ASEAN Insights: Fintech And The Role Of Technology In The Region.
Legal News & Analysis - Asia Pacific - ASEAN - Regulatory & Compliance - FDI
21 December, 2018
The legislative developments in the four main manufacturing and export-oriented economies of The Association of Southeast Asian Nations (ASEAN) – Indonesia, Malaysia, Thailand and Vietnam – are increasingly targeting Foreign Direct Investment (FDI) further up the technology tree.
Many see the rise of developments in the fintech space as playing a central role in unlocking ASEAN’s potential, not only in the deployment of new technologies and innovative solutions across the payments, insurance and financial services sectors, but in the development of a regional ecosystem that will provide for greater co-operation and collaboration across geographies and markets.
The use of technology to connect the region is seen as paramount, and the recent signing of a new e-commerce agreement at the 17th ASEAN Economic Community (achieved after nine rounds of negotiations which commenced in June 2017) is seen as further evidence of the region’s commitment to digital solutions.
Governments such as Singapore's have invested heavily in the development of a fintech ecosystem, having made a strategic decision that fintech solutions will play a critical part in the future of the region.
Recently implemented laws across the region identify specific priority sectors for incentivisation and in Vietnam’s case, pursue technology transfer objectives and development of local supply chains that will benefit SMEs.
In recent decades, Malaysia has transformed into a manufacturing and service-based, export-driven economy spurred by high-tech, knowledge-based and capital-intensive industries. To continue moving the country forward, the previous government unveiled a new principal hub incentive (PHI) scheme in early 2015, targeting support for the country’s continuous growth as a regional investment destination.
The newly installed Malaysian Government looks set to continue its commitment to introducing new tax incentives and extending selected existing tax breaks that will channel FDI into specific sectors and regions in Malaysia. For example, the government has introduced tax incentives for green technology to further strengthen and develop the industry.
To read more about developments and trends in ASEAN please see 'ASEAN Insights – a report for business on the regional policy and regulatory environment'.
For further information, please contact:
Ik Wei Chong, Partner, Clyde & Co