Southeast Asia: The next hub for multinational companies
With its strategic location, rising population and increasing tech savvy, the region is an appealing place for expansion. But it still presents some challenges.
Located at the centre of the broader Asia-Pacific region, Southeast Asia collectively is the world’s third-most populous economy. Several Southeast Asian countries are well-positioned to be hubs for multinational companies.
Our presence in Southeast Asia
Among the member countries in the Association of Southeast Asian Nations (ASEAN), J.P. Morgan maintains a presence in:
- The Philippines
ASEAN countries’ combined GDP, which ranks fifth globally after the U.S., China, Japan and Germany
Total population of ASEAN countries; if it was a single country, ASEAN would be the third largest in the world
What’s driving growth in Southeast Asia
Southeast Asian countries are working to integrate their economies with one another and attract foreign investment through ASEAN. The countries’ rapid growth is propelled by a handful of forces including a fast-rising population and a global shift toward supply chain diversity.
An untapped consumer market: Southeast Asia will add about 140 million new consumers by 2030, according to a World Economic Forum report on ASEAN. By that time, about 1 in 6 consuming households globally will be in Southeast Asia.
- Proximity to China: Southeast Asia has grown in popularity as multinationals seek to diversify their supply chains and take advantage of low-cost labour. Thanks to their population growth and proximity to China, Southeast Asian countries are a convenient location for companies looking to expand their Asia-Pacific operations.
- A digital moment: Across Vietnam, Thailand, the Philippines, Malaysia, Singapore and Indonesia, the internet economy—including e-commerce, food delivery and financial services—is expected to approach $360 billion in gross manufactured value by 2025, according to research by Google, Temasek and Bain & Co.
A trade partner: Southeast Asian countries have worked to reduce trade barriers within the region and across the globe. In 2022, the region’s countries ratified the Regional Comprehensive Economic Partnership (RCEP) a free-trade agreement with Australia, China, Japan, New Zealand and South Korea. RCEP created the world’s largest free-trade area covering 30% of the world’s population.
A favourable business environment: Building on centuries as a strategic shipping hub, Singapore is now a valuable digital hub as well. Businesses are drawn to Singapore’s independent government, strong legal system, sophisticated digital infrastructure and deep talent pool.
Mahesh Kini, Head of International Banking Asia Pacific, J.P. Morgan
Challenges in Southeast Asia
Even with the upside of a growing population and positive economic momentum, Southeast Asia still faces challenges in creating a frictionless political economic union. Across ASEAN’s 10 countries, for example, there’s no shared currency and no open borders as in the European Union. Each country maintains its own financial regulations, complicating the movement of funds. At one end of the spectrum is Singapore and its minimal regulations. On the other, Vietnam is highly regulated. In between, Indonesia, Malaysia, the Philippines and Thailand are moderately regulated.
How J.P. Morgan can help
As businesses digitise and transform the supply chain, we have a host of solutions to offer in Southeast Asia, ranging from core payment solutions, tax and utility services, real time / virtual solutions, supporting e-commerce platforms, API integration to real-time treasury.
J.P. Morgan has a long history in this region. When establishing a new franchise or expanding the existing capacity in Southeast Asia, it helps to have a banking partner with extensive local know-how.
J.P. Morgan’s International Banking team offers solutions that scale to your business and its global aspirations.
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