While scepticism exists as to whether AEC will be completely established by 2015, the wheels are certainly already in motion. AEC holds the potential to transform the ASEAN region into the world's next economic powerhouse; and for businesses operating or looking to operate in the region, it brings a myriad of opportunities and likely challenges.
It is time for businesses to consider AEC in their strategic planning. Over the next decade, it is predicted that ASEAN nations will require USD 60b of investment in infrastructure – providing ample opportunities for foreign investors in the booming market.
What's more, AEC presents the perfect opportunity for businesses to reassess current structures and processes, and consider opportunities to streamline, create efficiencies, or take advantage of any particular jurisdictional incentives.
Businesses may also begin to think about issues such as:
- The opportunities for expansion within the region, and conversely the threat of competition from outside your current jurisdiction.
- Supply chain design and the location of various business functions for enhanced efficiency.
- The impact of capital markets integration, including access to capital, listing options, and establishing a regional treasury function.
- Attracting and placing skilled labour in the most valuable locations.
- Effective use of the tax treaty network and free trade agreements.
- Dealing with changes to legislation and compliance processes.
- Leveraging increased consumer demand.
KPMG have a team of ASEAN professionals, based in various ASEAN and non-ASEAN countries, who are well versed in the challenges and opportunities AEC brings to businesses within the region. For more information, or to discuss your queries with these professionals, please contact me.