China Outbound: Asia’s Export Processing Zones and ASEAN Opportunities
Our Latest Round-Up Of Business News Affecting China Based Businesses Investing In Asia
In this edition of China Outbound, we explore several key regions set to benefit as China shifts manufacturing to ASEAN and consumer demand in the Middle Kingdom continues to grow. As this trend builds steam, export processing zones – already thriving throughout Asia – will become even more important as destinations for international investment and participation. To stay up-to-date with the latest trends across China and Asia, subscribe to our complimentary weekly newsletter concerning legal, tax, investment and regulatory updates throughout Asia.
Dezan Shira & Associates is proud to announce the new Dezan Shira Asian Alliance, which unites each of our firm’s offices in China, Hong Kong, India, Singapore and Vietnam with four partner firms in Indonesia, Malaysia, the Philippines and Thailand. The new alliance brings together a wealth of accounting, legal and investment expertise across Asia to help facilitate our clients’ growth throughout the region.
The ASEAN-China Free Trade Agreement represents a great opportunity for foreign manufacturers based in China to expand their export markets throughout Southeast Asia. ASEAN will also become a key manufacturing hub for China-bound products as rising costs in China push manufacturing capacity elsewhere in the region.
India’s growing consumer base, coupled with the China-India FTA, make the country an ideal market for China-based manufacturers looking to expand their scope in the region. In this article, we highlight several key trends in India, such as infrastructure development and auto manufacturing, that will provide investment opportunities for China-based manufacturers.
In the rush to get into China over the past decade, many foreign investors established WFOEs – either as trading and services companies, or as manufacturing entities in their own right. Today, however, as many foreign investors begin to eye other Asian markets, transferring WFOE equity ownership from China to Hong Kong or Singapore may provide greater trade flexibility and tax incentives for China-based enterprises.
Annual increases in Chinese worker salaries and the increasing mandatory welfare costs associated with this are making some local governments in China have to strike a fine balancing act between investors facing increasing overheads and social discontent from workers demanding higher salaries and benefits. In response to these rising costs, some manufacturers have begun moving operations to Vietnam and elsewhere in ASEAN for low-end and traditional manufacturing industries, such as shoes, garments and leather production.
As global manufacturing starts to spread across Asia, Export Processing Zones – once the sole preserve of China – are springing up all over the region. Conceived as ideal for emerging markets as they help develop worker skill sets and begin the development of supply chain infrastructure, export processing zones are also popular with foreign investors as they negate the need to import directly into the host country, thus avoiding costly import duties. In this article, we list ten of Asia’s most dynamic Export Processing Zones – and almost certainly most you will not yet have heard of.
For firms engaging in business throughout Asia-Pacific, tax policy remains a key deciding factor when choosing specific FDI destinations. While Mainland China and India are ranked as having the most complex tax systems in the region, Hong Kong and Singapore received the most favorable appraisal of their tax structures, according to a survey conducted by Deloitte this month.
Spread out across more than 1,500 kilometers and six different Indian States, the Delhi-Mumbai Industrial Corridor (DMIC) is one the most ambitious Indian infrastructure projects in the nation’s history. the DMIC is set to consolidate India’s growing role as a global manufacturing and trading hub while boosting the nation’s economy in the process.
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Established in 1999, Asia Briefing Ltd. is dedicated to providing individuals and enterprises with the latest business and regulatory news as well as expert commentary relating to conducting business in emerging Asia.
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Dezan Shira & Associates
Meet the firm behind these publications. Dezan Shira & Associates is a specialist foreign direct investment practice providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in emerging Asia. Since its establishment in 1992, the award-winning firm has grown into one of Asia’s most versatile full-service consultancies with operational offices across China, Hong Kong, India, Singapore and Vietnam, in addition to partner alliances in Indonesia, Malaysia, Philippines and Thailand, as well as liaison offices in Italy, Germany and the United States.