Mon, 03 Feb 2003

ASEAN liberalizes investment rules

The Jakarta Post, Jakarta

Member states of the Association of Southeast Asian Nations (ASEAN) decided to accelerate the liberalization of their investment regimes by broadening the scope of economic activities in which ASEAN investors would be given national treatment.

Meeting in Jakarta last week, the ASEAN Coordinating Committee on Investment has agreed to phase out the "temporary exclusion list" of products in the manufacturing sectors in Brunei Darussalam, Indonesia, Malaysia, Myanmar, the Philippines, Singapore and Thailand.

According to a media release issued on Friday by the ASEAN secretariat, the decision means that any ASEAN investor can now invest in the manufacturing sector of any ASEAN country and enjoy national investor treatment.

Since the launch of the ASEAN Investment Area in 1998, Southeast Asian states have started opening up all industries for investment and granted national treatment to ASEAN investors, but with some exceptions.

The exceptions are supposed to be phased out by 2010 for ASEAN investors.

Meanwhile, the newer member of ASEAN, namely Cambodia, Laos and Vietnam, have until Jan.1, 2010, to phase out their temporary exclusion list for the manufacturing sector.

The establishment of the ASEAN Investment Area is expected to encourage investors to think increasingly in regional terms and adopt a regional investment strategy and network operation.

The scheme aims to promote a more efficient division of labor and industrial activities across the region, creating opportunities for greater industrial productivity and cost competitiveness.

The release said that ASEAN investors were defined as being equal to national investors in terms of the equity requirements of an ASEAN country in which the investment was made. Thus, an ASEAN firm with a majority interest could avail itself of national treatment and investment market access privileges.

Newly opened areas for ASEAN investors

Brunei: Manufacture of veneer sheets, plywood, laminaboard, particle board, other panels and boards, and builders' carpentry.

Indonesia: Manufacture of pesticides.

Myanmar: Manufacture of pulp of all kinds, production and marketing of basic construction materials, furniture, and parquet, using teak extracted and sold by the state-owned economic enterprise.

Thailand: Production of flour from rice and field crops.

Philippines: ASEAN equity will now be allowed in cooperatives.

- More than 40 percent ASEAN equity could be allowed and export requirement would be relaxed for domestic market enterprise with paid-in capital of less than the equivalent of US$200,000 and domestic market enterprises that involve advanced technology or employ at least 50 direct employees with minimum paid-in equity capital of less than $100,000.

- Investment incentives could be availed for companies registered under the Omnibus Investment Code (E.O 226) with more than 40 percent ASEAN equity.