ASEAN Regulatory Brief: Indonesian FDI, Thai Labor Compliance, and Real Estate in Myanmar

Indonesia: Government Set to Open Several Sectors to Foreigners in boost to FDI

Indonesia’s government is set to open several sectors including wholly owned cold storage, sugar factories, and rubber manufacturing to foreigners. The authorities stated that the cold storage industry, in particular, will be opened without any regional restrictions. This should help the fishing processing industry as there is a lack of cold storage facilities.

While the industries will be opened for 100 percent investment, certain conditions will be imposed. For example, foreigners will be able to own sugar and rubber manufacturing companies as long as they source 30 percent of raw materials from local farmers.

These moves come hot on the heels of the governments recently allowance of 100 percent foreign ownership in local e-commerce businesses. Foreign investment in retail including departmental stores, supermarkets and minimarkets is still being discussed.

 RELATED: Pre-Investment Services from Dezan Shira & Associates

Thailand: Companies Lay Off Workers to Comply With Labor Law

Several companies in the seafood processing sector have laid off workers due to labor regulations which were imposed on 13 January prohibiting the employment of workers under 18 years of age. Seafresh Group, as well as other suppliers that supply to several retailers in the US and European markets, have made moves to comply.

In their defense, many companies have complained that employees falsified their age.  In the case of Seafresh, the local government instructed the company to perform a dental check for workers who were suspected to be under 18 years. However, human rights activists have stated that this may not be a reliable method.

The moves largely come as a response to regulators in the US and Europe which recently placed Thailand on a watch list for human trafficking. It is suspected that workers are brought in from Myanmar and Cambodia to provide low cost labor for many industries. Authorities in Thailand have denied that exports to the US, Europe and Australia were made using forced labor.

Myanmar: Government Allows Foreign Investment in Condos

On January 22^nd, authorities within Myanmar passed the Condominium Law which allows for 40 percent foreign ownership in high-rise buildings. The law defines condominiums as being at least six floors on plots exceeding 20,000 square feet.

While foreigners can invest, they are not allowed to manage the condominium, which has created confusion. In addition, while condo owners will have shared ownership of both land the building, existing laws in the country prohibit foreign entities from owning land.

The Ministry of Construction will give further details on the Condominium Law including the number of floors, apartments, and parking lots required; as well as the materials to be used, and security and safety measures of the buildings. While the development will increase foreign investment, companies should wait for clarification from the government to mitigate any regulatory hurdles later on.

The 2015 Asia Tax Comparator
In this issue, we compare and contrast the most relevant tax laws applicable for businesses with a presence in Asia. We analyze the different tax rates of 13 jurisdictions in the region, including India, China, Hong Kong, and the 10 member states of ASEAN. We also take a look at some of the most important compliance issues that businesses should be aware of, and conclude by discussing some of the most important tax and finance concerns companies will face when entering Asia.

Manufacturing Hubs Across Emerging Asia 
In this issue of Asia Briefing Magazine, we explore several of the region’s most competitive and promising manufacturing locales including India, Indonesia, Malaysia, Singapore, Thailand and Vietnam. Exploring a wide variety of factors such as key industries, investment regulations, and labor, shipping, and operational costs, we delineate the cost competitiveness and ease of investment in each while highlighting Indonesia, Vietnam and India’s exceptional potential as the manufacturing leaders of the future.

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.

• Previous Article Indonesian ROs: Easy Steps for Successful Establishment
• Next Article ASEAN Regulatory Brief: Foreign Ownership in Indonesia, Burmese Tax Policy, and Scrapped Visa Requirements in Malaysia