Each ASEAN country presents a different legal and regulatory framework. Unexpected regulatory changes pose a risk in some ASEAN markets. It is crucial that companies planning to expand into the region first obtain professional advice to better understand these frameworks. Austrade and AustCham ASEAN can assist Australian businesses with referrals on the ground. Australia's free trade agreements (FTAs) may provide market access opportunities or protections to Australian businesses operating in the region. They can also help provide certainty and stability for businesses operating in unfamiliar regulatory environments. Different FTAs apply in different countries. It's important for companies to evaluate the landscape of FTAs to determine how their business can benefit from relevant bilateral and regional FTAs in specific markets. Through the Department of Foreign Affairs and Trade's FTA Portal (ftaportal.dfat.gov.au), Australian businesses can obtain free information on tariffs pertaining to our FTAs to help them identify opportunities in specific markets. The Portal includes information on using Australia's FTAs to trade with the ASEAN region, including our region-wide FTA (AANZFTA), and our FTAs with Malaysia (MAFTA), Singapore (SAFTA) and Thailand (TAFTA). The Portal also includes an interactive tool to help businesses decide whether a bilateral or regional FTA offers the best access for their exports. For information about standards and how to comply with them, companies should consult several Australian bodies including the National Measurement Institute, Standards Australia, National Association of Testing Authorities and the Joint Accreditation System of Australia and New Zealand (JAS-ANZ). They engage closely with their ASEAN counterparts and are a useful source of information.
In some ASEAN countries, corruption poses challenges. Bribery of foreign public officials is a crime and Australian individuals and companies can be prosecuted in Australia or overseas for bribing foreign officials when overseas. Australian businesses also need to be aware of how anti-bribery laws in other countries may apply to them, including laws around facilitation payments. The Australian Government's Foreign Bribery Information and Awareness Pack provides further information. ag.gov.au/CrimeAndCorruption/Foreignbribery/Pages/default.aspx
Although most ASEAN countries have enjoyed sustained economic growth, there are always financial risks associated with emerging economies that investors must consider. Restrictions on foreign investment and anti-competitive practices continue to undermine the potential of many ASEAN markets. And while lower labour costs in many countries might help make operations more competitive, this doesn't always compensate for lower levels of productivity.
Extreme poverty has declined markedly across the region. Nonetheless, poverty and underdevelopment persist in several ASEAN countries. Businesses will need to consider how this affects labour hire decisions in relation to the availability of qualified and experienced personnel, local labour laws, and how firms interact with local and national governments. Electricity, water and transport infrastructure are underdeveloped in a number of regional areas, and capacity continues to lag demand. Weak transport infrastructure also hinders the development of regional value chains. Businesses will need to plan their route to market.
5 Consider political instability and security risksThere are unresolved territorial disputes in the Indo-Pacific region and several states in ASEAN face internal security challenges. Australian businesses should monitor the political situation in individual countries, assess the risks associated with business activities, and take appropriate precautions. Travellers should consult official government advice, and register their travel, at smartraveller.gov.au
Australian business culture is highly transactional in nature; this isn't the case in many ASEAN countries. Some of the most successful businesses have been present in ASEAN markets for decades. Commitments of time and empathy are needed when approaching cultural borders, particularly if business activities straddle multiple markets. This is a complex area, but it deserves attention at the highest levels of the organisation. Austrade provides an overview of many export markets, including information on business culture, at austrade.gov.au/Australian/Export/Export-markets/Countries Further information on business culture is available from Asialink Business Country Starter Packs. Asialink Business has produced a report on developing Asia capability in Australian businesses. asialinkbusiness.com.au/country-starter-packs
Working with reputable local partners, clients and customers and taking the time to develop deep, long-term relationships will substantially reduce the risks associated with operating in the region. Dissolving relationships is a complicated process in most ASEAN countries, and extricating yourself from an unwise choice can be difficult. Take your time and use all the resources at your disposal to satisfy yourself of the credentials of your business partners and their fit with your strategy and corporate values. Run your business to international standards. Ensure that business decisions are supported by robust due diligence and risk management processes. 'Think local' about the market, but approach governance and corporate social responsibility from an Australian perspective. This will open doors within ASEAN markets.
These great tips have been produced by Austrade, read more here: https://www.austrade.gov.au/asean-now/doing-business-in-asean/seven-practical-tips-for-success-in-asean/