ASEAN Comprehensive Investment Agreement Guidebook for Businesses and Investors

ASEAN launched the ASEAN Comprehensive Investment Agreement: A Guidebook for Businesses and Investors (ACIA Guidebook) during the Forum on the ASEAN Comprehensive Investment Agreement - Transforming Investment in ASEAN through ACIA (ACIA Forum).

The Forum was held to introduce ACIA, the ASEAN investment legal instrument which entered into force to replace the Framework Agreement on the ASEAN Investment Area (AIA Agreement) and the ASEAN Agreement for the Promotion and Protection of Investments (ASEAN IGA), and their respective amending Protocols, in order to further enhance regional integration to realise the vision of the ASEAN Economic Community (AEC) by 2015. 

The ACIA Guidebook can be downloaded from this link here.

The Laws on Investment in Cambodia

BUN Youdy, " The Laws on Investment in Cambodia ", New York State Bar Association Seasonal Meeting, Hanoi, 24 oct. 2013 (online version).

Report : Trends and Impacts of Foreign Investment in Developing Country Agriculture

Trends and Impact of Foreign Investment in Developing Country Agriculture, Report, FAO, 2012 (online version).

For thailand case stydy : page 91

For cambodian case stydy : page 159 

Foreign Direct Investment in Land in Cambodia

Alfons Üllenberg, Foreign Direct Investment in Land in Cambodia, GTZ, dec. 2009 (online version).

Foreign Investment in Agriculture in Cambodia

SAING Chan Hang, HEM Socheth, OUCH Chandarany, Foreign Investment in Agriculture in Cambodia, CDRI, Working paper n° 69, june 2012 (online version).

Why a fully integrated ASEAN is not (yet) possible

Seven years after announcing plans for the region’s full integration and liberalization, theAssociation of Southeast Asian Nations needs more time and effort to achieve what it calls an “economic community” — a goal originally set in 2015.

So what’s to blame? According to Jayant Menon, regional economic integration lead at the Manila-based Asian Development Bank, a mixture of policy implementation delays, non-alignment of domestic and regional interests, as well as the overall development disparity — or gap — between the nations in the region.

Additionally, some countries are still struggling to cope in terms of financial as well as technical capabilities in carrying out some of the regional measures that further slow down the process.

“There have been delays in the ratification of signed agreements and their alignment with national domestic laws and delays in the implementation of specific initiatives,” Menon told Devex. “Dec. 31, 2015 will not see a full ASEAN liberalization as one would see in Europe.”

He added that some countries “lack the technical, regulatory, or financial capability to fully implement or adopt some of the measures,” underlining the kind of development gap that exists between countries in the region such as ultra-modern Singapore or deeply impoverished Laos.

The goal of an ASEAN Economic Community was adopted by the bloc’s 10 member states in 2007 to promote a harmonized region, achieving economic development by together focusing on 4 key areas: having a single market and production base, establishing a competitive economic region, ensuring that economic development is equitable, and making sure that the region is integrated with the global economy.

Major strides have been made in recent years, with policies to tackle tariff barriers more-or-less already in place, including a regional single window that streamlines customs and business processes.

But much more needs to be done.

Menon said that the latest assessment on the process showed that the region has only reached about 68 percent of its targets. The economist explained that “there is still some way to go” and that the integration and liberalization goal is a “long process that will continue beyond 2015,” with 2025 as a more likely new target deadline.

“We should see 2015 as a milestone for the AEC, not a destination,” Menon noted. “Some see 2025 as a more realistic target … with a stock take in 2020.”

Challenges and potential solutions

One of the biggest challenges that make the economic community goal a steep mountain to climb is the willingness and effort of national governments to realign policies that can pose a potential bottleneck in the integration process at the implementation stage, according to Menon.

“The greatest challenge in realizing the AEC will occur at the implementation stage. Countries may have to realign national policies or get accords ratified by their parliaments,” he said, adding that not resolving this issue may render all previous efforts wasted.

This is of particular interest as several countries in the region remain transitional democracies, which may pose difficulties in passing and implementing such policies effectively. Member states including Myanmar — despite being considered a donor darling of late — and Cambodia still face the threat of civil unrest, with governments struggling to find common ground in pushing through development reforms.

So how can actors make sure that ASEAN can meet its targets, whether by 2020 or 2025? The region should address the following roadblocks:

1.    Eliminate non-tariff barriers, including anti-dumping activities and sanitary regulations.

2.    Strengthen food security and cooperation in the sectors of agriculture and forestry.

3.    Adopt trade facilitation measures that reduce costs, especially for member states with insufficient financial and technical capabilities.

4.    Strengthen and improve investment policies, the business climate and capital mobility of member states so money can flow freely across borders.

Another issue that could potentially be a stumbling block in this planned integration and liberalization of the ASEAN region concerns the territorial disputes of several member states with China in the South China Sea. Despite being a political issue, the row is said to be creating a divide between members of the regional bloc that could hamper progress.

Steps ahead

Aside from national governments implementing supporting policies, Menon also highlighted the vital role of the international aid and development community in the integration process.

“There are many areas in which the international community can help. Improving connectivity — through building cross-border highways, railways and sea links, as well as telecommunications — can all help,” he said. “Helping to ease cross border movement in goods, capital, and people is also important.”

The ADB economist added that tackling wider development issues should also be on the agenda of the regional bloc moving forward, including climate change, disease prevention, disaster mitigation and good governance.

“We [also] need to work to ensure that contagion risks are mitigated through the creation multilateral structures [while] strengthening domestic financial systems [and] institutions that support integration,” Menon concluded.

Lean Alfred Santos

https://www.devex.com/news/why-a-fully-integrated-asean-is-not-yet-possible-83140

Vietnam warned about Cambodia as a rival in attracting FDI

VietNamNet Bridge – The infrastructure system situation in Vietnam is believed to be equal to that in Cambodia and Laos. But Vietnam has bigger problems in corruption and law burden.

Vietnam has more rivals in attracting FDI

The information was released at the ceremony on announcing the 2013 provincial competitiveness index (PCI) held by the Vietnam Chamber of Commerce and Industry (VCCI) on March 20.

Instead of the usual question--why investors decided to make investment in Vietnam and the localities, VCCI this time has requested the investors to compare the Vietnamese business environment with the other countries which they once planned to go to.

Fifty-four percent of foreign invested enterprises, before deciding to come to Vietnam, once considered investing in some other countries, including China (11 percent), Thailand (10.6 percent) and Cambodia (7.7 percent).

Vietnam is no longer the most favorite destination for foreign investors like it was in 2007-2010. It now has to compete with the other strong rivals in the region, including China, Thailand, Indonesia, and the newly emerging countries such as Laos, Myanmar and Cambodia.

Foreign invested enterprises (FIEs) noted that the Vietnamese business environment is less attractive than others because of the high underground fees, administrative procedure and law burdens, low public service quality (education, healthcare) and the poor infrastructure.

Cambodia – a redoubtable rival

Vietnamese now feel worried about the strong rise of Cambodia, the neighbor, which was believed to be inferior to Vietnam in many fields.

The list of the business fields in which Cambodia has greater advantages than Vietnam has been prolonged.

Another inferiority of Vietnam has been added into the list when the investors in the PCI survey said the administrative procedure and law burden is heavier in Vietnam than in Cambodia.

Prior to that, the public was stirred up by the information that Vietnam, which has been trying to develop the automobile industry for the last tens of years, has lagged behind Cambodia, which is believed to have lower technologies.

Cambodians have announced they have successfully made electric cars monitored by smart phones. Especially, the car is very cheap, priced at $5,000, or VND100 million.

Meanwhile, Vietnam still cannot develop its automobile industry after tens of years of investments. Madaz and Ford, the world’s big automobile manufacturers, have canceled the big investment projects they intended to develop in Vietnam because they could not find the car parts and accessories needed for the assembling in Vietnam.

Vietnam is also believed to lag behind in the rice production. Cambodia has recently announced that it would penetrate the US and South Korea, well known as choosy markets.

While Vietnamese rice has been left unsold, Vietnamese merchants have been hunting for Cambodian rice because of its low price.

Nguyen Van Luc, a farmer in Can Tho City, said Cambodian rice, made of high yield varieties, has been bought at VND4,500-5,000 per kilo, much lower than the Vietnamese high quality and fragrant rice prices.

A recent report by the Ministry of Industry and Trade showed that the Vietnam’s exports to Cambodia in January 2014 decreased sharply from that in January 2013.

Dat Viet

http://english.vietnamnet.vn/fms/business/98227/vietnam-warned-about-cambodia-as-a-rival-in-attracting-fdi.html

Philippines seeks to cut income tax rates filed

TO INCREASE the level of compliance and reduce the number of Filipinos who do not pay taxes, a lawmaker has filed a bill at the House of Representatives seeking to amend the National Internal Revenue Code (NIRC) by restructuring the country’s income tax system effectively reducing both individual and corporate income taxes.

House Bill (HB) 4099 was filed last March 10 by Valenzuela City Rep. Magtanggol T. Gunigundo I (2nd district). It was referred to the House committee on ways and means last March 11 for consideration.

Under HB 4099 or the Proposed Act Amending Sections 24 and 27 of the NIRC (Republic Act 8424), individual and corporate income taxes rates would go down to 15% from the current 32% and 30%, respectively.

EXEMPTED

HB 4099 states that individuals earning gross income below P180,000 annually or whose net taxable income is below P30,000 are exempted from income tax while those earning P180,000 to P190,000 per annum will enjoy a tax relief of P6,750 per annum.

The current law provides that those individual/married/head of the family with net taxable income of P130,000 has tax due of P20,500, but under the proposed measure their tax due is only P9,500 annually.

"For married individual taxpayers with one dependent whose annual net taxable income is P105,000, the tax due is P15,500 but with the proposed measure they will only pay P7,000," the bill said.

The bill noted that for married couples with two dependents and the annual net taxable income is P80,000, the tax due is P10,500. But under the bill, the tax due will go down to P4,500.

Those married individuals with three dependents with net income of P55,000 currently needs to pay P6,250 compared to the P4,000 under the proposed measure, while those married with four dependents with P30,000 income and with P2,500 tax due will be paying P1,500 under the proposed measure.

The bill also suggests for corporate income tax a flat rate of 15%.

"This will definitely reduce the number of Filipinos who do not pay taxes. Lower taxes means higher level of compliance," Mr. Gunigundo said in the explanatory note of the bill.

He noted though that with the said tax reductions, the government stands to lose at least P90 billion.

"The initial revenue drop around P90 billion in income taxes should not deter Congress from reducing income tax rates. The bigger picture, which is the Philippine economy, will in the long run gain much more in terms of lower unemployment, more VAT (value-added tax) collections, a happier people and more productive citizenry," Mr. Gunigundo told reporters in a press conference yesterday.

He added that the tax reduction will also stimulate the economy "by providing individual taxpayers more after-tax income or disposable income which they can either save or spend in the engagement of services or purchase of goods that are subject to VAT."

"Corporate taxpayers on the other hand can use up after-tax income for giving out more dividends to shareholders which they in turn may also consume in the purchase of VAT-able goods. Aside from these, corporate taxpayers may invest in the purchase of modern equipment, infrastructure, facilities upgrade, research and development, etc," he said.

MORE JOBS, SALES

Mr. Gunigundo assured that with the expected increase in sales, more jobs will be created to meet the increase in demand due to the enhanced purchasing power of consumers.

"With the impending 2015 Association of Southeast Asian Nations (ASEAN) integration, the tax rates of our country must be competitive enough to attract more foreign direct investment that will generate jobs to wipe out unemployment in our county," he said.

Mr. Gunigundo noted that around 40% of the country’s gross domestic product (GDP) comes from the informal economy which do not pay taxes. "Reduced income tax rates would serve as an incentive to leave the informal economy and go mainstream. This will broaden the tax base and improve revenue compliance of taxpayers," he said.

Under HB 4099, corporations under special economic zones will continue under the tax-exempt regime until the expiry date of their contracts with the government.

Source : http://www.bworldonline.com/content.php?section=Nation&title=Bill-seeking-to-cut-income-tax-rates-filed&id=85315

Book : Regionalism in International Investment Law

Edited by : Leon Trakman,Nicola Ranieri
Oxford University Press
2013

Regionalism in International Investment Law provides a multinational perspective on international investment law. In it, distinguished academics and practitioners provide a critical and comprehensive understanding of issues in a field which has grown exponentially in its importance particularly over the last decade, focusing on the European Union, Australia, North America, Asia, and China. The book approaches the field of foreign direct investment from both academic and practical viewpoints and analyzes different bilateral, regional, and multinational agreements, often yielding competing perspectives. The academic perspective yields a strong conceptual foundation to often misunderstood elements of international investment law, while the practical perspective aids those actively pursuing foreign direct investment in better understanding the landscape, identifying potential conflicts which may arise, in more accurately assessing the risk underlying the issues in conflict and in resolving those issues. Thorny issues relating to global commerce, sovereignty, regulation, expropriation, dispute resolution, and investor protections are covered, depicting how they have developed and are applied in different regions of the world. These different treatments ensure that readers are able grasp the subject matter at multiple levels and provide a comprehensive overview of developments in the field of foreign direct investment.

ASEAN regional investment agreements is discussed in chapter 8 of this book at page 182.

Investment regime and arbitration in Myanmar

Shaun Lee, " Investment regime and arbitration in Myanmar ", Singapore International Arbitration Blog, 13 march 2013 (online version).

The 2014 Asia Tax Comparator

The 6th issue ( november-december 2013) of Asia Briefing magazine provides a comparative tax regime in all ASEAN countries, plus China, Hong Kong and India.

As more and more free trade agreements and double tax treaties between Asian nations and other jurisdictions around the world continue to come into effect, it is clear now mre than ever that careful planning should go into choosing the most tax efficient structure and market for your business in Asia. Taxation plays a major role in the eventual decision for investment.

To read this study online, click here.

ASEAN's Liberalization of Legal Services: The Singapore Case

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This article shall be cited as Pasha L. Hsieh " ASEAN's Liberalization of Legal Services: The Singapore Case ", Asian Journal of WTO & International Health Law and Policy, Vol. 8, No. 2, pp. 481-504, September 2013 (online version).

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This article examines the liberalization of legal services in the Association of Southeast Asian Nations (“ASEAN”) within the framework of the ASEAN Economic Community and ASEAN’s free trade agreements. Although trade in legal services is important to ASEAN’s goal as a “single market and production base,” the article challenges the weaknesses of ASEAN’s legal services liberalization. It then explores Singapore’s experiment on the regulations of foreign law firms and foreign lawyers, which have become substantially liberalized in the past decade. The article argues that while Singapore may serve as a positive example, ASEAN countries should be cautious of the gap between Singapore’s legal framework and the actual practice of foreign law firms. By analyzing the Singaporean concepts of Formal Law Alliances, Joint Law Ventures and Qualifying Foreign Law Practices, the article provides recommendations forASEAN governments and legal communities for liberalization in the legal services sector.

Doing Business Report 2014 for ASEAN countries

The Doing Business Project provides objective measures of business regulations and their enforcement across 189 economies and selected cities at the subnational and regional level.

The Doing Business Project, launched in 2002, looks at domestic small and medium-size companies and measures the regulations applying to them through their life cycle.

By gathering and analyzing comprehensive quantitative data to compare business regulation environments across economies and over time, Doing Business encourages countries to compete towards more efficient regulation; offers measurable benchmarks for reform; and serves as a resource for academics, journalists, private sector researchers and others interested in the business climate of each country.

In addition, Doing Business offers detailed subnational reports, which exhaustively cover business regulation and reform in different cities and regions within a nation. These reports provide data on the ease of doing business, rank each location, and recommend reforms to improve performance in each of the indicator areas. Selected cities can compare their business regulations with other cities in the country or region and with the 189 conomies that Doing Business has ranked.

Doing Business is under the supervision of the World Bank and the International Finance Corporation.

Click on each country to see the report.

• Brunei
• Cambodia
• Indonesia
• Lao
• Malaysia
• Myanmar
• Philippines
• Singapore
• Thailand
• Vietnam