Doing Business with ASEAN

“Doing Business with ASEAN”

H.E. Mr. Chutintorn Gongsakdi, Ambassador of Thailand to India, attended the Conference on “Doing Business with ASEAN” on 11 April 2018 at PHD House, New Delhi, organised by the PHD Chamber of Commerce and Industry. The main objective of the Conference to discuss about the opportunities for deepening trade and investment ties between India and the ten Association of Southeast Asian Nations (ASEAN) along with identifying sector-specific opportunities, sharing incentives/ schemes offered by the Government of India and connecting with the diplomats of ASEAN countries and Indian businessmen. The Keynote address of the session was delivered by the Hon’ble Excellencies, Mr. Moe Kyaw Aung, Ambassador of Myanmar to India, Mr. Ton Sinh Thanh, Ambassador of the Socialist Republic of Viet Nam to India, and Mr. Chutintorn Gongsakdi, Ambassador of Thailand to India.

Capacity of ASEAN

ASEAN has a total area of 4.5 million square kilometres, with a population of over 634 million people. ASEAN and India have a combined population of 1.8 billion people, with a combined GDP at over USD 3.8 trillion. ASEAN alone has a GDP of US$ 2400 billion. ASEAN FTA has reduced 90% of tariffs to under 5% which is applied to the major economies in ASEAN currently, and it is expected to be applied to the rest of the countries including India, stated H.E. Mr. Ton Sinh Thanh, the Ambassador of Viet Nam to India.

ASEAN and India are natural partners that share geographical, historical ad civilizational ties for a long time. The foundation of ASEAN-India relationship is rooted in the foreign policy as well as India’s “Act East Policy” (AEP). The AEP, as H.E. Mr. Moe Kyaw Aung, the Ambassador of Myanmar to India opined, will improved connectivity with the ASEAN states, facilitate trade, and step-up cooperation on security issues. The AEP has however, reaffirmed India’s efforts to engage more extensively with the region of Southeast Asia. India’s interests and effort to connect and engage with ASEAN have grown considerably, however at a slower pace. H.E Mr. Chutintorn Gongsakdi, the Ambassador of Thailand to India, highlighted the achievements of the ASEAN Economic Community (AEC) in working towards a single market and production base with tariffs at almost zero with exceptions to only a few sensitive goods.

ASEAN is a rising as an attractive destination for investment and in doing business. With the agreement on the ASEAN Comprehensive Investment Agreement (ACIA), ASEAN has emerged as a single investment destination, by creating a free and open investment environment within ASEAN countries. In working towards a competitive economic region, H.E. Mr. Chutintorn Gongsakdi stated, ASEAN has also achieved competition policy and law, consumer protection laws, International IP protocols; ASEAN Highway network, Principles for PPP frameworks, ASEAN Open Skies policy, etc, which would create a pleasant environment for foreign investors.

Learning about Myanmar

Myanmar is the largest country of mainland Southeast Asia. After decades of international isolation prevented the modernization and expansion of infrastructural networks, the Government of Myanmar is now in the preparation for building the physical “roads” to becoming Asia’s “crossroads” through investments into major highways and roads. Speaking on regional connectivity, H.E. Mr. Moe Kyaw Aung, the Ambassador of Myanmar to India highlighted the early implementation of the India-Myanmar-Thailand Trilateral Highway and the extension of the Trilateral Highway to Laos and Cambodia. Speaking about India-Myanmar relations, he mentioned about the Memorandum of Understanding (MoU) signed in August 16, 2016 for the construction of 69 bridges across Tamu-Kyigone-Kalewa (TKK) of the trilateral highway in Myanmar at the request of Myanmar.

In facilitating business and promoting foreign investment in Myanmar, His Excellency highlighted the various laws that provides corporate tax reductions for foreign businesses desiring to invest in Myanmar and eases conditions for long-term real estate leases. Various laws have been revised to facilitate investment and to ease the operation of businesses in Myanmar, such as the Foreign Investment Law (granting taxation benefits, land use rights etc.), the Myanmar Citizen Investment Law and the Arbitration Law. Further legal changes to a better business-enabling environment are currently in the making (e.g.  Banks and Financial Institutions Law of Myanmar and a combined Myanmar Investment Law).

His Excellency also highlighted the sectors of education, tourism, healthcare and film industries where countries like India can tap into and invest in Myanmar. He focussed extensively on two sectors: Tourism and hospitality sector, where he invited foreign investors to tap on. He stated, Myanmar has seen exponential growth in the service sector, especially, tourism, with the opening of Myanmar since 2011. Foreign investors are encouraged to explore the tourism and hospitality sector of Myanmar. Other FMCG industries have grown and opened up opportunities in the education, healthcare, films and music industries.

Learning about Viet Nam

The 2018 World Bank annual ratings placed Viet Nam in 68 ranking among 190 economies in the ease of doing business.[1] H.E. Mr. Ton Sinh Thanh, the Ambassador of Viet Nam to India, highlighted that Viet Nam stands as a key country in the ASEAN region and has become an attractive market in the world of investment. With half of the population in the age group of 25-52 years of working age, the country is well positioned to supply young and abundant workforce. The literacy of the country is above 90% of the population. The Government of Viet Nam has committed to creating favourable conditions for all investors and businesses, as they execute their long-term investment plan and actively participate in the global supply and value chain. Viet Nam’s increasing network of free trade agreements (FTAs) are also enhancing investment opportunities in the country.

Viet Nam’s rapid growth over the past decade is mostly due to the country’s move away from a command economy to a more open and liberal one. Viet Nam saw economic stability with strong growth of 6% GDP in the last two decades. The growth rate was at 6.3 % in 2017.

Interestingly, the time frame to start a business in Viet Nam has reduced and even become more convenient. For instance, a project of less than USD 15 million takes 15 days for the whole process; whereas, a project of more than USD 15 million and above takes up to 45 days. The incentives provided by the government; tax subsidies; land lease exemption from 3-15 years; tax holidays; reduction in corporate income taxes upto 20% from 25-23% in 2016, are added to a surge in FDI, His Excellency added.

Learning about Thailand

With a population of 60 million, and a market size of USD 23.5 trillion, Thailand stands as one of the most attractive investment destinations for foreign investors because of its strategic location, strong economic fundamentals, business-friendly environment, excellent infrastructure and attractive incentives, reiterated H.E. Mr. Chutintorn Gongsakdi, the Ambassador of Thailand to India. The World Bank Group 2018 report on ‘Ease of Doing Business’ ranks Thailand 26 out of 190 and ranks Thailand No. 26 in DB 2018 Distance to Frontier (DTF)[2]. More importantly, Thailand was ranked first in US News Best countries to start a business among 80 countries.

Thailand has signed FTAs with numerous trading partners worldwide, to enhance free and fair global trade. Thailand has demonstrated remarkable economic progress and has been working to strengthen its move in the global market and achieve improvement in the ease of doing business, especially, through advanced innovation. This includes investments in Eastern Economic Corridor (EEC) to create seamless transport and logistics system, linking rail, sea routes and air transport. The move introduced by the Thai government to start the Smart Visa program is an initiative to attract or invest in the targeted “10 S-Curve” industries[3] for EEC, along with feasible investment incentives including merit-based, activity-based and Tax and Non-Tax Incentives, Special economic Zones (SEZs) etc to facilitate foreign investors in the Kingdom of Thailand.

The session was attended by diplomats of ASEAN countries, corporates, government and non-governmental sectors.

[1] World Bank. http://www.doingbusiness.org/data/exploreeconomies/vietnam

[2] World Bank, http://www.doingbusiness.org/data/exploreeconomies/thailand; The distance to frontier (DTF) measure shows the distance of each economy to the “frontier,” which represents the best performance observed on each of the indicators across all economies in the Doing Business sample since 2005. An economy’s distance to frontier is re ected on a scale from 0 to 100, where 0 represents the lowest performance and 100 represents the frontier. The ease of doing business ranking ranges from 1 to 190

[3] Next-Generation Automotive, Intelligent Electronics, Advance Agriculture and Biotechnology, Food Processing, Tourism, Digital, Robotics and Automation, Aviation and Logistics, Biofuels and Biochemicals and Medical Hub.

Royal Thai Embassy in New Delhi
1 May 2018