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ASEAN in Focus: Economic Outlook,
Insights & Opportunities

ASEAN in Focus: Economic Outlook, Insights & Opportunities

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 special report. 

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.

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. 

With Tricor Group’s ASEAN in Focus: Economic Outlook, Insights & Opportunities, we hope to briefly introduce each market and provide inspiration for tapping into bourgeoning opportunities.

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ASEAN has been traveling on a remarkable 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%. With a combined gross domestic product (GDP) of almost US$3.2 trillion in 2019, ASEAN collectively is ranked as the third largest regional economy in Asia and the fifth largest economy in the world.

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. The International Monetary Fund projects that ASEAN’s economy will grow 5.6% in 2022 and 6.0% in 2023, outpacing the projected growth of global GDP.

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.
Business-Registration-Fees 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.
For ASEAN, the RCEP could serve as a counterweight to the emerging trade protectionism that has accelerated 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 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.
SME-Financing-Guarantee-Scheme Business Incorporation
Tricor Group Commits to Responsible Business Framework with the Release of Its Inaugural 20202021 Environmental
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. 
Tax advisory icon-1 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 for the business.
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.
img-about-collaboration-icon Labor Environment
Prioritizing People in the Digital Age
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.
icon-incorporation ASEAN: The Lever for Mainland China's Regional Plans
Beijing, China cityscape at the CBD.-357948-edited
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.
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.
icon-flexibility Singapore: The Gateway to ASEAN for MNCs

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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. 

icon-operational-transactions 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.
  • 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
  • and more...


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.

Download our guide and arrange a meeting with one of our specialists to learn how Tricor’s global knowledge and local expertise helps organizations looking to expand their footprint into or across ASEAN, and beyond.

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