Why invest in ASEAN?
High Return on Investments
ASEAN offers consistently high returns on investment as compared with the world average and that of developing countries. For the period 2005-2011, the annual average rate of return of FDI was 11% for ASEAN while the world and developing countries average were only 6.9% and 9.4%, respectively. In 2011 alone, ASEAN posted a return on FDI rate of 9.8% compared to 9.0% in developing countries and 7.1% in the world.
Private companies are confident about their future in the region. Results of the 2012 survey of AmCham-Singapore and US Chamber of Commerce show that out of 356 American companies with operation interest in ASEAN, 85% believe their profit will increase in 2013.
Global players in various industries are present in ASEAN. A lot are expanding and seeing the emerging opportunities and potential from ASEAN integration.
The world’s top global brands (as ranked by Interbrand), have made their way to the region. These include retail brands such as Nike, Zara, Louis Vuitton, and L’Oreal; automotives like Toyota, Nissan, BMW, Honda, and Ford; electronics such as Samsung, Sony, and Philips; financial companies like J.P. Morgan, Citi, VISA, and HSBC; information technology companies like IBM, Yahoo, and Cisco; and food and drinks such as Coca Cola, McDonald’s, Pepsi, Nescafe, and KFC.
More than 80% of the world’s global Fortune 500 companies operate in the region including via non-equity modalities such as contract manufacturing, contract farming, licensing and franchising. The top 10 global automotive companies and top 10 global auto parts manufacturers are in ASEAN.
ASEAN also takes pride in hosting the world’s leading consumer electronics and a number of global pharmaceutical and chemical companies. Apple, Dell, HP, LG, Microsoft, Nokia, Panasonic, Samsung, Sony, and Toshiba are some of the electronic companies with multiple plants in the region. AstaZeneca, Eli Lilly, GlaxoSmithKline, Johnson and Johnson, Merck, Novartis, Pfizer, and sanofi-aventis have production or R&D facilities in ASEAN.
Reasons for Investing in ASEAN
ASEAN is a choice destination for ASEAN and international investors. Investors enjoy profitable operations and commit to deeper engagement in the region as shown by strong reinvestment and sustained growth in foreign direct investments (FDI). FDI stock in the region has quadrupled within a little more than a decade. In 2011, FDI stock exceeded US$1 trillion compared with only US$266 billion in 2000.