Top 7 Countries in Southeast Asia for business in 2023

Blog, Singapore │ May 22, 2023

The business and investment landscape in Asia is rapidly growing and evolving, marking a significant shift over the past 50 years. With a strong emphasis on economic growth, ease of doing business, investment opportunities, and affluent lifestyles, Asia has emerged as a dominant force in various sectors. See below top ASEAN countries boasting some of the largest economies, top-ranked passports, leading manufacturers, and significant consumer bases in the world.

For both local and foreign investors, it’s evident that investing in Asia presents an excellent opportunity. To help you navigate the investment opportunities available in this thriving region, we have compiled a list of the 7 top ASEAN countries that offer exciting opportunities and rich cultures to experience.

Asia is a treasure trove for investors who are seeking quantity and diversity in their investment portfolio. With a staggering population of over 4.5 billion, Asia represents more than half of the world’s population and offers an extensive range of countries to choose from. Contrary to popular belief, Asia extends far beyond East and Southeast Asia. It is a vast continent that encompasses 48 countries, stretching from Turkey in the west to Japan in the east, according to the United Nations.

Every country in Asia has its unique investment potential and level of development, making it a diverse and exciting destination for investors. However, it’s essential to consider individual circumstances and risk tolerance when selecting the best investment route and destination.

With that in mind, we have prepared a list of the top seven Southeast Asia countries to invest in.

1. Singapore

Capital city- Singapore
Based on The World Bank data, Singapore 2021 GDP per capita (US dollars) – 72,794 
Area – 719 km2
Population – approx. 6 million
Industries – services, investments, family office, financial services, fintech

Singapore is one of the wealthiest nations in the world, with some of the highest numbers of UHNWIs (ultra-high net worth individuals). By 2026, Singapore’s population of UHNWIs is forecasted to increase by a remarkable 270%.

The compilation of top Asian nations would be incomplete without acknowledging Singapore, which boasts one of the world’s finest passports.

Singapore enjoys low corporate tax rates (ie. 17%) and individual tax rates start from 2% to 24%. Singapore has signed double taxation agreements (“DTAs”), limited DTAs and exchange of information arrangements (EOI Arrangements) with around 100 jurisdictions.

With strong corporate governance, strong emphasis on highest standards of safety, security, healthcare, and infrastructure, Singapore will be a top country for investors, MNC and foreigner businesses to setup their business or invest in Singapore.

2. Indonesia

Capital city – Jakarta
Based on The World Bank data, 2021 GDP per capita (US dollars) – 4,332.7
Area – 1,913,580 km2
Population – approx. 277 million
Industries – trading, textile, mining, tourism, education, infrastructure, technology, commodity, manufacturing.

Indonesia‘s economy is expected to grow at between 4.5-5.2 percent in 2023. It has one of the highest among G20 members. This will be supported by several important sectors, including commodities, infrastructure development, tourism, and manufacturing of high-value products, such as electric vehicle batteries.

As Southeast Asia’s largest economy, Indonesia has enjoyed an exports boom on the back of rising commodity prices caused by the Russian-Ukraine conflict. As such, Indonesia’s commodity exports will continue to be a backbone to the economy in 2023.

Indonesia’s nickel reserves are making the country indispensable to the global EV industry with the country aiming to be a global EV hub.

The country’s tourism ministry has opened the sector to foreign investment for developing sustainable-based tourism projects, priority tourist destinations, and special economic zones catered to tourism.

Indonesia generally applies a flat corporate tax rate of 22% of the business taxable income. For business with gross revenue or turnover of not more than IDR 4.8 billion (approx. USD 325k) are subject to final income tax at 0.5% of revenue / turnover.

Indonesia Government Regulation No. 18, 2021 allows foreigner buy and own property in Indonesia. Foreigner can buy properties by setting a business in Indonesia or eligible foreigners work and holding working visas such as KITAS.

3. Vietnam

Capital city – Hanoi
Based on The World Bank data, Vietnam 2021 GDP per capita (US dollars) – 3,756.5
Area – 331,230 km2
Population – approx. 97 million
Industries – IT, manufacturing, service sector, tourism, agriculture, construction, real estate

Vietnam is renowned for its expansive rivers, stunning coastlines, and vibrant urban centers. It has both land and maritime boundaries that it share strategic location with neighboring countries such as China, Laos, Cambodia, Thailand, and Malaysia.

As costs in China are increasing across the board, encompassing everything from labor expenses to utility fees, major global companies , such as Nike and Samsung, are setting up shops in Vietnam, enhancing it’s manufacturing industry.

Vietnam has strong economic growth rates and last year, 2022 it was recorded the country’s economy grew 8.02%. Vietnam has pool of young and well-educated manpower with relatively low labor cost and helps businesses for cost savings.

Businesses with a total annual turnover not exceeding 20 billion VND will be taxed at the rate of 20%. The corporate income tax rate for the prospection, exploration and exploitation of oil, gas and other rare resources in Vietnam is from 32% to 50% depending on each project and their location.

4. Malaysia

Capital city – Kuala Lumpur
Based on The World Bank data, 2021 GDP per capita (US dollars) – 11,109.3
Area – 330,345 km2
Population – approx. 34.2 million
Industries – oil, gas, electronics, financial services, manufacturing

Malaysia, a hidden gem in Asia, is the third country on our list that offers an attractive opportunity for foreign investors. Malaysia allows freehold ownership of various types of land without significant limitations.

With property prices in Malaysia considerably lower than Singapore, owning freehold land in the country is an excellent investment choice.This is especially for those seeking to explore the Asia Pacific region. Despite increasing property prices, you can still find prime real estate in Kuala Lumpur for as low as US$2000-US$3000 per square meter.

Malaysia’s market deals’ volume remained robust in 2022. Foreign companies are increasingly looking to diversify their production base outside of China to countries within the Southeast Asia region, including Malaysia.

Malaysia continues to retain its reputation as an attractive investment hub for both foreign and domestic direct investments.

In addition, the standard corporate tax rate for Malaysia is 24%. Companies with paid up capital not more than RM2.5 million, on the first RM 500k will be taxed at 17% and subsequent balance of 24%.

5. Philippines

Capital city – Manila
Based on The World Bank data, 2021 GDP per capita (US dollars) – 3,460.5
Area – 300,000 km2
Population – approx. 117 million
Industries – manufacturing, agribusiness, IT, digital marketing, BPO

With the lifting of activity and capacity restrictions as well as masking and stay-at-home mandates in the Philippines in 2022, the country experienced a flurry of economic activity that drove growth to 7.6%, breaching official forecasts. The economy is expected to follow a steady growth trajectory in 2023. It has projected gross domestic product (GDP) growth of 6% to 7%, significantly higher than the global GDP growth forecast.

Several landscape-changing legislative and regulatory reforms passed in 2022 that are designed to attract much needed capital and technology from foreign investors. Additionally, certain sectors and industries are well-placed to benefit from foreign direct investments (FDIs) into the Philippines in 2023 and beyond.

Meanwhile, as the Philippines rides the wave of digitalization, TMT (Technology, Media and Telecommunications) remains to be a leading area for deals and investments in the country, as in the rest of the region. Certain legislative amendments removing or relaxing nationality restrictions and other barriers to entry also positively increase the attractiveness of TMT for FDIs.

With effect from 1 July 2020, Philippine corporate tax reduced from 30% to 25%.

6. Thailand

Capital city – Bangkok
Based on The World Bank data 2021 GDP per capita (US dollars) – 7,066.2
Area – 513,120 km2
Population – approx. 71.8 million
Industries – manufacturing, tourism, agriculture, export, electronics, real estate

Thailand is intensifying its efforts to regain its competitiveness in the rapidly changing global landscape, particularly in the wake of the COVID-19 pandemic. It aims of achieving inclusive and sustainable growth. Also, thailand is looking to leverage its previous achievements and expand future opportunities. This is through the implementation of its new Five-Year Investment Promotion Strategy (2023-2027).

A significant component of the strategy focuses on Thailand’s investment direction. It revolves around three key concepts: innovation, technology, and creativity. These elements will serve as the driving forces behind the country’s endeavors to build a new and resilient economy. Furthermore, the government is actively investing in the advancement of smart cities, artificial intelligence, and data technologies.

According to a report by the World Bank, the Thai economy is projected to grow by 3.6% this year, a notable increase from the 2.6% growth observed last year. This growth will be supported by a stronger private consumption, a recovery in the tourism sector, and robust pent-up demand. Additionally. the report predicts that foreign tourist arrivals will reach 27 million this year and surpass pre-pandemic levels by 2024.

Meanwhile, Thailand’s corporate income tax rate is 20%. Tax rate for businesses with low paid up capital and income not exceed THB 30 million, the tax rate is range from 0% to 20%

7. Cambodia

Capital city – Phnom Penh
Based on The World Bank data, 2021 GDP per capita (US dollars) – 1,625.2
Area – 181,040 km2
Population – 16,911,524
Industries – textile, tourism, agriculture, manufacturing, real estate

Over the past decade, Cambodia has consistently recorded an average GDP growth of over 7%, making it one of the fastest-growing nations in the region. Moreover, apart from its flourishing business and investment culture, Cambodia offers unique religious architecture and breathtaking natural beauty.

Cambodia’s tourism industry generates significant foreign exchange, with millions of visitors coming to explore its customs and spectacular sites each year. Furthermore, Cambodia has one of the easiest and cheapest residency programs in the world.

While the Cambodian stock market is small, the real estate market has tremendous potential. For instance, you can buy centrally-located property in Phnom Penh for US$1000 per square meter, with strong appreciation potential and high rental yields of 5-6%. Though prices may rise as demand increases, they are still relatively low compared to nearby countries like Vietnam or the Philippines. These ASEAN countries have higher property prices at four times higher on average.

Moreover, the standard corporate tax rate in Cambodia is 20 percent.

For assistance with company registration in Singapore and Indonesia, contact us.

Sources: