1. ASEAN Members’ Foreign Business Laws
Dr. Prapanpong Khumon
School of Law

2. ASEAN Statistics
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3. GDP per Capita in ASEAN compared with other regions
source: International Monetary Fund 2012
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4. GDP in ASEAN
5,116 USD
9,941 USD
Source: ASEAN Statistics: Key Indicator 2012
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5. ASEAN’S FDI Inflow 2013 Countries Income ($) 2007 2012 Change%
Singapore
46,972
56,651
21%
Indonesia
6,928
19,853
187%
Malaysia
8,595
10,074
17%
Thailand
11,359
8,670
-24%
Vietnam
6,700
8,368
25%
Philippines
2,916
2,797
Myanmar
710
2,243
216%
Cambodia
867
1,557
80%
Brunei
260
850
227%
Laos
324
294
-9%
Total
85,631
111,294
30%
UNCTAD FDI Database 2013 (
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6. ASEAN Services Liberalization: Impact assessment
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7. AFAS Level of Liberalization compared with other RTAs
GATS
NAFTA
MERCOSUR
US-Singapore
AFAS
Scope
W120
Negotiation Method
Positive
Negative
Ratcheting No
Yes
Transparency Requirement
Freeze clause
List clause
No ceiling binding
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8. Thailand’s Horizontal Limitations to AFAS Market Access and National Treatment
A service provider must be a company limited registered in Thailand.
Boards and committees must be Thai nationals and Thai residencies.
A license holder must be Thai national.
Land rights are reserved for Thai nationals.
Maintain measures relating to subsidies, privileges, minimum capital, tax, and nationality requirements.
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9. ASEAN Nations’ Foreign Business Laws in Comparison
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10. ASEAN Nations’ Foreign Business Laws
Countries with only Investment Laws
Countries with Investment Promotion Law + Foreign Business Law
Cambodia (Law on the Investment 2003)
Laos (The Investment Promotion 2009)
Singapore (Business Reg Act and Company Act)
Malaysia (Promotion of Investment Act and Company Act 1973)
Vietnam (Law on Investment 2005)
Brunei (Investment Incentives Order 2001)
Indonesia (Investment Law 25/2007)
Myanmar (Foreign Investment Law 2012)
Philippines (the Omnibus Code of 1987 and Foreign Investment Act 1991)
Thailand (Investment Promotion Act and Foreign Business Law 1999)
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11. Foreign Equity Participation
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12. Few businesses with req. on local share and Board nationality Brunei
Countries
Foreign %
Conditions
Cambodia
Up to 100%
Negative list (prohibited/ reserved / permission requirements/ JV requirements)
Laos
Negative list (prohibited/ reserved/ permission requirements/ JV with govt./ JV with locals)
Singapore
Few businesses with req. on local share and Board nationality
Brunei
Permission and minimum local share partn.
Malaysia
Positive list (JV requirements)
Indonesia
Negative List (prohibited/reserved/JV with locals/ local share part.)
Philippines
Negative list (reserved/ local share partn.)
Vietnam
As per liberalization commitments/ prohibited list
Myanmar
Negative list (reserved/ JV requirements/ JV with govt./ local share partn.)
Thailand
Negative list (reserved/ permission requirements)
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13. Singapore Keeping with Liberalization Service industry = 70% GDP
Aim at higher value activities, new growth industries, upgrading workers’ skills, restructuring social security system\
Establishing pro-business organizations: Pro-Enterprise Panel, Smart Regulation Committee (SRC), the Economic Review Committee (ERC)
SPRING Singapore (the Standards, Productivity, and Innovation Board) under Ministry of Trade and Industry to assist locals in:
Innovation
Standards
Consumer protection
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14. Singapore Foreign Shares Policy 100% foreign shares allowed except:
Legal services: Joint Law Venture (JLV) with locals required, also QFLP to permit areas for foreign law practice, but arbitration completely liberalized
Broadcasting: no more than 49% foreign shares
Newspaper & Printing: no more than 5% both locals and foreigners + nationality requirements for Boards
Banking: ownership of foreign shares vary upon permission/ Qualifying Full Bank (QFB) up to 25 branches per a foreign bank but may impose other network restrictions and access limitations to customers
Engineering & Architectural services: 100% foreign shares allowed but impose nationality restrictions and Board composition
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15. Malaysia Keeping with Liberalization Regulatory reform
Laws and justice administration (new commercial courts + go digital)
Foreign promotion: manufacturing, agriculture, tourism, R&D services, training, environmental
Foreign Shares Policy
Relaxed JV requirements since 2003
100% foreign shares allowed in computer related services, healthcare, tourism (MICE, 4 Stars hotels, tour guide within Malaysia), some transportation sectors, recreational services, leasing services
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16. Indonesia Keeping with Liberalization
Challenges in domestic laws on foreign shares restrictions
Foreign promotion: infrastructure, transfer of technology ind., environment, R&D, new industries, industries using local sources
Foreign Shares Policy
Investment law 25/ Presidential Regulations: 6 lists of allowed foreign business (subject to revision every 3 years)
List 1 Foreign Shares Cap (e.g., golf course 100%, direct sales 95%)
List 2 JV with locals (>5%) (e.g., forestry, maritime, fisheries)
List 3 Reserved for SMEs (e.g., energy in small scale, culture & tourism, community broadcasting services)
List 4 Reserved for locals (e.g., film production, health)
List 5 Special permission for foreigners (e.g., energy, forestry)
List 6 Investment not allowed (e.g., defence, public broadcasting)
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17. Foreign Land Ownership
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18. No except investment exceeding 500,000$<800 sqm
Countries
Land Ownership by Foreigners
Land Lease to Foreigners
Cambodia
No except condos
yes
Laos
No except investment exceeding 500,000$<800 sqm
Singapore
Yes only within business zone or condos
Brunei
No except with permission from Sultan
Malaysia
No except with permission from Economic Planning Unit for business purpose
Indonesia No
Philippines
No except agricultural land with size limit
Vietnam
Myanmar
Thailand
No except investment worth 40 Million THB/ condos but not exceeding 49% of the whole building
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19. The end More queries please contact:
Dr. Prapanpong Khumon School of Law University of the Thai Chamber of Commerce
The end
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