procedures specified in the Civil and Commercial Code, the Revenue Code and the Accounting Act. Companies are required to close their accounts and have an auditor review their books and file their audited financial statements once a year with the Revenue Department and the Department of Business Development.

Branch Office Setting up a branch office in Thailand requires a Foreign Business License, upfront capital, VAT registration number and taxpayer identification number. A commercial registration certificate may be required for certain industries. The branch manager can be a Thai citizen or a foreigner holding a work permit in Thailand.

Representative Office A representative office can be 100% foreign-owned, but it cannot generate profit or income. This does not require a foreign business license and is a great option for those looking to engage in market research, promote a parent company, find sources for purchasing goods / services in Thailand or manage the quality and quantity of goods purchased or manufactured in Thailand.

Registering a Business in Vietnam While the official administrative cost of setting up a business in Vietnam is relatively insignificant, central and provincial licensing procedures can be laborious and time consuming. Employers will also need to be mindful of various taxes, social insurance and labor registrations with the local authorities.

A limited liability company (LLC) is the most common company structure for incorporating foreign-owned subsidiaries in Vietnam. An LLC can have one to 50 members who are also known as founders or owners. Take note that LLCs in Vietnam do not have any shareholders. Setting up this type of company involves a two-stage process: You will need to obtain investment approval from the Department of Planning and Investment in the municipal city or province of investment (issued in the form of an Investment Registration Certificate or IRC) for your project in Vietnam. During this investment licensing process, specific approvals from one or several regulatory bodies will be required for business sectors which are

subject to investment conditions as regulated by local laws or multilateral or bilateral trade / investment agreements. Then, upon receiving the IRC, you will need to obtain an Enterprise Registration Certificate (ERC) for the establishment of your company in Vietnam. The application for an ERC is a relatively straightforward administrative process.

Investors should note that the process of obtaining an IRC and ERC can take from one month to 45 days (or even more if the business sector is conditional). It is advisable to seek consultation with a local expert partner like Tricor Group.

In general, there is no minimum capital requirement in Vietnam. However, the capital you contribute should reflect the proposed business activities of the company.

Certain business lines falling under conditional investment sectors may be subject to minimum capital requirements.

ASEAN Business Guide 2022 43

04

TAX CONSIDERATIONS

WHY ASEAN?

OVERVIEW OF ASEAN MARKETS

BUSINESS INCORPORATION

TAX CONSIDERATIONS

LABOR ENVIRONMENT

ASEAN: THE LEVER FOR CHINA’S REGIONAL PLANSS

SINGAPORE: THE GATEWAY TO ASEAN

OPPORTUNITIES & CHALLENGES

CASE STUDIES

CLIENT TESTIMONIALS

TAX CONSIDERATIONS While there are cultural, language, economic and geographic overlaps between the markets of ASEAN, each has its own unique tax code with different reporting requirements. Even within these markets, there may be local taxation requirements from the city or territory. There have been efforts by ASEAN governments to simplify the tax codes, but there are still complexities for reporting and keeping accounting records, with requirements and policies subject to change.

Investors looking to expand across this region may find it challenging to streamline accounting procedures on their own and instead may benefit from consulting with a partner who has local tax expertise. An effective partner can help develop tax strategies and furnish reporting packages that comply with requirements and maximize deductions and incentives.

It is critical to be aware of the tax requirements in ASEAN. Furthermore, it is certainly worth hiring a trusted partner to do the heavy lifting while you focus on your core business operations.

Reporting & Tax Requirements in Brunei Companies locally incorporated or registered as a branch of a foreign company are subject to a tax on income accruing in, derived from or received in Brunei.

Branches of foreign companies are taxed on their profits arising in Brunei at the same rate as corporations. The standard rate is 18.5% with a 55% rate applying to all oil and gas companies.54 A foreign tax credit is available for taxes paid on foreign-source income, but it is limited to the tax assessed at half of Brunei’s rate.

The first B$100,000 of chargeable income is taxed at a reduced rate of a quarter of the full rate (4.625%).

The next B$150,000 of chargeable income is taxed at half the full rate (9.25%). Small companies with gross sales or turnover of B$1,000,000 or less are exempt from corporate tax (or charged a 0% rate). For a new company, the first B$100,000 of its chargeable income is fully exempt from tax for its first three consecutive years of assessment.

46 Tricor Group

Withholding Tax Dividends: Not taxed.

Interest: Interest paid to a non-resident is subject to a 2.5% withholding tax.

Royalties: Royalties are subject to a 10% withholding tax.

Indirect Tax Brunei does not impose any value-added tax (VAT) or sales tax.

Personal Tax Personal income is not taxed in Brunei, for neither residents nor non-residents.

HOW TRICOR CAN HELP

WHY ASEAN?

OVERVIEW OF ASEAN MARKETS

BUSINESS INCORPORATION

TAX CONSIDERATIONS

LABOR ENVIRONMENT

ASEAN: THE LEVER FOR CHINA’S REGIONAL PLANSS

SINGAPORE: THE GATEWAY TO ASEAN

OPPORTUNITIES & CHALLENGES

CASE STUDIES

CLIENT TESTIMONIALS

HOW TRICOR CAN HELP

Reporting & Tax Requirements in Indonesia Below are key considerations regarding corporate taxes: •

•

•

•

A flat corporate income tax (CIT) rate of 22% is imposed on all Indonesian companies, as well as foreign companies operating in Indonesia via a permanent establishment.

Small companies with a gross turnover of not more than IDR 4.8 billion are subject to a final income tax of 0.5% of annual sales. This is valid for 3 years from when the company was established or when gross revenue exceeded IDR 4.8 billion. Small companies also can choose to use normal CIT rate by submitting an application.

Small and medium-sized local companies, with an annual turnover of less than IDR 50 billion, receive a 50% reduction of the tax rate imposed on taxable income corresponding to a turnover of up to IDR 4.8 billion.

Listed companies with at least 40% of their paidup capital traded on the stock exchange receive a 3% deduction in their tax rate (an effective tax rate of 22%).

Indonesia grants various tax incentives to resident companies to encourage capital investments in particular industry sectors as well as targeted geographic locations, such as the northeastern provinces and those in Sulawesi. These include a 30% tax investment allowance, accelerated depreciation or amortization, extended carry forward of losses for up to 10 years and more.

Also, simplified and expanded tax holiday incentives for new domestic or foreign investment in Indonesia’s ‘pioneer industries’ include a guaranteed 100% tax cut.

This means that new businesses that qualify will be exempt from corporate tax for a period of five to 20 years, depending on the size of the investment.

A VAT of 10% is levied on goods and services. It will increase to 11% in April 2022. This includes intangible goods (such as royalties), all manufactured goods, whether produced locally or imported, and services provided outside Indonesia to Indonesian businesses.

There is no VAT on exports of taxable goods, certain services, and certain other goods, including unprocessed minerals, agricultural products, basic necessities, banking & insurance services, hotel & restaurant activities and various social services. Indonesia also levies a sales tax on luxury goods, with rates ranging from 10% to 125%.

Here is how Indonesia imposes withholding tax: Dividends Dividends paid to non-residents are subject to a 20% withholding tax or based on the tax treaty agreement for that country. There will be no tax when dividends are paid to a resident company. If the dividends are paid to a taxresident individual, a 10% final tax is imposed. They may incur no tax if invested in Indonesia.

Interest Interest paid to a non-resident is subject to a 20% withholding tax or based on the tax treaty agreement for that country. If the interest is paid to a resident, it is subject to a 15% withholding tax.

Certain recipients are exempt from withholding tax, including resident banks.

Royalties Royalties remitted abroad are subject to a 20% withholding tax or based on the tax treaty agreement for that country. If the royalties are paid to a resident, they will be subject to a 15% withholding tax.

Indonesia’s progressive system of personal income tax rates runs from 5% to 35%. Profits from employment, a business and capital gains are taxed, less deductible expenses and allowances. The top marginal rate of 35% applies to annual taxable income that exceeds IDR 5 billion. All income earned by an individual doing business that does not exceed IDR 4.8 within a fiscal year is also subject to a reduced final tax of 0.5%.

Resident and non-resident taxpayers are taxed on their worldwide gross income. An individual is considered to be a tax resident if in Indonesia for 183 days or more in any 12-month period.

ASEAN Business Guide 2022 47

WHY ASEAN?

OVERVIEW OF ASEAN MARKETS

BUSINESS INCORPORATION

TAX CONSIDERATIONS

LABOR ENVIRONMENT

ASEAN: THE LEVER FOR CHINA’S REGIONAL PLANSS

SINGAPORE: THE GATEWAY TO ASEAN

OPPORTUNITIES & CHALLENGES

CASE STUDIES

CLIENT TESTIMONIALS

HOW TRICOR CAN HELP

Reporting & Tax Requirements in Labuan Labuan IBFC implements a simple tax framework under the Labuan Business Activity Tax Act (LBATA), which covers Labuan business activity (trading or non-trading) carried on by a Labuan entity in, from or through Labuan.

Tax is charged at a rate of 3% for a year of assessment on the net audited profits of a Labuan entity carrying on a Labuan business activity.

The tax code also provides that a Labuan entity carrying on a Labuan business activity that is deemed a non-trading activity in Labuan will be exempt from tax in Labuan. A Labuan non-trading activity includes transactions relating to the holding of investments in securities, stock, shares, loans, deposits or any other properties by a Labuan entity on its own behalf.

Tax Rate if Compliance with Substance Requirements

Substance Requirements Type of Company

Investment Holding Company i) Pure Equity Holding Only receive dividend income from investments ii) Non-Pure Investment Holding Income received from rental, interests, bonds, dividends, etc.

Labuan Business Activities as Prescribed in the Substance Regulations i) Licensed and Labuan Trading Activities Activities Not Listed in the Substance Regulations i) Trading activities Any forms of business activities involving import and export, etc. ii) Intellectual Property

Full Time Employee in Labuan

Operating Expenses (OPEX) in Labuan (RM)

Yes

No

N/A (But control & management must be exercised in Labuan) 1

20,000

0%

24%

20,000

0%

24%

2-3 (According to the type of license)

100,000 – 200,000

3%

24%

No substance required, tax under the Income Tax Act 1967 (ITA) at 17% or 24% (depending on the income and size of the company)

There are also some Labuan tax changes that have come into force since January 1, 2019: •

•

Abolishment of MYR 20,000 flat tax: Labuan entities that undertake trading activities can no longer elect to pay tax at the fixed rate of MYR 20,000 and are instead charged at 3% on net audited profits from their Labuan business activities for each year of assessment, subject to meeting substance requirements. Meanwhile, Labuan entities that undertake non-trading activities continue to be exempted from tax under LBATA regulations provided substance requirements are met.

Income for intellectual property (IP): Any income from intellectual property rights is now subject to 24% tax under the Malaysian Income Tax Act 1967 (ITA).

Some additional provisions include: 48 Tricor Group

•

• •

•

Payments to non-residents: Labuan does not impose any applicable withholding taxes on payments to non-resident persons by Labuan entities which meet substance requirements. This includes payments of dividends, interest, royalties and directors’ fees.

Stamp duty exemption available: Subject to meeting substance requirements.

Access to tax treaties: Certain tax treaties such as the Malaysia-Japan tax treaty specifically exclude entities that are taxed under the LBATA from treaty benefits. However, Labuan entities may be able to obtain treaty benefits through tax treaties that do not specifically exclude those taxed under LBATA. Irrevocable election to be taxed under ITA: A Labuan entity can make an irrevocable election for its profits to instead be taxed under the Malaysian Income Tax Act (ITA). Consequently, the Labuan entity will be subject to the provisions of the ITA for its tax obligations instead of the LBATA.

WHY ASEAN?

OVERVIEW OF ASEAN MARKETS

BUSINESS INCORPORATION

TAX CONSIDERATIONS

LABOR ENVIRONMENT

ASEAN: THE LEVER FOR CHINA’S REGIONAL PLANSS

SINGAPORE: THE GATEWAY TO ASEAN

OPPORTUNITIES & CHALLENGES

CASE STUDIES

CLIENT TESTIMONIALS

HOW TRICOR CAN HELP

Reporting & Tax Requirements in Malaysia Key factors regarding corporate taxes in Malaysia: •

• •

Malaysia considers a company to be resident if its management and control is exercised in Malaysia. Where it was incorporated is irrelevant.

Resident and non-resident companies are taxed only on income accrued in or derived from Malaysia. Resident companies engaged in banking, insurance, shipping or air transport activities are taxed on global income.

The corporate income tax rate is 24%, reduced from 25% in 2016.

Resident small and medium enterprises (companies incorporated in Malaysia with paid-up capital of RM2.5 million or less) receive a concessionary tax rate of 17% on the first RM600,000 of their chargeable income. The balance is taxed at the 24% rate. Small companies that are directly or indirectly controlled by or related to companies with paid-up capital of more than RM2.5 million do not qualify for the concessionary rate.

Malaysia offers companies tax exemptions, deductions, allowances and other incentives to boost economic activity in sectors such as manufacturing, biotechnology, education, financial services, petrochemicals, regional operations, R&D and logistics. Companies operating within special economic corridors may also qualify for some incentives if they meet certain requirements.

Some considerations for withholdings: •

There is a 15% withholding tax on interest paid to a non-resident. But interest paid to a nonresident by a bank operating in Malaysia is exempt from tax, except for interest accruing to

• •

the non-resident’s place of business in Malaysia and interest paid on funds required to maintain “networking funds”.

There is a 10% withholding tax on royalties paid to a non-resident.

A 10% withholding tax is also imposed on fees paid to a non-resident for services rendered in Malaysia.

Malaysia currently does not have a VAT/GST regime but implements a sales and services tax (SST) regime that imposes 5% or 10% on manufactured / imported taxable goods and 6% on taxable services.

Malaysia’s personal income tax rates for residents follow a progressive schedule: the higher the income earned, the higher the marginal income tax levied. The highest personal income tax rate at the moment is 30%.

This applies to the highest chargeable income bracket of above RM 2 million. Foreigners who stay or work in Malaysia for 182 days or more in a calendar year are considered residents.

Non-residents are taxed at a flat rate of 30%. Income derived from Malaysia is taxed. In effect from January 1, 2022, income derived by a resident from sources outside Malaysia and received in Malaysia is taxed at 3% of gross income remitted from January 1, 2022 to June 30, 2022 whist income remitted after July 1, 2022 will be taxed at the prevailing rate applicable on such income. However, as a concessionary treatment, foreign source dividend received by companies as well as all types of foreign sourced income of individuals continue to be tax exempted from January 1, 2022 to December 31, 2026.

ASEAN Business Guide 2022 49

WHY ASEAN?

OVERVIEW OF ASEAN MARKETS

BUSINESS INCORPORATION

TAX CONSIDERATIONS

LABOR ENVIRONMENT

ASEAN: THE LEVER FOR CHINA’S REGIONAL PLANSS

SINGAPORE: THE GATEWAY TO ASEAN

OPPORTUNITIES & CHALLENGES

CASE STUDIES

CLIENT TESTIMONIALS

HOW TRICOR CAN HELP

Reporting & Tax Requirements in Singapore Whether local or foreign, all companies in Singapore are taxed a flat rate of 17% on its chargeable income.22 Singapore has been lowering its corporate tax rate over the years: it fell from 20% to 18% in 2008 and then to 17% in 2010. And, with the various exemptions, rebates and other tax relief schemes, many companies in probusiness Singapore find their effective corporate tax rate to be even lower.

and video streaming, apps, online subscriptions and services such as marketing and accounting.

Tax exemption or partial tax exemption for startups

Here are some points about withholding taxes in Singapore:

All companies in Singapore are entitled to partial tax exemption on up to S$102,500 of the first S$200,000 of its chargeable income. New companies and startups may qualify for tax exemption up to a maximum S$125,000 on chargeable income in their first three years of assessment (YAs). Most new companies, except those wholly owned by corporates or whose principal activity is investment holding or property development (whether for sale or investment), will qualify for this exemption.

Singapore’s goods and services tax (GST) is a broadbased consumption tax of 7% that is levied on nearly all goods and services in Singapore. Exports of goods and international services are zero-rated while the sale and lease of residential properties and financial services are exempt from GST. GST will be 8% with effect from January 1, 2023, and 9% with effect from January 1, 2024.

Beginning on January 1, 2020, a new GST was also pegged to imported e-commerce services such as music

50 Tricor Group

A person who makes payments (such as royalty, interest and technical service fees) to a non-resident company or individual is required to withhold a percentage of that payment, and pay that withholding tax to the Inland Revenue Authority of Singapore (IRAS).

Dividends No withholding tax is levied on dividends paid by companies to residents of Singapore.

Interest 15% withholding tax on interest paid to a non-resident (unless reduced under a tax treaty or exempted).

Royalties 10% withholding tax on royalties paid to a non-resident (unless reduced under a tax treaty or exempted).

WHY ASEAN?

OVERVIEW OF ASEAN MARKETS

TAX CONSIDERATIONS

BUSINESS INCORPORATION

LABOR ENVIRONMENT

ASEAN: THE LEVER FOR CHINA’S REGIONAL PLANSS

SINGAPORE: THE GATEWAY TO ASEAN

OPPORTUNITIES & CHALLENGES

CASE STUDIES

CLIENT TESTIMONIALS

HOW TRICOR CAN HELP

The highest personal income tax rate at the moment is 24%. Singapore’s income tax rates depend on an individual's tax residency status. A tax resident for a particular year of assessment (YA) is described as a Singapore Citizen or Singapore Permanent Resident who resides in Singapore, or a foreigner who has stayed/worked in Singapore for 183 days or more in the year preceding the YA. Other persons are treated as non-residents. Singapore’s personal income tax rates for residents follow a progressive schedule: the higher the income earned, the higher the marginal income tax levied.

Non-resident tax rates from YA 2024 onwards are as follows: • Income received by non-resident professionals is 15% of gross income or 24% of net income.

• Remuneration including director's fees received by non-resident directors is taxed at 24%.

Resident tax rates from YA 2024 onwards is as follows58:

•

The standard corporate income tax rate that applies to most companies operating in Thailand is 20%. The tax is imposed on a company’s net taxable profits: business or trading income, passive income and capital gains/losses, minus expenses incurred in generating those profits.

•

Thai resident companies - those incorporated in Thailand - are subject to corporate tax on their worldwide income. Non-resident companies are subject to Thai tax only on their Thailand-sourced income. The Thai branch of foreign corporations is considered a separate tax entity and normally constitute a permanent establishment in Thailand which will be subject to corporate tax on their worldwide income as well.

•

Locally-incorporated small and medium-sized enterprises (SMEs) - those with paid-up capital of no more than THB 5 million and revenue of no more than THB 30 million a year – are subject to a progressive set of corporate income tax rates of 0%, 15% or 20%, depending on the SME’s profitability.

•

Thailand’s Board of Investment offers tax holidays of 3-10 years for specific business activities being promoted in Thailand and additional one to five years but not exceeding 13 years in total for businesses investing in promoted areas and industrial parks or qualifying for merit-based incentives.

•

Companies that situate their regional operating headquarters in Thailand benefit from a lower 3% to 8% rate on net taxable profits. Their foreign expatriate employees may also benefit from a fixed personal income tax rate of 15%.

Chargeable income (S$)

Income tax rate (%)

Gross tax payable (S$)

First 20,000 Next 10,000

0 2

0 200

First 30,000 Next 10,000

3.5

200 350

First 40,000 Next 40,000

7

550 2,800

First 80,000 Next 40,000

11.5

3,350 4,600

First 120,000 Next 40,000

15

7,950 6,000

First 160,000 Next 40,000

18

13,950 7,200

First 200,000 Next 40,000

19

21,150 7,600

First 240,000 Next 40,000

19.5

28,750 7,800

First 280,000 Next 40,000

20

36,550 8,000

First 320,000 Next 180,000

22

44,550 39,600

First 500,000 Next 500,000

23

84,150 115,000

First 1,000,000 In excess of 1,000,000

24

199,150

Reporting & Tax Requirements in Thailand The following key points related to corporate income tax, value-added tax (VAT) and withholding tax (WHT) in Thailand23 should be taken into consideration:

ASEAN Business Guide 2022 51

WHY ASEAN?

OVERVIEW OF ASEAN MARKETS

BUSINESS INCORPORATION

TAX CONSIDERATIONS

LABOR ENVIRONMENT

ASEAN: THE LEVER FOR CHINA’S REGIONAL PLANSS

Under its International Business Centers (IBC) regime, Thailand also grants privileges such as a 15-year corporate income tax reduction, a personal income tax reduction to a flat fee for expatriate employees, and a specific business tax exemption for gross receipts from providing financial management to associated enterprises.

•

•

Value-added tax (VAT) is a non-cumulative broadbased consumption tax levied on the supply of goods or provision of services in Thailand by VAT operators. The current standard rate of VAT is 7%. This is a concessionary rate, reduced from a standard rate of 10% and is expected to remain in effect at this rate until September 30, 2023.

Companies with an annual turnover of THB 1.8 million or less are exempt from VAT. Specific activities are also exempt, including certain agricultural products, chemicals, newspapers, healthcare, education services, certain professional services and cultural services such as libraries, museums and zoos.

For personal taxes, Thailand taxes both residents and non-residents on income derived in Thailand. Residents (individuals present in Thailand for 180 days or more in a calendar year) are taxed on foreign-sourced income only if the income is remitted into Thailand in the same year that it is received.

Personal tax rates follow a progressive schedule that rises to a top marginal rate of 35%. This applies to income that exceeds THB 5 million.

52 Tricor Group

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Here are some key points about withholding taxes in Thailand: Withholding Tax •

Whether they are paid to another Thai company, a non-resident company or to an individual, dividends are subject to a 10% withholding tax.

•

Interest paid to a non-resident company is subject to a 15% withholding tax.

•

Royalties paid to another Thai company are subject to a 3% advance withholding tax (can be credited against final corporate income tax bill for each period). Royalties paid to a non-resident are subject to a 15% withholding tax.

•

Payments made to certain categories of suppliers and service providers are subject to withholding tax at rates varying between 1% to 5%.

Reporting & Tax Requirements in Vietnam Vietnam imposes a standard corporate tax rate of 20% on a company’s profits, including the profits of its affiliates and branches.24 Taxable revenue includes income from the sale of goods, provision of services, leasing or sale of assets, joint venture operations and more activities that generate revenue.

A company is generally considered to be resident if it is incorporated in Vietnam. Resident companies are taxed on worldwide income while non-resident

WHY ASEAN?

OVERVIEW OF ASEAN MARKETS

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ASEAN: THE LEVER FOR CHINA’S REGIONAL PLANSS

companies are taxed on Vietnamese-sourced income generally through a withholding tax regime, which is subject to tax treaties.

Enterprises operating in the oil and gas and natural resources sectors are levied at higher tax rates, ranging from 32% to 50%, depending on the particular projects.

The government offers preferential corporate income tax rates to encourage investment in specific projects or sectors.

•

•

•

A 10% rate applies to enterprises in sectors including education, training, occupational training, healthcare, culture, sports, environment, social housing, forestry, agriculture, fishing, salt production and publishing. This is subject to conditions.

A 10% rate applies for a 15-year period and may be offered for projects including: ○ New investment projects in economic zones, high-tech zones and locations with challenging socioeconomic conditions. ○ New investment projects engaged in research and technological development, cultivation of high-tech enterprises and investment in key infrastructure projects such as water plants, power plants, bridges, railways, airports, seaports and others. ○ Large-scale manufacturing projects, with investment capital of more than VND 12 trillion.

A 17% rate applies for a 10-year period and may be offered for projects including: ○ New investment projects in economic zones, high-tech zones and locations with challenging socio-economic conditions. ○ New investment projects engaged in producing high-qualified steel or energysaving products, manufacturing machinery and equipment for agriculture, forestry, aquaculture, salt production and irrigation.

Other tax exemptions and reductions are offered on certain conditions, such as a tax holiday of up to four years and a 50% tax reduction for up to nine subsequent years.

•

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Reduced rates of 5% and 0% VAT apply to specific categories of goods, such as medical equipment and instruments, fresh food and scientific and technical services (5%), and the exports of goods and services (0%).

There is withholding tax levied in Vietnam: Dividends No tax is imposed generally on dividends remitted overseas. But if they are paid to an individual, a 5% withholding tax is levied.

Interest

Interest paid to a non-resident is subject to a 5% withholding tax.

Royalties

Royalties paid to a non-resident are subject to a 10% withholding tax.

Vietnam’s personal income tax rates follow a progressive schedule that ranges from 5% to 35%, depending on the individual’s yearly income. The top marginal rate of 35% applies to annual chargeable income above VND 960 million.

Vietnamese residents are taxed on their worldwide income while non-residents are taxed only on Vietnamsourced income. All employment income, including employment benefits in both cash in kind, dividends, interest (except interest on bank deposits, life insurance and government bonds), capital gains from securities trading and various other types of income such as that from franchising, inheritance and prizes are also taxable.

An individual is considered a resident if he or she spends 183 days or more within a 12-month period in Vietnam, or maintains a residence in Vietnam or has leased a residence in Vietnam for 183 days or more within a tax year and cannot prove residence elsewhere.

Vietnam currently levies a standard value-added tax (VAT) of 10% on most common goods and services and a special sales tax of 5% to 150% on certain types of goods and services.

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05

LABOR ENVIRONMENT

WHY ASEAN?

OVERVIEW OF ASEAN MARKETS

BUSINESS INCORPORATION

TAX CONSIDERATIONS

LABOR ENVIRONMENT

ASEAN: THE LEVER FOR CHINA’S REGIONAL PLANS

SINGAPORE: THE GATEWAY TO ASEAN

OPPORTUNITIES & CHALLENGES

CASE STUDIES

CLIENT TESTIMONIALS

HOW TRICOR CAN HELP

LABOR ENVIRONMENT Your company is only as good as the people who work for you. Arguably, the single most significant determinant of a company’s success in global expansion endeavors will be the quality of the staff, partners, advisors and consultants it hires. Building the right team to help grow your business is challenging in any market and in ASEAN there are varied levels of education, relevant industry experience and language skills to consider. Plus, the complex regulatory environment that exists in some cases makes hiring knowledgeable, local consultants a necessity.

Some local markets and sectors also have strict restrictions and regulations on employing foreigners and this will inevitably impact your hiring strategy. Whether you’re planning to relocate staff, hire expats, hire foreign talent or hire locally, you’ll need to know the necessary procedures to onboard staff.

Working with local partners with ample expertise and experience is critical when entering a new market.

Partners that are experts at operating in your target market can provide everything from translation and localization services to efficient distribution of your products - even networking and referral opportunities.

Having access to experts who know the ins and outs of doing business in your target market will help streamline your company’s expansion into the diverse and evolving ASEAN markets.

Labor Environment in Brunei When recruiting and staffing in Brunei, it is helpful to take the following key points into consideration: •

•

Employers are required to give priority to employing Brunei nationals. Vacancies must be advertised on www.jobcentrebrunei.gov.bn. o After two weeks of advertisement, if there are no local applicants, the company can request for a Clearance Letter from the JobCentre and proceed with the application of a Foreign Worker License at the Department of Labour. o If there are local applicants, the company has 30 days to review applications and conduct recruitment process at the end of which, if there are no suitable local candidates, the company can proceed with obtaining the clearance letter and proceed with a Foreign Worker License.

Employers must note that: o The Brunei government is trying to reduce the country’s reliance on foreign workers and consequently Foreign Worker Licenses are only issued for short periods of time, which requires continual renewal.

56 Tricor Group

o

o

Approval for a Foreign Worker License will only be granted if employees are qualified, capable and genuinely demonstrate the suitable qualifications and skills.

The positions given to foreign workers are those that cannot be filled by locals, whether due to lack of qualifications, experience or interest.

Labor Environment in Indonesia The Ministry of Manpower and Transmigration (MOMT) oversees labor and employment. Labor Law No. 13 of 2003, Labor Law No. 11 / 2020 on job creation, and Government regulation No. 35 of 2021 form the legal basis of legislation governing labor.

Hiring in Brunei is generally considered burdensome, particularly in terms of the rules and regulations regarding termination of employees. Lack of training, cultural backgrounds and difficulty terminating nonperforming workers often mean that staff numbers can reach higher levels than a foreign company may initially anticipate.

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Key points that investors should be aware of when hiring in Indonesia: •

•

•

•

Employment of foreign workers over local workers is generally not encouraged and MOMT Regulation Nos. 12/2013, 20/2018 and 34/2021 states that a foreign candidate must meet several requirements: ○ Possess educational qualifications suitable for the intended position. ○ Possess competency certificates or work experience of at least five years for the intended position. ○ Sign an undertaking to transfer knowledge to the Indonesian counterpart. ○ Company has to help the foreign worker communicate in the Indonesian language.

Foreign workers must obtain a work permit through their sponsoring employer. Work permits are valid for a 12-month period and are extendable upon expiration subject to approval from the MOMT. Minimum monthly salaries must be adhered to, with each province or city given the power to frame its own Provincial Minimum Wage (known as UMP in Indonesia or UMK in Bali), which is reviewed and set annually.

According to Regulation 6/2016, employees with at least 12 months service are entitled to a Religious Festivity Allowance of an additional one month salary. Similarly, a pro-rata allowance will be given to employees who have been working consecutively for at least one month.

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•

Working hours are seven to eight hours per day, depending on whether a work week consists of five or six working days, with additional hours considered overtime. Overtime is calculated based on a legally abiding formula.

•

Indonesia has strict rules on terminating employees and an employer has an obligation to pay severance, gratuity and other compensation to permanent employees if they resign voluntarily or are involuntarily terminated. There must be strong grounds for termination and evidence of warning letters issued prior to the termination. In general, the minimum severance pay is based on one month’s salary or wages for each year of service up to a maximum of nine months of pay excluding rewards service.

•

It is mandatory for all employees (including foreign workers who have been working in Indonesia for more than six months) to contribute to the government’s social benefit schemes.

BPJS Ketenagakerjaan is the social security administration body and manages employment, social security and healthcare programs.

•

Trade union memberships are allowed, but not compulsory. Most Indonesian workers are not unionized, likely due to the generous severance and termination benefits already in place.

ASEAN Business Guide 2022 57

WHY ASEAN?

OVERVIEW OF ASEAN MARKETS

BUSINESS INCORPORATION

TAX CONSIDERATIONS

LABOR ENVIRONMENT

ASEAN: THE LEVER FOR CHINA’S REGIONAL PLANS

SINGAPORE: THE GATEWAY TO ASEAN

OPPORTUNITIES & CHALLENGES

CASE STUDIES

CLIENT TESTIMONIALS

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Labor Environment in Labuan The labor law framework of Malaysia applies in Labuan, but has been relaxed in many situations to enhance its International Business and Financial Center (IBFC) advantage. To facilitate offshore activities in Labuan, a relatively open immigration policy has been adopted.

Two-year multiple-entry visas are issued to expatriates who have been granted employment permits to work with offshore companies in Labuan.

Labuan is competitive in terms of education, thanks to an extensive network of public and private colleges that produce a skilled and highly educated workforce.

English is widely spoken, and many documents and publications are available in English. Labuan’s IBFC position has yielded a workforce that is, in addition to being diverse and international, also familiar with international business protocols.

When looking to hire in Labuan, investors should review Malaysia’s labor law framework and visa policies. Given Labuan’s special status as an IBFC within Malaysia, it is highly recommended that investors work with a local consulting partner to fully understand how laws will apply to hiring strategies in Labuan.

Labor Environment in Malaysia The employment contract is a key part of the regulatory landscape in Malaysia. Foreign investors should draft a contract in compliance with Malaysian labor laws so they can establish a firm foundation for human capital management.

Here are some key points about Malaysia’s labor environment: •

58 Tricor Group

The Employment Act 1955 governs employment matters in Malaysia and an employment contract is required for any employment exceeding one month. The contract should specify the fundamental terms of the employment relationship, which includes the location of the workplace, scope of work, salary/wage rates, wage period, working hours/days, annual leave, sick & hospitalization leave, holidays, benefits and matters relating to health and safety.

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•

Employers and employees have the right to terminate an employment contract. If the employment contract does not specify a mandatory notification period, then either party must provide an interval of notice corresponding with the level of service with the company.

•

An employer may terminate an employee without notice in the case of misconduct after due inquiry if the employee is found guilty of the offence.

The Employment Act does not comprehensively define what misconduct is. As such, employers should clarify what constitutes minor and major misconduct in the company's handbook or staff manual, and also outline the grievance process.

•

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•

In Malaysia, non-compete clauses are difficult to enforce as Section 28 of the Contracts Act 1950 states that any agreement in restraint of trade is void. However, employment contracts in Malaysia can and should include a clause to prohibit former employees from sharing confidential information they gained during employment as well as from interfering with their past employer’s business and/or employees.

•

Under the Annual Leave section 60E of the Malaysia Employment Act, employees are entitled to paid annual leave for every 12 months of continuous service with the same employer eight days if he has been employed for less than two years; 12 days if he has been employed for between two and five years, and 16 days if he has been employed for five years or more.59 Termination benefits are not applicable for employees outside the scope of the Employment Act 1955 and/or dismissed for misconduct, who retire or voluntarily resign.

In Malaysia, the minimum retirement age for employees is 60, as provided under the Minimum Retirement Age Act 2012 which came into effect on July 1, 2013. The retirement age should be stated in all employment contracts to avoid unnecessary employment disputes.

HOW TRICOR CAN HELP

Labor Environment in Singapore The Singapore Employment Act is the key legislation that outlines the basic terms and conditions of employment.

Keep in mind the following key points regarding the labor landscape in Singapore: •

•

The legal age to work in Singapore is 17 years and above. However, you are permitted to employ children and young persons aged 13 years to 16 years with restrictions on the type of work that children and young persons can perform.

There is no minimum wage. The wages are applicable according to the agreed terms between the employer and the employee.

•

The normal working hours of an employee are eight hours a day up to a maximum of 44 hours a week. Additionally, no employee should work consecutively for six hours a day without any break. An employer must confirm the hours of work in the employment contract. The work hours do not include break-time. This only applies to workers making less than S$2,500.

•

For overtime work, employers must compensate at least 1.5 times the hourly basic rate of pay.

Payment must be made within 14 days after the last day of the salary period.

ASEAN Business Guide 2022 59

WHY ASEAN?

OVERVIEW OF ASEAN MARKETS

•

BUSINESS INCORPORATION

TAX CONSIDERATIONS

LABOR ENVIRONMENT

ASEAN: THE LEVER FOR CHINA’S REGIONAL PLANS

Non-nationals who wish to reside and work in Singapore need to obtain a valid working pass.

An important point to note is that certain work passes place a restriction or ceiling on the number of foreign employees you can hire. All applications are assessed on a case-by-case basis. Preliminary assessment is based on the individual’s academic qualifications, experience, suitability for the job and the conditions of the employer’s sector.

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OPPORTUNITIES & CHALLENGES

CASE STUDIES

CLIENT TESTIMONIALS

•

While Singapore is well-known for having the 'World’s Best Professional Workforce', Singapore’s workforce also comprises a diverse mix of individuals in terms of ethnicity, age and gender. Employers are strongly advised to adopt progressive and fair HR practices, especially in matters relating to recruitment of talent. In this regard the Ministry of Manpower has issued certain guidelines on fair employment practices in 2006.

•

Minimum wages for foreign workers to be eligible for a work permit is from THB 20,000 to THB 50,000 per month, depending on nationality and type of work.

•

Hours worked must not exceed eight hours in one day or 48 hours in one week. There must be a minimum of 13 paid public or traditional holidays per year, in addition to the weekly holidays.

•

There is a mandatory requirement to make monthly contributions to: ○ Worker Compensation Fund: these contributions are assessed on the total wages paid and the type of business, with a rate of between 0.2% to 1.0% of the total wages paid by the company (for wage/salary not exceeding THB 20,000 per month for each employee). ○ Social Security Fund: the amount payable is 5% of an employee’s income, with a monthly maximum set at THB 750 for each employee.

•

All employees can join a trade union and all unions must be registered with the MOL. A trade union can be established with a minimum of 10 employees. Specialized labor courts have the authority to decide any dispute concerning employment contracts.

Labor Environment in Thailand The Ministry of Labor (MOL) is responsible for overseeing labor and employment. The Labor Protection Act is the legal framework that outlines the rights and obligations of employers and employees. Key points for consideration include: •

•

•

Employment of foreign workers is permitted upon approval from the MOL, and a work permit will then be issued. Approvals are dependent on: ○ The employer’s financial status: the minimum paid-up capital must be THB 2 million per one foreign employee. ○ The number of Thai employees hired (in the ratio of four Thai employees per foreign employee).

Alternatively, a company approved by the Board of Investment (BOI) may obtain a work permit for its foreign workers through the BOI One-Stop Service Channel. The issuance of a work permit in this situation is not dependent on the company’s Thai/ foreign employee ratio or paid-up capital, provided that the BOI’s requirement for foreign workers is met.

Minimum wages are applicable with daily rates currently set at THB 331 a day for Bangkok and its surrounding area, and THB 336 a day for several specific provinces.

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HOW TRICOR CAN HELP

WHY ASEAN?

OVERVIEW OF ASEAN MARKETS

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LABOR ENVIRONMENT

ASEAN: THE LEVER FOR CHINA’S REGIONAL PLANS

SINGAPORE: THE GATEWAY TO ASEAN

OPPORTUNITIES & CHALLENGES

CASE STUDIES

CLIENT TESTIMONIALS

HOW TRICOR CAN HELP

Labor Environment in Vietnam The Labor Code (2013) outlines the framework for labor law in Vietnam including the rights and obligations of employers and employees. Here are some key considerations to keep in mind:

•

Normal working hours should not exceed eight hours per day or 48 hours per week. Working extended hours must be mutually agreed upon and limited to 30 hours per month and 200 per year.

•

•

Minimum monthly salaries must be complied with, which vary by region.

•

According to MOLISA, Vietnam’s compulsory social, health & unemployment insurance (SIHIUI) applies to employment of Vietnamese citizens. Mandatory contribution rate is 32% of monthly salary (21.5% to be paid by the employer and 10.5% by the employee).

•

All companies with either Vietnamese or foreignowned capital should not forbid their employees to join a trade union. Companies are required to contribute 2% of total salary (subject to certain maximum thresholds) into a trade union fund.

•

Foreign companies, both representative offices and branches, must provide Vietnamese citizens with priority of employment over foreigners. In the event of employing foreigners, the maximum duration for the work permit is 24 months, though they can be extended subject to certain conditions.

Labor contracts must comply with certain minimum terms based on the Labor Code. Generally, the prescribed form published by the Ministry of Labor, War Invalids and Social Affairs (MOLISA) is used as a template. A contract must be signed by the legal representative of the employer or his/her authorized person before the employment begins.

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ASEAN: THE LEVER FOR CHINA’S REGIONAL PLANS

WHY ASEAN?

OVERVIEW OF ASEAN MARKETS

BUSINESS INCORPORATION

TAX CONSIDERATIONS

LABOR ENVIRONMENT

ASEAN: THE LEVER FOR CHINA’S REGIONAL PLANS

SINGAPORE: THE GATEWAY TO ASEAN

OPPORTUNITIES & CHALLENGES

CASE STUDIES

CLIENT TESTIMONIALS

HOW TRICOR CAN HELP

ASEAN: THE LEVER FOR MAINLAND CHINA’S REGIONAL PLANS Mainland China’s greatest challenges are in rebalancing its reliance on foreign investment, maintaining a labor-surplus workforce and responding to a shifting geopolitical landscape. Now that mainland China has reached the ranks of a middle-income country with the world’s largest consumer class, it will need to depend less on foreign investment and more on innovation and productivity growth.

At the same time, to avoid a detrimental shift from a labor-surplus to a labor-scarce society, mainland China will need to focus attention on its aging population and invest in programs that nurture a younger workforce.

More than ever, a strong social safety net, education and training programs will be important in helping the Chinese workforce keep up with the demands of the global economy. This may shift some attention from domestic manufacturing to other investments.

With this shift, manufacturers in mainland China may look to pivot from sourcing or producing goods domestically and turn to other markets. Thanks to rising costs in mainland China, trade tensions and pandemic disruptions, international manufacturers from the US have been diversifying some production away from mainland China for several years to ASEAN neighbors.

Like these other manufacturers, ASEAN countries will likely be a target destination for Chinese businesses looking for production and sourcing outside of mainland China.

Notably, mainland China’s ambitious economic development projects, such as Belt and Road Initiative and the Greater Bay Area, also require enhanced global interconnectivity and cooperation. ASEAN has already benefited from strong investment from mainland China in the last decade through both equity and non-equity modes such as international infrastructure contracts.

In some ASEAN member states (e.g. Cambodia and the Lao People’s Democratic Republic), FDI from mainland China has accounted for the largest source of investment for consecutive years.23 ASEAN’s total FDI from mainland China rose by 65% over the past decade, skyrocketing from an annual average of US$6.9 billion in 2011–2015 to an annual

64 Tricor Group

average of US$11.5 billion in the period of 2016– 2020. This amplified mainland China’s share in total FDI in ASEAN from 6.2% to 7.9%. Meanwhile, ASEAN accounted for only 5% of the global outward FDI stock of mainland China in 2019, up from 4.5% in 2010. Yet rising mainland Chinese investment in ASEAN pushed the region’s share of outflows from mainland China from an average of 5.5% in the 2009–2010 period to an average of 9% in the 2018–2019 period.

Within Asia Pacific, ASEAN already has distinguished itself as the largest target destination for mainland Chinese international infrastructure contracts. During the period of 2017–2019, approximately 22% of such contracts had to do with investments in ASEAN, accentuating the important role mainland Chinese multinational corporations (MNCs) are playing in ASEAN’s infrastructure development. Most of these contracts were in transportation, power / electricity and telecommunications, with many were unsurprisingly identified as related to China’s Belt and Road Initiative.

A Bright Spot for Mainland Chinese MNCs In the volatile times MNCs are facing in today’s business landscape, ASEAN remains a relative bright spot on the map and a guiding light for mainland Chinese investors searching for growth opportunities. Given its geographical proximity, a growing consumer class, advancing infrastructure and strengthened trade ties, ASEAN is expected to experience a surge in investments from mainland Chinese MNCs in upcoming decades and beyond.

Notably, ASEAN sits strategically at the confluence of major trade routes. These pathways facilitate the passage of US$5.3 trillion worth of global trade each year.60 As mainland China looks to sidestep ongoing global trade disruptions from the pandemic, as well as the impact of its ongoing trade conflict with the United States, ASEAN has established itself as a primary destination for mainland Chinese businesses looking to expand abroad. As a result, mainland Chinese investment in ASEAN countries could more than triple to reach US$500 billion by 2035.61

WHY ASEAN?

OVERVIEW OF ASEAN MARKETS

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ASEAN: THE LEVER FOR CHINA’S REGIONAL PLANS

SINGAPORE: THE GATEWAY TO ASEAN

OPPORTUNITIES & CHALLENGES

CASE STUDIES

CLIENT TESTIMONIALS

HOW TRICOR CAN HELP

“

While COVID-19 has ushered in a wave of trade protectionism around the globe, the RCEP envisions a pan-Asian trade network and embraces the belief that enhanced market openness promotes greater economic prosperity. One of the most promising features of the deal is that, for the first time ever, emerging economies in ASEAN are now linked to the developed powerhouse economies of China, Japan and South Korea through one inclusive trade agreement. The RCEP nearly ensures intra-Asian trade, which is already cumulatively larger than APAC’s trade with North America and Europe combined, will continue to serve as a growth engine for the global economy.

Wendy Wang Group CFO & COO Tricor Group

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SINGAPORE: THE GATEWAY TO ASEAN

ASEAN Business Guide 2022 66

ASEAN Business Guide 2022 67

WHY ASEAN?

OVERVIEW OF ASEAN MARKETS

BUSINESS INCORPORATION

TAX CONSIDERATIONS

LABOR ENVIRONMENT

ASEAN: THE LEVER FOR CHINA’S REGIONAL PLANS

SINGAPORE: THE CATEWAT TO ASEAN

OPPORTUNITIES & CHALLENGES

CASE STUDIES

CLIENT TESTIMONIALS

HOW TRICOR CAN HELP

SINGAPORE: THE GATEWAY TO ASEAN Singapore: The Gateway to ASEAN for MNCs The Asia Development Bank has called ASEAN a 'borderless economic community'62, a reputation that will likely be known on the global stage now that the RCEP has been signed and implemented.

As MNCs flock to tap into ASEAN’s success, they will need a launchpad for expansion, operation and investment. Singapore, one of the founding members of ASEAN, has long earned high marks from global investors for its economic stability and business friendly environment. These favorable conditions make

Singapore a strategic gateway for mainland MNCs from around the globe wishing to set up shop or strengthen their market position in the ASEAN region.

Already a hotspot for MNC headquarters, we anticipate Singapore to grow even more in popularity as a launchpad for global business expansion in ASEAN. FDI flows in the past decade show the city-state's dominance in capturing investment from foreign interests:

Foreign Direct Investment (FDI) Inward Flows to ASEAN, 2011-20208

Brunei

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Cambodia

Indonesia

Laos

Malaysia

Myanmar

Philippines

Singapore

Thailand

Vietnam

WHY ASEAN?

OVERVIEW OF ASEAN MARKETS

BUSINESS INCORPORATION

TAX CONSIDERATIONS

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ASEAN: THE LEVER FOR CHINA’S REGIONAL PLANS

SINGAPORE: THE CATEWAT TO ASEAN

OPPORTUNITIES & CHALLENGES

CASE STUDIES

CLIENT TESTIMONIALS

HOW TRICOR CAN HELP

Singapore at a Glance63

5.70m

364.2bn GDP (US$)

GDP Growth Rate

Singapore Dollar ($)

Apr 1 Mar 31

World's fastest approval for artificial intelligence patents

>150

2nd

Population

Fiscal Year

3.1%

SGD

venture capital funds, incubators and acceleratos

25

Free Trade Agreements globally

most globally connected country

100%

Tax deduction for qualifying expenditure for eligible R&D activites

Why Start Up a Business in Singapore?63

One of the World's Easiest Places to Do Business

Asia's Most Competitive Economy

Southeast Asia & Oceania's Most Innovative Country

The following key attributes make Singapore the 'Gateway to ASEAN' for MNCs from mainland China: Open for Global Trade Singapore’s role as an enthusiastic trade partner and leading signatory in the ASEAN region has been welldocumented throughout the decades. The Common Effective Preferential Tariff (CEPT) scheme, Singapore’s first free trade agreement (FTA), was ratified in 1992 to relax duties and customs costs on inter-ASEAN imports.

Known as the ASEAN Free Trade Agreement (AFTA), this opened the door for companies to set up shop in Singapore and trade freely with other ASEAN markets.

Since that landmark passage, Singapore has entered into a series of bilateral FTAs with key trade partners, including mainland China, US, Australia, Japan, New Zealand and more.60 Over time, these FTAs have eased market entry into Singapore and made market presence possible for products and services from signatory countries. When the US-Singapore Free Trade Agreement (USSFTA) came into effect in 2004, US exports of goods to Singapore surged by 49% from US$16.6 billion in 2003 to US$24.7 billion in 2006.64 As a leading member of ASEAN, Singapore has also served as the regional signatory to the establishment of 10 regional free trade areas, including ASEAN-

Australia-New Zealand, ASEAN-China and ASEANIndia. Singapore’s appetite for free trade continues having signed three globally significant FTAs, namely the RCEP, European Union-Singapore Free Trade Agreement (EUSFTA) and the CPTPP. Notably, the EUSTFA is the EU’s first bilateral FTA with an ASEAN member nation and is aimed at facilitating greater market access, offering more investment protection and removing non-tariff barriers for European companies to trade in the ASEAN region.65 The Singapore Economy 2030 vision was unveiled by the Ministry of Trade and Industry (MTI) in March of 2022, outlining a plan for long-term, sustainable growth through the year 2030. Notably, the plan identifies economic targets for professional services, manufacturing, trade and enterprises. The plan is likely to raise Singapore’s global trade footprint. For example, as part of the 2030 vision, MTI has targeted to raise Singapore's export value from S$805 billion in 2020 to at least S$1 trillion by 2030, while doubling offshore trade value to US$2 trillion. Furthermore, the master plan lays out new initiatives under Singapore's Manufacturing 2030 strategy, which was announced in 2021 and aims to increase manufacturing value-add by 50%.

ASEAN Business Guide 2022 69

WHY ASEAN?

OVERVIEW OF ASEAN MARKETS

BUSINESS INCORPORATION

TAX CONSIDERATIONS

LABOR ENVIRONMENT

ASEAN: THE LEVER FOR CHINA’S REGIONAL PLANS

SINGAPORE: THE CATEWAT TO ASEAN

OPPORTUNITIES & CHALLENGES

CASE STUDIES

CLIENT TESTIMONIALS

HOW TRICOR CAN HELP

Sophisticated Supply Chains, Manufacturing & Innovation Unquestionably, the RCEP ushers in a transformative opportunity for Singapore’s supply chain ecosystem, critically linking the city-state to heavyweight markets in mainland China, Japan and South Korea.

Owing to Singapore’s free port status, local firms will now gain greater market access and be able to seize more commercial activity opportunities in RCEP markets. But there are other unique opportunities for Singapore built into the agreement. With the RCEP extending new protections to intellectual property (IP), Singapore’s reputation as a high-end manufacturer stands firmly intact. In particular, the IP safeguards are expected to be of particular benefit to the electronics, precision engineering and aerospace manufacturing industries.

70 Tricor Group

Apart from introducing new IP protections, RCEP will also catalyze crucial domestic regulatory reforms across ASEAN in key areas such as labor law, cybersecurity, investment liberalization and data protection. As supply chain dynamics change globally and global companies continue to balance costs and risks, these reforms will serve as important selling points for FDI and global supply chain activity through ASEAN. Singapore is already well ahead of other ASEAN member states in these areas – so its current framework will likely serve as a guiding baseline for these reforms throughout ASEAN. MNCs choosing Singapore as a destination for investment and expansion will enjoy the comfort, ease and transparency of these reforms from day one, and consequently, will be more agile in expanding throughout ASEAN.

WHY ASEAN?

OVERVIEW OF ASEAN MARKETS

BUSINESS INCORPORATION

TAX CONSIDERATIONS

LABOR ENVIRONMENT

ASEAN: THE LEVER FOR CHINA’S REGIONAL PLANS

SINGAPORE: THE CATEWAT TO ASEAN

OPPORTUNITIES & CHALLENGES

CASE STUDIES

CLIENT TESTIMONIALS

HOW TRICOR CAN HELP

Tax Incentives Abound For MNCs, the first five years in a new market are critical for growth and success. Typically, tax burdens can slow down the pace of growth. Sometimes, taxation can cause a global expansion to ultimately fail.

With large profit margins and specialized compliance requirements, MNCs are particularly hard hit by tax burdens when they open operations and expand into a new country. But in Singapore, this is generally less of a problem than elsewhere. Not only does it have one of the lowest corporate tax rates in ASEAN (17%), the city-state offers an array of tax incentives and grants to further reduce companies’ tax burdens.66 Moreover, Singapore has established a strong double taxation agreement (DTA) footprint67 with many other countries. Essentially, a DTA reduces or eliminates the need for double taxation in Singapore and the MNC's parent country. This could potentially offer even more tax savings to MNCs in Singapore.

Top Talent Pools Singapore’s workforce may be relatively small compared to other ASEAN member states, but it is one of the most highly-skilled, developed and diversified workforces in Asia. Singapore recently ranked in second place in how well countries around the globe attract, develop, support and retain talent, according to the 2021 Global Talent Competitiveness Index (GTCI) report which is published annually by Institut Européen d'Administration des Affaires (INSEAD) and Portulans Institute.68 The Singapore government is also becoming increasingly proactive in keeping its workforce current and abundant in the skills needed for various job functions. For example, Smart Nation Singapore69, which homes in on digital upskilling, gives MNCs access to new digital technologies and makes it easier for them to hire locals who have future-ready capabilities.

Furthermore, there are several types of employment visas available to foreign professionals. These visas are also more abundant and available in Singapore when compared to other ASEAN nations, empowering MNCs in Singapore to hire top talent from their parent country or anywhere around the globe.

ASEAN Business Guide 2022 71

08

OPPORTUNITIES & CHALLENGES

WHY ASEAN?

OVERVIEW OF ASEAN MARKETS

BUSINESS INCORPORATION

TAX CONSIDERATIONS

LABOR ENVIRONMENT

ASEAN: THE LEVER FOR CHINA’S REGIONAL PLANS

SINGAPORE: THE GATEWAY TO ASEAN

OPPORTUNITIES & CHALLENGES

CASE STUDIES

CLIENT TESTIMONIALS

SEIZING OPPORTUNITIES & OVERCOMING CHALLENGES IN ASEAN While the ASEAN markets offer tremendous opportunity, any business entering these unique, complex economies should be aware of the potential difficulties, missteps and obstacles along the way. When making moves into ASEAN, investors should consider the following:

•

Developing a strategy for entering an individual ASEAN market or multiple markets

•

Overcoming language and cultural barriers

•

Understanding the government’s role in business as this varies across the markets

•

Registering your business and furnishing the required upfront capital, documentation, resources and personnel for the selected business structure

•

Complying with labor, payroll and hiring policies

•

Navigating visa requirements

•

Filing taxes and learning regulations

•

Maximizing incentives, deductions and tax strategy

•

Opening up banking facilities

•

Knowing what to look for in local partners and investors

•

Streamlining operations

74 Tricor Group

“

Headlines of the past two years have been dominated by one omnipresent story: COVID-19. Few could have anticipated the distress and ubiquitous disruption the pandemic would present to economies and businesses around the world. But Tricor Group’s recent experiences on-theground suggest that, despite roadblocks and looming uncertainties ahead, emerging opportunities abound for global businesses. In particular, recently passed economic policies and the activation of the RCEP are opening new doors in ASEAN. By highlighting these emerging prospects and prescribing possible steps forward, Tricor’s ASEAN Business Guide can help business leaders and investors stay ahead of the curve in today’s shifting landscape.

Sunshine Farzan Group Head of Marketing & Communications Tricor Group

HOW TRICOR CAN HELP

WHY ASEAN?

OVERVIEW OF ASEAN MARKETS

BUSINESS TAX INCORPORATION CONSIDERATIONS

LABOR ENVIRONMENT

ASEAN: THE LEVER OPPORTUNITIES & CHALLENGES FOR CHINA’S REGIONAL PLANS

CASE STUDIES

CLIENT TESTIMONIALS

HOW TRICOR CAN HELP

ASEAN Business Guide 2022 75

09

CASE STUDIES

WHY ASEAN?

OVERVIEW OF ASEAN MARKETS

BUSINESS INCORPORATION

TAX CONSIDERATIONS

LABOR ENVIRONMENT

ASEAN: THE LEVER FOR CHINA’S REGIONAL PLANS

SINGAPORE: THE GATEWAY TO ASEAN

OPPORTUNITIES & CHALLENGES

CASE STUDIES

CLIENT TESTIMONIALS

CASE STUDIES: HELPING CLIENTS BUILD & EXPAND IN ASEAN Client

78 Tricor Group

Challenge

Solution

Benefits

The client was facing multiple challenges regarding local regulatory and compliance requirements at the start-up stage of its business expansion across ASEAN.

Tricor provided the client with a one-stop shop solution, including payroll, accounting, taxation and company incorporation.

Client was able to seek Tricor’s support at any time, trusting Tricor to solve urgent needs in an efficient and timely manner.

The client was experiencing difficulty staying up-to-date with their accounting obligations, and was looking for a trustworthy and responsible service provider to handle all accounting services in Malaysia.

Tricor provided tailored professional accounting services to match the client’s specific needs and helped them ensure efficiency and stability during the process, as well as to avoid major financial issues and challenges.

The client was able to focus on its core business activities while Tricor took excellent care of its accounting, tax, secretarial and compliance functions.

Gleneagles required help keeping up to date with changes to statutory requirements.

Tricor was able to offer extensive knowledge and practical solutions with regard to corporate and statutory compliance.

All processes were managed efficiently and all requirements were met with ease.

Client was challenged with the management of HR & Payroll, as well as maintaining compliance with government regulations.

Tricor provided a comprehensive HRM Solution with key support across data analytics and payroll outsourcing.

Improved HR efficiency through a significant reduction in manpower demand. Ensured compliance with government regulations and requirements.

HOW TRICOR CAN HELP

WHY ASEAN?

OVERVIEW OF ASEAN MARKETS

BUSINESS INCORPORATION

Client

TAX CONSIDERATIONS

LABOR ENVIRONMENT

ASEAN: THE LEVER FOR CHINA’S REGIONAL PLANS

Challenge

SINGAPORE: THE GATEWAY TO ASEAN

OPPORTUNITIES & CHALLENGES

Solution

CASE STUDIES

CLIENT TESTIMONIALS

Benefits

Q8 Aviation required a one-stop business partner to handle all of its back office and compliance functions, so that they could focus on what they do best – their business.

Tricor Thailand provided Q8 Aviation with a cost-effective full suite of services, including accounting and reporting, tax compliance and advisory, corporate secretarial services, corporate advisory, fund management and access to Tricor’s team of skilled professionals.

Tricor helped streamline Q8 Aviation’s business operations with effective cost saving.

Tricor also optimized Q8 Aviation’s VAT tax refund from Thailand’s Revenue Department, provided corporate advisory services for its corporate restructuring and successfully secured Bank of Thailand approval for certain financial transactions.

Shangri-La manages 9 properties in Malaysia including hotels and resorts, where it employs 5,000+ individuals.

With a large and stillgrowing organization, the company’s human resources department sought to streamline its workflow in order to improve efficiency, as well as enhance service delivery to constituents. The group utilized different payroll systems across its various properties, often resulting in bottlenecks and delays in processing which required manual efforts to resolve.

Given the need for a better way to manage payroll, Shangri-La explored different options and decided to migrate its system to Tricor’s unify | HRS. It also utilizes Tricor’s HR analytics platform to make data-driven decisions on a variety of HR matters.

After migrating its payroll solution to Tricor’s unify | HRS solution, Shangri-La gained a single standardized solution that covered the different properties that it managed. The ease of data consolidation means that finance and HR managers are able to generate and access reports in a timely manner, thus making significantly betterinformed decisions.

Shangri-La is assured that the solution is compliant with strict government regulatory standards, and that it is compatible with external ledger accounting systems to ensure a good interface with other platforms. The solution is also compatible with other jurisdictions in the region, as Tricor is able to quickly adopt the solution to meet the financial and regulatory requirements across ASEAN.

HOW TRICOR CAN HELP

ASEAN Business Guide 2022 79

WHY ASEAN?

OVERVIEW OF ASEAN MARKETS

BUSINESS INCORPORATION

Client

80 Tricor Group

TAX CONSIDERATIONS

LABOR ENVIRONMENT

ASEAN: THE LEVER FOR CHINA’S REGIONAL PLANS

SINGAPORE: THE GATEWAY TO ASEAN

OPPORTUNITIES & CHALLENGES

CASE STUDIES

CLIENT TESTIMONIALS

Challenge

Solution

Benefits

Royal Brunei Airlines were seeking a trusted partner to deliver greater security for their confidential payroll data.

Challenges included a short implementation time as well as specific requirements, such as the customization of payslips.

HRMNet - Tricor managed the computation of salaries and timely arrangement of payment, with electronic payment advice delivered to each employee.

Tricor delivered payrollenabled seamless management and processing, meeting all local requirements and handling the client’s payroll functions securely and with ease.

Yamako Pacific was in need of guidance from a professional team dedicated to providing efficient support and administration in the handling of all corporate secretarial matters.

Tricor provided corporate secretarial services to Yamako Pacific enabling them to expand and grow its business in Brunei.

Yamako Pacific’s administration matters were handled efficiently.

Tricor’s expert team provided professional knowledge that helped ensure Yamako Pacific was compliant with all local legislation and regulations.

HOW TRICOR CAN HELP

10

CLIENT TESTIMONIALS

WHY ASEAN?

OVERVIEW OF ASEAN MARKETS

BUSINESS INCORPORATION

TAX CONSIDERATIONS

LABOR ENVIRONMENT

ASEAN: THE LEVER FOR CHINA’S REGIONAL PLANS

SINGAPORE: THE GATEWAY TO ASEAN

OPPORTUNITIES & CHALLENGES

CASE STUDIES

CLIENT TESTIMONIALS

“

Tricor has been our service provider for many years and we have a very close working relationship. They provide us with expert advice in relation to our accounts, tax, secretarial and compliance. The team at Tricor are very professional, and are always able to give us clear advice and guidance in a prompt and efficient manner.”

Director, Malaysia AREA Management Sdn Bhd

“

While it previously took several days for our Regional office to consolidate and email Payroll/HR reports, now it only takes a few minutes to log in to the system to generate and analyze reports on all properties.”

Jason Tan Payroll Manager, Malaysia Shangri-La Kuala Lumpur

82 Tricor Group

“

We are very pleased with the customer service and technical support provided to us by Tricor’s fantastic customer care team. The prompt response and support especially during critical times such as salary payout are exceptional.

The regular information and patch updates also ensure we are fully compliant with government regulations.”

Azminuddin Bin Hohamad General Manager, Malaysia Honda Malaysia

“

With their experienced and reliable team and range of wider support and business advisory services, we know we found the right professional services partner with Tricor.”

Director, Brunei Yamako Pacific (B) Sdn Bhd

CLIENT TESTIMONIALS

HOW TRICOR CAN HELP

WHY ASEAN?

OVERVIEW OF ASEAN MARKETS

BUSINESS INCORPORATION

“

We can ask the Tricor team questions at any time, and we always get prompt, clear and thoughtful guidance.”

CEO, Brunei Gleneagles JPMC Sdn Bhd

TAX CONSIDERATIONS

LABOR ENVIRONMENT

ASEAN: THE LEVER FOR CHINA’S REGIONAL PLANS

SINGAPORE: THE GATEWAY TO ASEAN

“

Tricor is very reliable and very responsive.

We trust Tricor!”

Finance Director, Asia Aspen Asia Company Limited

OPPORTUNITIES & CHALLENGES

CASE STUDIES

CLIENT TESTIMONIALS

HOW TRICOR CAN HELP

“

We are satisfied with our partnership with Tricor, as well as the services that Tricor provides to us.”

Chief People & Performance Officer, Brunei Royal Brunei Airlines Sdn Bhd

ASEAN Business Guide 2022 83

10

HOW TRICOR CAN HELP

WHY ASEAN?

OVERVIEW OF ASEAN MARKETS

BUSINESS INCORPORATION

TAX CONSIDERATIONS

LABOR ENVIRONMENT

ASEAN: THE LEVER FOR CHINA’S REGIONAL PLANS

SINGAPORE: THE GATEWAY TO ASEAN

OPPORTUNITIES & CHALLENGES

CASE STUDIES

CLIENT TESTIMONIALS

HOW TRICOR CAN HELP

HOW TRICOR GROUP CAN HELP IN ASEAN Making that first step into any of the markets in ASEAN is intimidating for most companies and investors, with an almost endless series of potential pitfalls to be negotiated along the way. Despite regulatory obstacles and cultural barriers, the rewards of successfully navigating this vibrant region are immense. Whether you are looking to set up shop in ASEAN or streamline and expand your current operations, Tricor can help you.

Tricor Group (Tricor) is Asia’s leading business expansion specialist, with global knowledge and local expertise in business, corporate, investor, human resources & payroll, corporate trust & debt services, and governance advisory. Tricor provides the building blocks for clients’ business growth, from incorporation to IPO. Tricor has had a rapid expansion through organic growth and development as well as partnerships, mergers and acquisitions. Tricor has a dominant footprint in Asia Pacific and a strong global presence.

Strategically headquartered in Hong Kong SAR, we operate out of 22 countries/territories and across a network of 49 offices. Tricor serves ~50,000 clients

globally, including ~20,000 clients in Mainland China, and ~2,000 companies listed in Hong Kong SAR, Mainland China, Singapore and Malaysia. Over 40% of the Fortune Global 500 companies and a significant share of multinationals and private enterprises trust us to guide and streamline their operations across international markets. With ~3,000 employees, of which 630 are certified professionals, including qualified accountants and company secretaries, our expert teams deliver critical tax, accounting, finance, business advisory, human capital management, and compliance services through each phase of the business life cycle to help ambitious companies accelerate their growth in Asia and beyond.

Tricor’s advantage comes from deep industry experience, committed staff, technology-driven processes, standardized methodologies, constant attention to changes in laws and regulations and wide industry contacts. Tricor is uniquely positioned to unlock the potential of your business, and help you stay one step ahead of today’s diverse and fast evolving regulatory environment.

Tricor is uniquely positioned to unlock the potential of your business, and help you stay one step ahead of today’s diverse and fast evolving regulatory environment.

86 Tricor Group

WHY ASEAN?

OVERVIEW OF ASEAN MARKETS

BUSINESS INCORPORATION

TAX CONSIDERATIONS

LABOR ENVIRONMENT

ASEAN: THE LEVER FOR CHINA’S REGIONAL PLANS

SINGAPORE: THE GATEWAY TO ASEAN

OPPORTUNITIES & CHALLENGES

CASE STUDIES

CLIENT TESTIMONIALS

HOW TRICOR CAN HELP

GLOBAL FOOTPRINT & OFFICE LOCATIONS HONG KONG SAR (HEAD OFFICE) 15/F, Manulife Place 348 Kwun Tong Road Kowloon, Hong Kong Tel: (852) 2980 1888 Fax: (852) 2861 0285 info@hk.tricorglobal.com MAINLAND CHINA Beijing 18/F, Tower 1, Prosper Center No.5 Guanghua Road, Chaoyang District Beijing 100020, China Tel: (86) 10 8587 6818 Fax: (86) 10 8587 6811 communication.china@cn.tricorglobal. com Shanghai 19/F, Shanghai Central Plaza 381 Huai Hai Zhong Road Shanghai 200020, China Tel: (86) 21 6391 6893 Fax: (86) 21 6391 6896 communication.china@cn.tricorglobal. com

INDONESIA

SINGAPORE

19/F, Intiland Tower Jl. Jenderal Sudirman Kav. 32 Jakarta 10220, Indonesia

80 Robinson Road, #02-00 Singapore 068898

Tel: (62) 21 579 56788 contact@id.tricorglobal.com

Tel: (65) 6236 3333 Fax: (65) 6236 4399 info@sg.tricorglobal.com

JAPAN

VIETNAM

Oak Minami Azabu Building, 2F 3-19-23, Minami Azabu, Minato-ku Tokyo 106-0047, Japan

Level 1, IMM Group Building 99 Nguyen Dinh Chieu Street Ward 6, District 3 Ho Chi Minh City, Vietnam

Tel: (81) 3 4580 2700 Fax: (81) 3 4580 2701 info@jp.tricorglobal.com

Tel: (84) 286 289 8887 contact@vn.tricorglobal.com

MALAYSIA Unit 30-01, Level 30, Tower A Vertical Business Suite Avenue 3, Bangsar South No. 8 Jalan Kerinchi 59200 Kuala Lumpur, Malaysia Tel: (60) 3 2783 9191 Fax: (60) 3 2783 9111 info@my.tricorglobal.com

Please scan to visit our website: www.tricorglobal.com

OTHER OFFICES AUSTRALIA info@au.tricorglobal.com

IRELAND info@ie.tricorglobal.com

THAILAND info@th.tricorglobal.com

BARBADOS info@bb.tricorglobal.com

LABUAN info@my.tricorglobal.com

UNITED KINGDOM info@uk.tricorglobal.com

BRITISH VIRGIN ISLANDS info@bvi.tricorglobal.com

MACAU SAR tricor@macau.ctm.net

UNITED STATES info@us.tricorglobal.com

BRUNEI info@bn.tricorglobal.com

NEW ZEALAND info@nz.tricorglobal.com

CAYMAN ISLANDS info@ky.tricorglobal.com

SOUTH KOREA info@kr.tricorglobal.com

INDIA info@in.tricorglobal.com

TAIWAN, CHINA info@tw.tricorglobal.com

ASEAN Business Guide 2022 87

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ABOUT TRICOR GROUP Tricor Group (Tricor) is Asia’s leading business expansion specialist, with global knowledge and local expertise in business, corporate, investor, human resources & payroll, corporate trust & debt services, and governance advisory. Tricor provides the building blocks for clients’ business growth, from incorporation to IPO. Tricor has had a rapid expansion through organic growth and development as well as partnerships, mergers and acquisitions. The Group today has ~50,000 clients globally (including ~20,000 clients in Mainland China), a staff strength of ~3,000 and a network of offices in 49 cities across 22 countries / territories. Our client portfolio includes ~2,000 listed companies in Hong Kong SAR, Mainland China, Singapore and Malaysia, and more than 40% of the Fortune Global 500 companies, as well as a significant share of multinationals and private enterprises operating across international markets.

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