06 Oct ASEAN Today – Regional Legal and Business News – September 2017
ASEAN Today – Regional Legal and Business News for September 2017Download PDF
ASEAN Economic Community News
ASEAN Business Survey
The Australian Chamber of Commerce released its Australian Business in ASEAN Survey 2017. The survey findings show that the top attraction for Australian businesses investing into the region is ASEAN’s growing consumer market, not the economic integration of the ASEAN Economic Community. Corruption is rated the top challenge for Australian companies doing business in ASEAN. Over 60% of the surveyed firms expanded their trade and investment in the region in the past two years and 85% plan to expand their investment in the next five years. Singapore is the favorite spot to operate a regional hub and Vietnam is the most popular market for expansion. Two-way investment between ASEAN and Australia was US$224 billion at the end of 2016.
ASEAN-China Consumer Protection
Representatives from ASEAN and China met in Beijing to discuss best practices and models for the effective functioning of product alert systems affecting voluntary and official recalls and bans of defective products. Both parties will continue to work together to identify areas of future technical cooperation and the operation of product recall systems. Stable and robust consumer protection systems are part of the ASEAN Economic Community Blueprint’s initiatives.
Cambodia dropped five places on the World Economic Forum’s Global Competitiveness Report this year and is now the third least competitive country in ASEAN. Cambodia ranked at 94 out of 137 countries, Laos ranked at 98, and Myanmar was omitted from the competitiveness index for the second year running.
Indonesia’s Directorate General of Customs and Excise now requires all foreign directors of import/export businesses to have work permits in order to apply for, amend, or renew their Customs Registration Number. This also applies to directors that don’t reside in Indonesia. The Rehiring and Relocation of Illegals program was implemented earlier this year and allows illegal foreign workers to obtain valid work permits. The government warns that the program ends on December 31, 2017.
To help simplify the administrative process, especially for small and medium-sized enterprises, Vietnam’s Ministry of Industry and Trade plans to cut its current 1200 conditions on business and investment in half. This is part of Vietnam’s ongoing institutional reforms to make the country more attractive to local and international investment.
Laos’ Intellectual Property Department (IDP) says that the country’s number of trademark registrations is not growing. The IDP attributes this to businesses lacking an adequate understanding of the concept of intellectual property and the importance of protecting unique identifiers such as titles, logos, and product labeling. The IDP has only received 40,000 trademark registration applications since 1991.
The Philippine government wants to amend the current constitution to ease foreign ownership restrictions to increase inbound investment. It also wants to increase foreign ownership limits in sectors on the Foreign Investment Negative List.
Thailand’s Finance Ministry is considering three initiatives in a planned amendment of the Revenue Code. One is the elimination of the current capital-gains tax exemption when selling shares of Thai stock. The review of other tax exemptions for other sectors will also be made. The other two initiatives are to increase government revenue and create fairness to tax payers.
Health Insurance Deduction
The cabinet approved an additional personal income tax break for health insurance premiums. Now, taxpayers can claim a deduction of up to 15,000 baht. The new measure went into force retroactively from January 1, 2017. Additionally, the tax break will be allowed for a maximum of 100,000 baht for tax-deductible life insurance premiums that include health insurance riders.
Thailand is increasing its crackdown activities on intellectual property (IP) infringements, in part to get delisted from the US Priority Watch List. The Department of Intellectual Property (DIP) is also planning to continue modernizing the Kingdom’s IP laws and will amend current IP regulations related to the online marketplace and e-commerce. The proposed amendments will allow IP owners to force internet service providers to take down all posts that infringe on their IP rights.
First Marine Insurance Law
The Office of Insurance Commission (OIC) approved Thailand’s first marine insurance law and sent it to the cabinet for consideration. Thailand does not have a marine insurance law, thus the courts have been applying Britain’s Marine Insurance Act of 1906 to adjudicate lawsuits related to insurance claims. The OIC says that when the law is passed, it will help strengthen the local insurance industry’s competitiveness as well as investor confidence.
Special Economic Zones
Rental Fee Waiver
The Treasury Department wants to waive rental fees for private investors for state land in special economic zones (SEZ) in border areas if they develop the land within two years. If they do so, the investor will receive a one-year rental fee waiver. The Treasury Department believes that faster development will help draw new investors.
The Bank of Thailand ordered Thailand’s five largest banks to strengthen their capital reserves to comply with the Basel III rule. These five bank control 70% of Thailand’s banking system’s assets. The higher capital requirement is an increased safety measure and does not imply that the five banks have any financial problems.
Bank of Thailand Act
Under the amended section 19 of the Bank of Thailand Act, financial institutions, not the government, are now mutually responsible for the cost of bailing out other financial institutions. The government will be a secondary source of funding if problems escalate beyond the financial institutions ability to handle.
Foreign Exchange Hedging
To help protect small and medium-sized enterprises from the rapidly strengthening baht, the government wants to set up a foreign exchange hedging scheme. To encourage SMEs to use the scheme to protect against foreign currency risks, the government plans to subsidize hedging fees. The baht is the best performing currency in Asia against the US dollar in 2017 to date.
The Bank of Thailand and the Monetary Authority of Singapore want to connect their national digital payment systems. Asian governments are increasingly interested in modernizing their payments systems and moving away from the use of cash.
The material contained herein is only provided for information purposes. No part thereof may be deemed to constitute legal advice or the opinions of this law firm or any of its attorneys. Whilst every effort has been made to verify the contents of the material contained herein, we do not represent, warrant, undertake or guarantee that the information contained in this newsletter is correct, accurate, or complete. Legal advice must be sought before acting on any information contained herein.