1. Single Market and Production Base

The ASEAN Economic Community (AEC) envisions ASEAN as a single market and production base characterized by free flow of goods, services, investments, capital, and labor.

AEC initiatives will help ASEAN investors fully tap on the potential of ASEAN’s 600 million-market and enable companies in the region to access raw materials, production inputs, services, labor, and capital wherever they choose to set-up their business operations. This means companies can save on production costs, focus on its specialization, or maximize economies of scale without necessarily leaving high potential market areas within the region.

What are the possibilities for investors?

• High-end restaurant chains in high-GDP markets can choose to source their ingredients locally or from neighboring ASEAN countries at competitive prices
• Clothing brands can set-up their factories in ASEAN countries with cheaper labor cost but focus distribution in bigger ASEAN markets to increase profits
• Manufacturing companies in a middle-income ASEAN country can source high-tech product components from R&D-driven ASEAN economies while benefiting from its location’s competitively skilled work force
• Service providers in sectors such as telecommunications, healthcare, or finance can establish companies across national borders within the region
• Professionals from an ASEAN engineering, architecture, or accountancy firm can be moved within the region and continue to practice their profession
• Companies investing in the region can be extended non-discriminatory treatment, including national treatment and most-favored nation treatment both at the pre-establishment and post-establishment stages, with minimum exceptions

2. Competitive Economic Region

The ASEAN Economic Community (AEC) envisions ASEAN as a competitive economic region. Investors can be assured that as ASEAN Member States work towards realising this vision, businesses can expect reforms and initiatives that aim to establish the following:

• Culture of fair competition among companies
• Intellectual property rights protection resulting to enhanced creativity, strong innovation, and advanced technologies
• Efficient and integrated transportation network at air, land, and sea
• Secure and connected information infrastructure
• Reliable supply of energy, including renewable and bio fuels
• Sustainable mineral development
• Efficient taxation system
• Better legal infrastructure for electronic commerce
• Consumer protection

What are the possibilities for investors?

• Information-technology companies in high-income ASEAN countries can transfer advance and proprietary technologies without risk to their Intellectual property
• SMEs in the creative industries can leverage on their cultural and artistic creativity for increased commercialization
• Investments in ASEAN can easily link with neighboring Northeast and South Asian countries through the region’s integrated transportation network (i.e. Singapore-Kunming Rail Link)
• Energy-dependent investments such as those in manufacturing can expect secure, sustainable, and lower energy cost once the Trans-ASEAN Gas Pipeline and ASEAN Power Grid are developed
• Private sector will have increased opportunities for involvement in the energy and mining sector in terms of investments, financing, and technology transfer

3. Equitable Economic Development

ASEAN is committed to reducing the development gap in the region. To achieve this, the region aims to stir the development of small and medium enterprises (SMEs) through the ASEAN Blueprint for SME Development. ASEAN also seeks to strengthen the implementation of technical assistance and capability building programmes for public and private sectors needing assistance in some ASEAN countries through the Initiative for ASEAN Integration (IAI).

With the success of these initiatives, investors can expect strong participation of small and medium enterprises (SMEs) in the building of regional production network which will assure them of wider options for suppliers and partners from supporting industries. Investors can also benefit from the IAI as beneficiary ASEAN governments will be more capable to develop and implement economic policies that would further boost the positive effects of the ASEAN Economic Community.

4. Integration into the Global Economy

Amid increasing globalization, ASEAN aims to become a more dynamic and stronger segment of the global supply chain and is determined to look beyond the borders of the ASEAN Economic Community.

Investors can be assured that the region continues to review the free trade area (FTA) agreements and comprehensive economic partnerships (CEP) to which it is a party to, with the goal of allowing ASEAN businesses to penetrate and integrate into the global economy.