Other BriefingsIndonesia-Malaysia Financial Agreement a Model for Bilateralism
Indonesia’s Financial Services Authority (OJK) banking supervision commissioner Nelson Tampubolon has said a recent agreement with Malaysia, which eases Malaysian restrictions on Indonesian banks, is a model for future bilateral agreements. He intends to use the agreement as a basis for planned negotiations with Singapore.
The “Heads of Agreement” document was signed on December 31, 2014 in Jakarta by Bank Indonesia (BI) Governor Agus Martowardojo, OJK Chairman Muliaman D. Hadad, and Bank Negara Malaysia (BNM) Governor Zeti Akhtar Azis. OJK is responsible for micro-prudential, and Bank Indonesia for macro-prudential banking supervision in Indonesia.
The agreement forms part of the ASEAN Banking Integration Framework (ABIF), which applies to the 10 ASEAN nations. During the ABIF implementation process, guidelines are formed multilaterally by ASEAN central banks and financial supervisory authorities, followed by bilateral agreements on entry of banks into ASEAN member states.
RELATED: EU-Singapore Finalize Free Trade Agreement
Under ABIF guidelines, ASEAN banks are to be given equal treatment if they acquire Qualified ASEAN Bank (QAB) status, which only “indigenous” banks established and based in an ASEAN country and owned by ASEAN citizens are eligible for. QAB candidates which meet prudential requirements of an ASEAN country may operate in said country. For Indonesian citizens, applications are to be submitted to OJK.
The ABIF agreement is intended to be incorporated as a provision in the Protocol to Implement the Sixth Package of Commitments on Financial Services under the ASEAN Framework Agreement on Services (AFAS).
Tampubolon has confirmed that due to the principle of reciprocity, no more Malaysian banks beyond CIMB Niaga, BII-Maybank, and Maybank Syariah will be permitted to operate in Indonesia until Indonesian banks may operate in Malaysia under similar conditions. Regulator BNM has limited the operations of the Indonesian Bank Mandiri until now. However, minimum capital requirements of 300 million ringit remain an obstacle for ASEAN banks opening full branches in the country.
With Malaysia at the helm, the pressure is on ASEAN to form the comprehensive ASEAN Economic Community single market agreement by the end of 2015. For detailed information on how your business may be effected by the changes, do not hesitate to get in touch with Asia Briefing for a customized report at: editor@asiabriefing.com
|
Asia Briefing Ltd. is a subsidiary of Dezan Shira & Associates. Dezan Shira 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 China, Hong Kong, India, Vietnam, Singapore and the rest of ASEAN. For further information, please email asean@dezshira.com or visit www.dezshira.com. Stay up to date with the latest business and investment trends in Asia by subscribing to our complimentary update service featuring news, commentary and regulatory insight. |
Tax, Accounting, and Audit in Vietnam 2014-2015
The first edition of Tax, Accounting, and Audit in Vietnam, published in 2014, offers a comprehensive overview of the major taxes foreign investors are likely to encounter when establishing or operating a business in Vietnam, as well as other tax-relevant obligations. This concise, detailed, yet pragmatic guide is ideal for CFOs, compliance officers and heads of accounting who need to be able to navigate the complex tax and accounting landscape in Vietnam in order to effectively manage and strategically plan their Vietnam operations.
An Introduction to Tax Treaties Throughout Asia
In this issue of Asia Briefing Magazine, we take a look at the various types of trade and tax treaties that exist between Asian nations. These include bilateral investment treaties, double tax treaties and free trade agreements – all of which directly affect businesses operating in Asia.
The 2014 Asia Tax Comparator
In this issue of Asia Briefing Magazine, we examine the different tax rates in 13 Asian jurisdictions – the 10 countries of ASEAN, plus China, India and Hong Kong. We examine the on-the-ground tax rates that each of these countries levy, including corporate income tax, individual income tax, indirect tax and withholding tax. We also examine residency triggers, as well as available tax incentives for the foreign investor and important compliance issues.
