ACIA Overview


Law Firm in Bangkok, Thailand

1. What is the ASEAN Comprehensive Investment Agreement (ACIA)?

One of the four primary objectives of the coming ASEAN Economic Community is to become a single market and production base with five core elements: the free flow of goods, services, investment, and labor, and the freer flow of capital. In turn, the objective of the ASEAN Comprehensive Investment Agreement (ACIA) that came into effect on 29 March 2012 is to bolster ASEAN investment by establishing a free, open, transparent and integrated investment regime for domestic and international investors throughout the ASEAN member states that supports the economic integration of the region before and after the ASEAN Economic Community integration in 2015. The ASEAN Secretariat published the ACIA Guidebook in 2013 which details the strengths and benefits of the Agreement for potential investors.


Two earlier ASEAN investment frameworks, the ASEAN Investment Area agreement (AIA) and the Investment Guarantee Agreements (IGA), make up the foundation of the ASEAN Comprehensive Investment Agreement. The ACIA improves on the two earlier agreements in a number of areas by means of:

  • Adopting international best practices that help protect investors and their investments and providing increased protections
  • Following recent trends in international investment practices that encourage less restrictive investment regimes
  • Including portfolio investment and intellectual property as well as broader definitions of investors and investments
  • Allowing third-country nationals to benefit from the ACIA
  • Encouraging a higher level of transparency in investment rule-making
  • Adopting Investor-State Dispute Settlement mechanisms (ISDS) and promoting alternative dispute resolution methods


Liberalization, Protection, Facilitation, and Promotion are the ACIA’s four pillars, and to achieve the end goal of the ASEAN Economic Community by 2015, its guiding principles include:

  • Achieving a free and open investment environment in the region through progressive investment liberalization and improving the transparency and predictability of investment rules, regulations and procedures conducive to increased investment
  • Benefiting domestic and international investors and their investments based in ASEAN and providing enhanced protection to investors and their investments
  • Promoting the ASEAN region as a whole as an integrated investment area that has favourable conditions for domestic and international investment
  • Maintaining and according preferential treatment among Member States with no back-tracking of commitments made under previous agreements
  • Granting special and differential treatment and other flexibilities to Member States including reciprocal treatment in the enjoyment of concessions amongst them
  • Openness to expand the scope of the ACIA to cover other sectors in the future


The ACIA is not an investment catchall that any business type or investor can profit from, and it contains precise definitions of authorized investments and investors. An investor under the ACIA can be either a natural or juridical person. A natural person is defined as a national, citizen, or permanent resident of an ASEAN member state. A juridical person is defined as any legal entity under the applicable laws of an ASEAN member state whether for profit or non-profit, or private or government owned, and can be a corporation, trust, partnership, joint venture, sole proprietorship, association, or any other legal business entity. A very important feature of this definition is that a juridical person in ASEAN member state controlled by a 3rd country national is also defined, with some caveats, as an allowed investor.


A “covered investment” under the ACIA is an investment that existed as of 29 March 2012 or was established, acquired or expanded after that date, and was admitted according to the laws, regulations, and national policies of the individual ASEAN member state. Investment is defined as every kind of asset owned or controlled by an investor, including but not limited to:

  • Movable and immovable property and other property rights; e.g., machinery, factory building leases, liens, mortgages, pledges, and charges
  • Shares, stocks, bonds and debentures; e.g., shares and bonds held in a corporation or company
  • Intellectual property rights; e.g., patents, registered trademarks, geographical indications, trade secrets, industrial designs, and copyrights
  • Claims to money or to any contractual performance related to a business that has financial value; e.g., partnership agreements and profit sharing agreements
  • Rights under contracts including turnkey, construction, management, production or revenue-sharing contracts; e.g., turnkey construction agreements, project management, and production sharing agreements
  • Business concessions required to conduct economic activities and having financial value conferred by law or under a contract including any concessions to search, cultivate, extract or exploit natural resources; e.g., expressway build-operate-transfer concessions with the right to collect tolls, and mining contracts


Under the ACIA, investment also includes amounts yielded by investments, in particular, profits, interest, capital gains, dividend, royalties and fees. Any alteration of the form in which assets are invested or reinvested does not affect their classification as investment. If an asset lacks the characteristics of an investment: commitment of capital, the expectation of gain or profit, or the assumption of risk; it is not considered an investment in any form under the ACIA.


2. How Do Investors Benefit from the ACIA?

The overall goal of the ASEAN Comprehensive Investment Agreement is to establish a free, open, transparent and integrated investment regime for domestic and international investors throughout the ASEAN region, and the ACIA’s benefits include investment liberalization, non-discrimination, transparency, investor protections, and Investor-State Dispute Settlement.


2.1 Investment Liberalization

The Agreement liberalizes cross border investment in five sectors: manufacturing, agriculture, fishery, forestry, mining and quarrying, and the services incidental to each. Each ASEAN member state submitted a list of reservations for these sectors, and anything not on the list is subject to national policy, liberalized and open to ASEAN investors. Each member state is then responsible to reduce or eliminate their reservation list in accordance with the three phases of the Strategic Schedule of the AEC Blueprint. ASEAN countries are also committed to enhancing cooperation in areas including:

  • Investment policy convergence
  • Procedures for investment applications and approvals
  • Information exchange on investment related, rules, regulations, policies and procedures
  • Enhanced coordination among government ministries and agencies
  • Higher level of consultation with private sector stakeholders to facilitate investment


To help promote the ASEAN region as an integrated investment area that has favourable conditions for domestic and international investment, all member states agree through the ACIA to:

  • Create the necessary environment to promote all forms of investment and new growth areas in ASEAN
  • Promote intra-ASEAN investment, particularly investments from ASEAN-6 (Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand) into the less developed ASEAN countries
  • Nurture the growth and development of Small and Medium Enterprises
  • Promote joint investment initiatives focusing on regional clusters and production networks


2.2 Non-Discrimination

Equality in treatment for ASEAN investors and their investments is another important function of the ACIA. The Agreement’s National Treatment and Most–Favoured-Nation Treatment principles obligate the ASEAN member states to not discriminate and treat ASEAN investors less favourably than either local or foreign competitors. Under National Treatment, an ASEAN country agrees to treat investors from any ASEAN country no less favourably than it would treat its investors in the admission, establishment, acquisition, expansion, management, conduct, operation and sale or other disposition of investments in its territory. Under Most–Favoured-Nation Treatment, all ASEAN investors must be treated equally and this includes investors from non-ASEAN countries. In addition, member states cannot impose any specific nationality requirements on senior management unless there is an official published reservation, and if a member state requires the board of directors in a foreign company to be of a particular nationality or be residents, it cannot impair the ability of the investor to control its investment. The ACIA also guarantees no performance requirements and cannot impose conditions like minimum local contents, export requirements, or trade balancing requirements.


2.3 Transparency

Another of the ACIA’s guiding principles is to improve the transparency and predictability of investment rules, regulations and procedures conducive to increased investment. These include:

  • Harmonised investment policies that lead to investment policy convergence
  • Streamlined and simplified procedures for investment applications and approvals
  • Dissemination of information on rules, regulations, policies and procedures affecting investors and their investments within ASEAN

To show that the ACIA is rules based and promotes predictable investment rules, transparency is reflected in many provisions and some of the requirements include:

  • Notifying other ASEAN Member States when imposing any transfer of funds restrictions
  • Notifying the ACIA Council when introducing new laws or of any changes to existing laws, regulations or administrative guidelines that could significantly affect investments or the commitments of an ASEAN member state
  • Making publicly available all relevant laws, regulations and administrative guidelines of general application that pertain to or affect investments


2.4 Investor Protections

The ACIA also provides enhanced protection to investors and their investments including fair and equitable treatment, full protection and security, no unlawful expropriation, compensation in cases of strife, and free transfer of funds. The ASEAN member states have agreed to give all covered investments under the ACIA fair and equitable treatment, to not deny justice in any legal or administrative proceedings according to the principles of due process, and that the host country will not make arbitrary decisions and follow its rules and regulations. For any legal action, an ASEAN investor has the right to legal representation and the right to appeal. ASEAN member states will also take all reasonably necessary measures for the protection and security of investments at all times including during any riots or insurgency. For any losses to covered investments due to armed conflict, civil strife, or a state of emergency, non-discriminatory compensation or restitution is required by the ACIA. The Agreement also protects investors against unlawful expropriation, and if a member state does expropriate an investment, proper compensation is required. Insurers’ right to recover are also protected, and member states must grant entry, temporary stay and work authorization for investors, executives, managers and members of the board of directors of an ASEAN investor; however, such authorizations are subject to all relevant immigration and labor laws and policies.


Under the ACIA, each Member State must allow all transfers relating to a covered investment to be made freely and without delay into and out of its territory in a freely usable currency at the market rate of exchange prevailing at the time of transfer. Transfers can include:

  • Contributions to capital including the initial contribution
  • Profits, capital gains, dividends, royalties, license fees, technical assistance and technical and management fees, interest and other current income accruing from any covered investment
  • Proceeds from the total or partial sale or liquidation of any covered investment
  • Payments made under a contract including a loan agreement, made for compensation for strife and expropriation, or arising out of the settlement of a dispute by any means
  • Earnings and other remuneration of personnel employed and allowed to work in connection with a covered investment in its territory.

To prevent the occurrence of serious balance-of-payments and external financial difficulties or their threat, a member state can impose restrictions on the free transfer of funds, but must follow certain criteria.


2.5 Investor-State Dispute Settlement

Another valuable component of the ACIA is its Investor-State Dispute Settlement mechanisms (ISDS) and the promotion of alternative dispute resolution methods. ASEAN investors can resolve disputes by using domestic courts and tribunals, through international arbitration including ICSID, UNCITRAL, and other agreed rules, and by means of alternative dispute methods: mediation, conciliation, and consultation & negotiation. A disputing investor must show that it incurred a loss or damage by reason of or arising out of the breach of the host ASEAN member state of its obligations under ACIA relating to the management, conduct, operation or sale or other disposition of a covered investment. For any disagreements about ACIA interpretation other than investment disputes, all parties must use the existing ASEAN State-to-State dispute settlement mechanism under the ASEAN Protocol on Enhanced Dispute Settlement Mechanism.


Appendix A – ASEAN Comprehensive Investment Agreement Reservation List


1. Brunei

  • All foreign investment in manufacturing and agriculture and the services incidental to them that utilize government sites must have at least 30% local equity participation.
  • Except for logging and sawmilling, all foreign investment in forestry and its incidental services must have at least 30% local equity participation.
  • National Treatment shall not apply to any measure relating to any fishery activities including its Economic Exclusive Zone. All foreign investment in this sector that utilizes government sites must have at least 30% local equity participation.
  • National Treatment shall not apply to any measure relating to the activities using natural resources. This may include limitations in the issuance of permits and quotas.
  • National Treatment shall not apply to any measure relating to the oil and gas sector.
  • National treatment shall not apply to any measure affecting the mining and quarrying sector’s activities. Foreign equity participation will be considered on a case-by-case basis.


2. Cambodia

  • National Treatment and Senior Management Board of Directors (SMBD) obligations shall not apply to any measure relating to the manufacturing of Schedule 1 narcotic and psychotropic substances, and the production of poisonous chemicals, and agricultural pesticide/ insecticide is closed to foreign investors.
  • National Treatment and SMBD obligations shall not apply to any measure relating to restrictions or regulations on forestry and forestry-related industries.
  • National Treatment and SMDB obligations shall not apply to any measure relating to mining including sand exploitation and oil and gas activities carried out within Cambodia. All kinds of sand exploitation for export abroad is prohibited and closed.


3. Lao PDR

Reserved exclusively for Lao citizens:

  • Production, processing and preserving of meat and meat products (cattle, pigs, sheep, horse)
  • Fish processing and storage
  • Fruit and vegetable processing
  • Manufacture of animal and vegetable oil
  • Manufacture of dolls, games and toys
  • Authentic Lao musical instruments
  • Lao traditional textiles
  • Manufacture of veneer sheets, plywood, lamina board, particle board and other panel boards
  • Manufacturing of pesticides
  • Manufacture of ice cream and ice manufacturing
  • Milling
  • Flour and flour products
  • Feedstuff
  • Bakery products
  • Lao local noodle products
  • Non-alcoholic beverages, soft drink, and pure water drinking
  • Collection of guano (bat dung)
  • Operation of fish/aquaculture hatcheries in the Mekong River and its tributaries in Lao PDR is reserved for citizens and companies wholly-owned by Lao citizens. No foreigner is authorize to undertake fishing activity for commercial purposes in Lao PDR


4. Indonesia

Manufacturing areas closed to foreign investors:

  • Traditional fishery and all fishery activities imposed by the relevant regulatory authorities.
  • Salting/drying fish and other water’s biota industry and smoked fish industry
  • Rubber curing industry
  • Manual or semi mechanical processed hand tool industry for handwork and cutting
  • Clay made household necessities industry especially pottery
  • Handicrafts industry that carries specific cultural asset, art value using natural or artificial raw material – embroidery industry, rattan dan bamboo plait industry, plant plait other than
  • Rattan and bamboo industry
  • Hand-tools industry needed for farming to prepare land, process production, post- harvest and processing except hoe and shovel
  • Palm sugar
  • Processed food from seeds and roots, sago, gnetum-gnemon nut and copra industry, soya sauce industry, soy made food and peanuts other than soya sauce, tempe, tofu industry, cracker, chips, peanut cracker, and the like
  • Saw mill industry
  • Primary rattan Industry
  • Kitchen appliances industry
  • Knitted cloth industry especially lace
  • Cloth printing industry especially Batik and traditional patterns
  • Fiber and seed cotton industry


Closed to foreign investors – The manufacture on a fee or contract basis of:

  • Fruit and vegetable canning, pulverizing, juicing and pasting
  • Ice cream
  • Cassava starch
  • Meat processing and preserving
  • Fish industry and canning
  • Cold storage for the fish industry and the like
  • Margarine
  • Cooking oil
  • Milk industry
  • Industry of food from milk
  • Palm starch
  • Feed/fishmeal industry
  • Feed/fishmeal concentrate industry
  • Macaroni, noodle, spaghetti, rice noodle industry and the like
  • Manufacture of tobacco
  • Manufacture of leather products
  • Manufacture of wood and of products of wood and cork, except furniture; manufacture of articles of straw and plaiting materials
  • Manufacture of chemicals and chemicals products,
  • Manufacture of furniture – wood furniture industry, including finishing and designing Rattan and bamboo furniture industry, including finishing and designing


Forestry and Mining & Quarrying areas closed to foreign investors:

  • Exploitation of other forest plants besides timber – sugar palm, pecan, tamarind seed, charcoal raw material, cinnamon, etc…
  • Exploitation of swallows’ nests in nature
  • Primary industry of forest products other than wood
  • Forest ecosystem restoration
  • Exploitation of water resources in forest areas
  • Contractors in the field of lumbering
  • Sea sand extraction
  • Services of bottling and filling of Liquefied Petroleum Gas (LPG)


5. Malaysia

Manufacturing closed to foreign investment:

  • Sugar refining
  • Liquors and alcoholic beverages
  • Tobacco processing and cigarettes
  • Hot rolled steel bars and wire rods
  • Optical discs, including CD, CD-ROM, VCD, DVD
  • Biodiesel
  • Collection, storage, treatment and disposal of hazardous and toxic wastes
  • Ordinary Portland Cement (non-integrated)
  • Capture Fisheries

Fishery, Forestry and Mining & Quarrying:

  • National Treatment does not apply to any measure relating to tuna fishing or any measures relating to forest plantations
  • Foreign fishing vessels are not allowed to fish or attempt to fish or conduct any research or survey in Malaysia’s Exclusive Economic Zone
  • Extraction and harvesting of timber and services incidental to it is closed to foreign investors in Peninsular Malaysia and Sabah.
  • PETRONAS is given the exclusive rights, powers, liberties and privileges to explore, exploit, win and obtain petroleum, whether onshore or offshore of Malaysia.
  • National Treatment and Senior Management and Board of Directorsobligations may not apply to any measure relating to mining and quarrying activities. Joint ventures with state or state-linked enterprises may be required.


6. Myanmar

No new permits being issued to investors:

  • Distilling, blending, rectifying, bottling and marketing of all kinds of sprits, beverages and non-beverages
  • Manufacture of wines, malt and malt liquors, beer and other brewery products
  • Manufacture of soft beverages, aerated and non-aerated products
  • Manufacture of cigarettes
  • Manufacture of corrugated galvanised iron sheets
  • Manufacture of bakery products
  • Manufacture of pulp, paper and paper board

Only allowed to State-owned enterprises:

  • Manufacture of pharmaceutical drugs and related services
  • Operation of oil refinery and refining activities.
  • Production and extraction of hard-wood from natural forests

Only allowed to Government:

  • Publishing of Newspapers and related businesses
  • Reproduction of recorded media
  • Exploration and extraction of and services relating to natural gas and petroleum

Closed to foreigners

  • Prospecting, exploration and mining of gemstones


7. Philippines

National Treatment and the Senior Management and Board of Directors obligations shall not apply to:

  • Manufacture of firecrackers and other pyrotechnic devices
  • Manufacture of arms and explosives
  • Manufacture of dangerous drugs
  • Manufacture of iron and steel products
  • Establishment, installation, addition and operation of any wood or forest products processing plants
  • Food security, poverty alleviation and social equity, income enhancement and profitability, global competitiveness and sustainability
  • Utilization, exploitation, occupation, possession, or conduct of any activity within any forest and grazing land, but foreign equity may be allowed up to 40%, subject to government approval
  • Exploration, development and utilization of mineral resources – this shall include but not be limited to prohibition on foreign equity in small-scale mining and restriction on foreign equity on other mining activities
  • National patrimony and the rights of indigenous cultural communities in accordance with national development.


8. Singapore

  • National Treatment and SMBD obligations shall not apply to the manufacture, use, sale, storage, transport, importation, exportation and possession of arms and explosives.
  • National Treatment shall not apply to manufacture of:
    • Beer and stout, cigars and cigarettes, and chewing gum
    • Drawn steel products
    • Matches and firecrackers
    • Compact discs including read-only memory, digital video discs including read-only memory, video compact discs, master discs, and stampers
  • National Treatment shall not apply to pig farming, quarrying, and the publishing and printing of newspapers


9. Thailand

Closed to foreigners:

  • Manufacture of sugar from sugarcane

Foreigners are not allowed to have equity participation of 50% or more of registered capital.

  • Printing of newspapers
  • Extraction of Thai herbs
  • Making or casting Buddha images and monk’s alms bowls
  • Rice farming, farming or gardening
  • Animal farming
  • Forestry and wood fabrication from natural forest
  • Fishery for aquatic animals in Thai waters and within Thailand’s exclusive economic zone
  • Plant cultivation and propagation including artificial and transplant propagation, and breeding

More than 50% of Thai equity participation is required, but a foreigner is allowed to obtain 50% or more of registered capital subject to conditions:

  • Carved wood
  • Thai silk yarn, weaving Thai silk or Thai silk pattern printing
  • Thai musical instruments
  • Gold ware, silverware, nielloware, bronze ware or lacquer ware
  • Crockery of Thai arts and culture
  • Wood fabrication for furniture and utensil production
  • Rice milling
  • Plywood, veneer board, chipboard or hardboard
  • Lime
  • Silkworm farming and services incidental to silkworm farming
  • Salt farming, including underground salt and services incidental to it
  • Forestry from forest plantations



10. Vietnam

No investment licenses shall be issued to foreign investors in the following sectors:

  • Production of:
    • Firecrackers including fireworks and sky lanterns
    • Explosive materials
    • All publishing products and printing – books, brochures, musical books, newspapers, journals and periodicals, recorded media
    • Cigarettes and cigars, alcoholic beverages and soft drinks, and tobacco production
    • Construction glasses, clay bricks, vertical shaft cement production equipment, and baked earth bricks and tiles
    • Fluorescent tubes and bulbs
    • 10000DWT cargo ships; under 800 TEU container ships; lighters and under 500 seats passenger ships
    • Cane sugar
  • Cultivating, producing or processing rare or precious plants, breeding or husbandry of precious or rare wild animal and processing of those plants or animals (including both living animals and processed matter taken from animals)
  • Services relating to:
  • Producing of industrial gas such as oxy, nitro, CO2 (solid or liquid) caustic soda NaOH (liquid), common used insecticides, and common used paints
  • Dairy processing, cane sugar production, beer and beverage processing, tobacco products
  • Fresh-water fishing, marine fishing, coral and natural pearl exploitation and services related to production of fishing net and twine for fishery, repairing and maintaining of fishing boats, exploiting fresh-water fisheries, and  quality control of aquaculture and processing products
  • Mining and Quarrying:
    • Services related to the application of science and technology to production
    • Services related to testing, adjusting, repairing and maintaining industrial measure and control equipment for oil and gas sector
    • Oil and gas warehouse and supply base services
    • Catering and allied services including food and foodstuff, clean water and vegetable to off-shore construction facilities
    • Manpower supply services including professional manpower, skills and foreign language training for manpower supplied to foreign countries, signing manpower supply contracts with foreign companies
    • Services related to gas processing
    • Services related to geological and exploration drilling
    • Risk assessment, including field-survey, data collection, using special software on impact assessment of frequency and sensitiveness, proposing mitigation measures
    • Services on Environment Protection and Management





  1. ASEAN Comprehensive Investment Agreement – A Guidebook for Businesses and Investors. The ASEAN Secretariat, 2013.
  2. The ASEAN Comprehensive Investment Agreement – Legal Text
  3.  The ASEAN Comprehensive Investment Agreement Reservation Lists by Country
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