With a positive economic outlook, ASEAN is supported by the continued expansion of domestic demand in a number of large Southeast Asian economies where FDI (Foreign Direct Investment) inflows are also expected to remain strong, as multinational companies continue to diversify their manufacturing supply chains towards Southeast Asian industrialized nations.

MARKET AT A SNAPSHOT:

● ASEAN stands for Association of Southeast Asian Nations comprising 10 countries: Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam

● 10 economies that together represent a market with a GDP of $3.6 trillion (2022), and a population of 670 million

● An economic powerhouse, ASEAN is currently the 3rd largest economy in Asia (after China and Japan), and the 5th largest in the world

● forecast to be the world’s 4th largest economy by 2030

● 5 ASEAN members are in the Trillion Dollar Club of world’s major economies with a GDP of more than $1 trillion dollar: Indonesia ($4.3 trillion), Thailand ($1.6 trillion), Philippines ($1.2 trillion), Vietnam ($1.4 trillion), and Malaysia ($1.2 trillion)

● Singapore, with a GDP of $750 billion, is the leading business hub in ASEAN and #2 in the 2023 Top 10 Index of Prominent Global Cities, right after Miami #1 and ahead of Dubai #3

● ASEAN has 5 FTAs (Free Trade Agreements) in place with Australia & New Zealand, China, India, South Korea, and Japan, and a member of the RCEP agreement (Regional Comprehensive Economic Partnership) along with Australia, China, Japan, New Zealand, and South Korea

● Singapore, and Kuala Lumpur, Malaysia are the 2 most effective gateways for entering the ASEAN marketplace and from where managing business/trade/investments by setting up a Regional HQ

● In particular, Singapore offers attractive Corporate Tax based on annual taxable income and taxed as follows for newly incorporated companies: 4.25% (0>S$100,000), 8.5% ($100,001>S$200,000), 17% (S$200,001 and above) along with tax incentive for new Start Up companies for the first 3 years

FDI: FOREIGN DIRECT INVESTMENTS

With an inflow of FDI of $224 billion in 2022, the ASEAN marketplace recorded an all-time high, and it is noteworthy to affirm that ASEAN keeps remaining resilient and positioned as a top FDI recipient given the current shifting global geo-economical scenario.

In particular, among the key drivers of these strong investment trends, a robust growth in manufacturing investment, and increased interest in sectors related to energy transition, digital economy, wholesale and retail trade, are.

The USA, with its FDI stock at $359.9 billion in 2022, reconfirms its solid rank as the #1 investor in the ASEAN marketplace .

But Intra-ASEAN FDI provides room for further extension marking its position as the #2 largest source of FDI at $28 billion in 2022.

M&A: MERGERS

& ACQUISITIONS

933 M&A deals were inked in the ASEAN marketplace in 2023 for a total combined worth of $90.6 billion.

With an upward trajectory forecasted for 2024, Singapore emerges as the #1resource of deals with 353 M&A, followed by #2 Indonesia with 165, #3 Vietnam with 122, #3 Malaysia with 113, #4 Philippines with 87, #5 Thailand with 79

, with M&A deals eyeing the ASEAN marketplace capitalizing on expanding markets like Indonesia, Malaysia, Thailand, and Vietnam, and shifting deal trends to the region following challenging geo-political factors.

Among the many industries, majority of M&A deals are signed in the following sectors: Renewable Energy, Healthcare & Pharmaceuticals, Technology, Retail

TRADE: EXPORT & IMPORT

U.S. goods and services trade with ASEAN totaled $520.3 billion in 2022. Exports to ASEAN were $160.2 billion while Imports from ASEAN were $360.1 billion.

The U.S.-ASEAN relationship is a partnership for prosperity, creating jobs on both sides of the Pacific.

More than 6,200 U.S. companies operate across ASEAN's member states, employing nearly 1 million people, and all 50 U.S. states export to ASEAN, supporting more than 625,000 U.S.

E.U. goods and services trade with ASEAN totaled $295.2 billion in 2022

Electronics is a major component of the total value of ASEAN exports because high quantities of the world’s consumer electronics like televisions, radios, computers, and cellular phones come from the ASEAN region. For instance, more than 80% of the world’s hard drives are made in ASEAN.

Malaysia’s electronics industry has invested in research and development and explored outsourcing of non-core activities domestically as part of efforts to move up the value chain.

Thailand is one of the largest electronics assembly bases within ASEAN with over 2,300 companies.

Philippines’ key products of hard drives and semiconductors supply the world with 2.5 million hard drives per month capturing 10% of the semiconductor manufacturing services global supply.

Vietnam’s key export is electronics with phones, accessories, computers and electronic products totaling $113.53 billion in 2023 or 32% of the total value of exports.

ASEAN - ASSOCIATION OF SOUTHEAST NATIONS

The ASEAN Economic Community envisions ASEAN as a single market and production base.

Free flow of goods, services, investments, capital, and labor will allow the development of production networks in the region and enhance ASEAN's capacity as the Global Supply chain.

Indeed Southeast Asia, and the ASEAN marketplace is emerging stronger than ever.

Trade agreements and partnerships among the 10 member states of the ASEAN continue to boost growth turning the economic union as the 5th largest economy globally, and a growing hub of highly educated and young entrepreneurial talent

Global investors are eyeing ASEAN for investing in manufacturing and distribution capabilities.

ASEAN is perceived as a safe region where countries enjoy a constantly growing GDP and rely on a geo-strategic position of global relevance that attracts economic, political, and military interests.

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