An Introduction to Doing Business in ASEAN 2025

Doing Businessin ASEAN2025 Special Focus Data Protection inthe ASEAN-6 THE DOING BUSINESS IN ASIA GUIDES SERIES Available to Download Now: Doing Business in Indonesia and Singapore Portals •China Guide•India Guide•Indonesia Guide•Hong Kong Guide•Singapore Guide•Vietnam Guide•UAE Guide Our latest online Doing Business in Indonesia and SingaporePortals consists of 100+ guides, videos, publications, andtools that are practical and easy to navigate, covering: WhyIndonesia/Singapore,Regions to Invest,Sector Insights,How to Setup, Tax, Audit and Accounting, HR, Recruitment,PEO, and Payroll, News, Events, and more. This edition of Doing Business in ASEAN was produced by a team of professionals atDezan Shira & Associates, with Ayman Falak as Editor.Creative design of the guide was provided by Miguel Enrico Anciano. © 2025 Dezan Shira & Associates Disclaimer The contents of this guide are for general information only. For advice on your specific business, please contact a qualified professional advisor.Copyright 2025, Asia Briefing Ltd. No reproduction, copying, or translation of materials without prior permission of the publisher is permitted. About Dezan Shira & Associates At Dezan Shira & Associates, our mission is to guide foreign companies through Asia’scomplex regulatory environment and assist them with all aspects of establishing, maintainingand growing their business operations in the region. Since its establishment in 1992, DezanShira & Associates has grown into one of Asia’s most versatile full-service consultancies withoperational offices across China, Hong Kong, India, Singapore and Vietnam, as well as liaisonoffices in Italy, Germany and the United States, and partner firms across the ASEAN region.With over 30 years of on-the-ground experience and a large team of professional advisers,we are your reliable partner in Asia. Preface The Association of Southeast Asian Nations (ASEAN), with over 600 million people and arising middle class, is set to become the world’s fourth-largest economy by 2030. Despiteglobal challenges like inflation and supply chain disruptions, ASEAN-6 economies—Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam—are projected togrow at an average of 4.8 percent in 2023, outperforming the global average of 3.2 percent.Vietnam leads with 6.8 percent growth, highlighting the region’s economic dynamism drivenby increasing consumer demand. ALBERTO VETTORETTI Managing PartnerDezan Shira & Associates ASEAN’s domestic consumption is expected to hit US$4 trillion by 2030, attractingsignificant Chinese outward direct investment (ODI), which reached US$25.12 billion in2023—a 34.7 percent annual increase. Key sectors include manufacturing, digital technology,and infrastructure, with major investments in Singapore, Indonesia, Vietnam, and Malaysia.This surge also positions ASEAN as a critical supply chain hub amid geopolitical shifts The 2025 U.S. administration could reshape trade policies, potentially impacting ASEAN.A new Donald Trump presidency might reintroduce tariffs, forcing Chinese firms torelocate production to ASEAN to safeguard exports. While this could enhance ASEAN’smanufacturing role, exporters in electronics, textiles, and automotive parts may face scrutinyas intermediaries for Chinese goods. Diversifying export markets and bolstering regionaltrade agreements are vital to mitigating risks. Balanced ties with the U.S. and China, coupled with robust FDI inflows totaling US$229.8billion in 2023, solidify ASEAN’s appeal. Strengthening supply chains, easing regulations,and fostering intra-ASEAN trade will further enhance resilience. As ASEAN advances toward 2030, its strategic reforms and expanding consumer classpromise unmatched investment opportunities. This publication, compiled by experts atDezan Shira & Associates, introduces the fundamentals of investing in ASEAN and providesinsights into navigating this dynamic market. “An Introduction to Doing Business in ASEAN 2025” covers the following critical areas: •Corporate establishment•Tax and accounting•Human resources and payroll•Audit and compliance CONTACT Dezan Shira & Associatesindonesia@dezshira.comwww.dezshira.com What’s New in This Guide ASEAN countries have implemented an array of regulatory reforms as the bloc looks to increaseits attractiveness as a destination for foreign investment. The level and type of reforms variesbetween members. Indonesia for instance, has enacted its biggest attempt at bureaucraticreform since independence. We provide highlights of some of the key changes in ASEAN states. Indonesia While Indonesia has not experienced significant changes to its legal and regulatory framework,the nation has seen a smooth transition of power with the election of Prabowo Subianto aspresident. Prabowo’s leadership is expected to continue and expand on the reforms andinitiatives introduced by his predecessor, Joko Widodo (Jokowi), particularly in the areas ofinfrastructure