30 Dec Dej-Udom & Associates Newsletter – December 2015Download PDF
The Dej-Udom & Associates Newsletter for December 2015
COUNTDOWN 2015 – ASEAN Economic Community
Asia Infrastructure Investment Bank
China’s Finance Ministry announced the formal establishment of the Asian Infrastructure Investment Bank (AIIB) which will be headquartered in Beijing and commence operations in early 2016. The bank’s Articles of Agreement became effective after the parliaments of 17 founding members who hold a 50.1% stake ratified the agreement. The bank has 57 founding members, 37 regional and 20 non-regional, including all ASEAN member states. The AIIB will provide infrastructure financing for the construction of roads, railways, and airports across Asia-Pacific. A major regional bank estimates that Asian countries will need USD 8 trillion in infrastructure investments over the next 10 years to sustain current economic growth rates.
Open Skies Stalled
The ASEAN liberalization of the aviation industry has stalled due to Indonesia and the Philippines not lifting all of the agreed to restrictions. Under the initial stage of the single aviation market plan, all ASEAN carriers would be able to fly freely from their home country to any other ASEAN city. Currently, Indonesia has only opened up Jakarta and the Philippines has opened all of its cities, but not Manila. All other ASEAN member states have lifted all restrictions.
Malaysia is liberalizing its visa application process and has launched a new e-visa program that will be available on January 2, 2016. The goal of the e-visa program is to encourage more visitors from China, India, the United States, and Canada to help stimulate the country’s tourism industry and the national economy.
Trade Restrictions Lifted
As a response to Myanmar’s first free elections in 25 years, the United States is easing trade restrictions for six months and allowing all shipments to go through the country’s ports and airports, even if controlled by entities on the US sanctions blacklist. Financing of shipments through the blacklisted trade hubs will also be permitted, but direct business between banks and the blacklisted firms is still banned.
Online Business Registration
Cambodia’s Ministry of Commerce introduced its new online business registration portal that will go live in January 2016. Local and foreign companies will be able to register their business in Cambodia online including doing a company name search, uploading shareholder and board of director information, and paying registration fees. Another separate online system for the issuance of certificates of origin will also launch in January 2016.
Cambodia signed a memorandum of understanding with Thailand earlier this month to complete a long-delayed railway line from Phnom Penh to Bangkok. Cambodia plans to complete the 6.5 kilometer line from Poipet to the Thai border by mid-2016 which will connect the rail networks of both countries. The railway line is part of the Singapore-Kunming Rail Link.
The Vietnamese government is encouraging businesses and government ministries to use electronic payment systems instead of cash payments. Cash still makes up 65% of all payment transactions in Vietnam.
Vietnam’s textiles and garments exports are expected to reach US$27 billion in 2015, up 10% from 2014. The United States remains the country’s largest market followed by Japan and the EU. Vietnam’s insurance market grew at 22% year-on-year with total revenue of US$3 billion. The country now has 61 insurance companies with 752 branches.
Malicious Spam Warning
Thailand’s Central Intellectual Property and International Trade (IP&IT) Court warns that its name and names of people associated with the court are being used in malicious spam emails sent to businesses and the general public. The emails ask the recipients to click on a link that will then download a virus which has caused considerable damage to many recipients. The court says that unless specific consent has been obtained, communications from the court will only come in the form of an official summons.
New Appellate Court
There has been a substantial change to Thailand’s court system to help cut down the caseload of the Supreme Court. The Specialized Court of Appeal was established on December 5, 2015, and now all cases coming from the Specialized Courts – Intellectual Property and International Trade, Bankruptcy, Taxes, Labour, and Juvenile and Family – are to be reviewed by the Specialized Appellate Court instead of being submitted directly to the Supreme Court. The main purpose of this new legislation is to tackle the persistent overloading of the Supreme Court with too many cases. Now, only cases valued as a benefit to the society can be heard by the Supreme Court.
Securities and Exchange
Laos’ Finance Ministry issued its first US dollar-denominated floating-rate notes in Thailand, worth THB6.5 billion. Thailand’s Ministry of Finance says that the success of this transaction shows the depth, strength and liquidity of Thailand’s debt capital markets in the increasingly integrated intra-regional capital markets.
404 Foreign Firms Approved
The Business Development Department approved 404 foreign firms to set up operations in Thailand in 2015 with a combined investment of THB16 billion. This should create approximately 9000 new jobs.
Award Winning Banknote
The new Thai 1,000 baht banknote and New Zealand’s new polymer bank note were jointly named Best Regional Banknote of the Year, a prestigious industry award which recognizes outstanding achievement in the design, technical sophistication and security of a banknote.
No Sovereign Wealth Fund
The Bank of Thailand (BOT) says it does not want to create a sovereign wealth fund; instead it plans to be more flexible in its management of Thailand’s foreign reserves for any volatility in 2016. While China and Singapore have had success with using sovereign wealth funds to create national wealth, the BOT does not believe that government projects should be financed with the Kingdom’s foreign reserves.
The Information and Communication Technology Ministry announced that its 2016 budget is THB 3.7 billion to drive the Kingdom’s digital economy’s flagship projects. The flagship projects are hard infrastructure, soft infrastructure, service infrastructure, promotions and innovation, and the digital society and knowledge. The ministry expects the projects to produce over 10,000 IT-skilled employees in the next five years and more than 40,000 innovative and ideas-driven employees in the next 10 years.
IP Registration Warning
Thailand’s Department of Intellectual Property (DIP) is warning businesses to register their intellectual property (IP) before trading in local and international markets. The DIP says that the IP rights of Thai businesses are being infringed upon in foreign countries due to poor registration practices.
Land and building appraisals will increase 27% on average around the Kingdom in 2016. The highest per square wah is the Silom Road area; the lowest is Chiang Mai.