Updated: Jun 2, 2021
Viet Thai Consulting Group
Div of Emu Plastics Canada Inc.
So you are now looking at SE Asia. With the last few years of US / China tension it is time to look outside of China. Southeast Asia is and has been for the last few years a significant emerging economy. Multinationals and investors are turning to the region with increasing investments. There is massive potential in the region as a manufacturing and export hub for your business. There are however some things you need to consider. There is an advantage from lower cost labour vs. China, easy access to ports and airports and there is increasing spending power of the middle class with a very significant population of Southeast Asia, which is about 674 million (2021).
The plus side is low cost labour, a large and stable workforce, easy access to ports, low cost resources such as electricity and some raw materials. That is great however there are and there will continue to be “surprises”. For many of our western companies and management staff who are used to reasonably straightforward legal and business practices in Canada, the USA, the UK, Australia and Singapore, doing business in Southeast Asia is going to be quite different and can derail the best of plans.
The first and one item we cannot say enough about is that the Asean group of countries is comprised of ten (10) member states. All of these have distinct languages, rules for foreign investments, etc. and you must be prepared to deal with different regional and local laws, intellectual property rights, employment laws, dispute/legal systems etc. There is also, depending on country and industry a significant risk of corruption and bribery. SE Asia is not all the same, as dealing in Europe is not all the same. Similarities exist but there are always those surprises which in business can affect our bottom lines dramatically.
The investment in countries varies. In countries such as Cambodia, Vietnam and the Philippines there are restrictions on foreign direct investment (FDI). These countries require international firms to have local partners as well as local shareholders. You will also encounter trade sanctions and intercountry trade restrictions which, although there is a recent ASEAN trade agreement, still has many “bumps in the road” to allow free and easy movement of goods and more importantly people and talent between countries.
Talk to us. The Viet Thai Consulting Group has local talent and western talent with staff from Europe and Americas as well as local staff with international experience. We can help navigate the path to ASEAN and assist you to
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