The Association of Southeast Asian Nations (ASEAN) comprises 11 countries: Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, Vietnam and, most recently, Timor-Leste.
Together, these countries form an increasingly interconnected market with multiple entry points for trade and long-term business growth. The market also serves as an advantageous location for those who aren’t in ASEAN.
“We’re currently seeing companies from all over the world but particularly from the United States of America (USA), the GCC region, China, South Korea, Japan, Germany, France, the United Kingdom (UK) and Australia as well as Canada making the most of the opportunities ASEAN presents for expanding into the region,” as noted by our Head of Middle East and Asia, Dario Acconci.
In this Expert Q&A, Dario shares some of the latest trends and developments he’s seen shaping businesses today, with key takeaways for companies considering expansion into ASEAN.
- How would you describe the sentiment of businesses already operating or expanding in ASEAN?
- There's also the Johor-Singapore special economic zone (JS-SEZ).
- As of 26 October 2025, Timor-Leste has also officially joined ASEAN. Do you think it'll be an area of interest?
- In your opinion, what are the ASEAN countries that are particularly attractive for business? You have mentioned Singapore. How about others?
- For a company planning to do business in ASEAN, how would you suggest they decide which country to start with?
- Are there any factors foreign companies should consider when choosing where to incorporate or invest first?
- And in your opinion, what are the common challenges that foreign companies face when expanding into ASEAN?
About Dario Acconci
As a key leader in Hawksford’s Middle East and Asia operations, Dario is responsible for driving strategic direction and strengthening the firm’s cross-regional presence. He has lived and worked in Hong Kong, Singapore and Dubai, and has spent part of his career at one of the world’s largest international law firms.
Dario brings extensive experience in helping clients identify opportunities, expand and manage operations in new jurisdictions. He continues to work closely with multinational companies across different sectors in their market entry efforts.
Dario holds a master's degree in law from the University of Milan and was a board member of several world-renowned fashion and luxury brands.
1. How would you describe the sentiment of businesses already operating or expanding in ASEAN?
Dario Acconci (DA): ASEAN has always presented great opportunities for investors from all over the world. However, it has often been overshadowed by the gravitational force and market attractiveness of China.
Multinational companies that have large budgets and strategic vision have the power to expand into more than one jurisdiction and will usually look at China as well as the rest of Asia, Japan and Australia because they have the means and understand the interconnected nature of markets.
In our experience, however, mid-sized companies – which are a very important segment of the world’s economy – don't necessarily have the strength, the strategy and the people on the ground to address a whole continent. So, what happened in the past was that they would then just focus on the biggest market: China.
Currently, as a consequence of the new US-led tariffs reality and the reshaped globalisation, the flow of new investments into China has slowed down. Many developed economies have taken the step of reassessing and planning for a Plan B international expansion and growth strategy.
The concerns then arise: how do I continue to pursue a new market knowing that I might have some difficulty getting into China?
Or, if I am already in China, how do I backstep some of my investments, without exiting, especially because I cannot produce everything in China to then export to the rest of the world. For example, the USA may not buy my products due to the tariffs.
This leads many jurisdictions needing a Plan B to be able to continue to address the Chinese market, but also produce at a lower, or maintained, cost for the rest of the world.
In this context, the vast majority of businesses started looking at other locations and regions, and I think ASEAN rose as a very strong alternative. Some of them also considered Eastern Europe, but the biggest contender has been Southeast Asia.
And within Southeast Asia, Singapore is a safe, reliable and knowledge-rich jurisdiction. Singapore can be a place where you can have your holding structures or regional functions, place your intellectual property (IP) ownership and conduct research and development (R&D) activities.
You can also use Singapore as the hub that buys from ASEAN factories and as a logistics centre to dispatch goods.
2. There's also the Johor-Singapore special economic zone (JS-SEZ).
DA: Yes, the JS-SEZ is a bilateral economic initiative between Johor in Malaysia and Singapore and is a step forward for ASEAN being established as a well-integrated market.
ASEAN is a large economy in aggregate. While it's divided into different countries that have an economic integration to the ASEAN treaties, it’s not at the level of the European Union (EU), for example, where you can set up in Italy and do business in Germany or you set up in Portugal and do business in Ireland.
So that's the beauty of the EU in a way; it's an almost fully integrated economy with freedom of movement for goods and people.
ASEAN is still a step back and this is the challenge, I think for ASEAN, as these are separate countries with their own borders, their own treaties to facilitate. And they're specialised in different areas.
3. As of 26 October 2025, Timor-Leste has also officially joined ASEAN. Do you think it'll be an area of interest?
DA: This was good news. Expanding into Timor-Leste might become of interest for the more adventurous and forward-thinking countries such as China and Japan.
However, a lot will depend on the strategic direction that the government takes in diversifying the economy away from its current dependence on oil, gas, and, to a lesser extent, agriculture. Chinese businesses might be more likely to move as they can typically digest the difficulties of developing jurisdictions and are often considering cheaper production costs.
Japanese businesses will likely seek to benefit from this inclusion as well. If you look at who were the pioneer investors into Southeast Asia, the Japanese were one of the first.
4. In your opinion, what are the ASEAN countries that are particularly attractive for business? You have mentioned Singapore. How about others?
DA: I must say, of all the ASEAN countries, I think there is one that stands out for me and that is Vietnam. Particularly because of the relationship between Vietnam and China; as they’re neighbouring countries, they have always heavily influenced each other.
The Chinese foreign direct investment (FDI) law was geared to make sure only serious investors came into China. Serious capital was committed, which was difficult to take away. Knowledge was brought in. Joint ventures were made in strategic sectors so the Chinese could learn.
Vietnam has adopted similar strategies. What you see in Vietnam today is what I’ve seen in China ten years ago. So, you already know where Vietnam is going in a way.
The country that has the biggest potential statistically is Indonesia. It is one of the largest in terms of population. There is potential growth as soon as their income increases, which we’re already seeing.
Malaysia is one that’s closer to the risk appetite of foreign investors. Malaysia has a common law framework with relatively low taxation and English is typically understood.
The countries that make up ASEAN are all emerging, but they all have different strengths. So, it's really case by case.
5. For a company planning to do business in ASEAN, how would you suggest they decide which country to start with?
DA: Over the last 20 years, from what I've seen with the foreign investors that we assist, there is often an opportunistic approach. The company abroad receives interest from an Asian or ASEAN country and they decide to put their focus there. The opportunity just came by. It was not really the result of a structured approach or study.
Of course, you must feel there is a commercial opportunity but, for foreign companies, I would suggest taking a period of one year, for example, to have someone spending time in the region. Maybe through a representative office or using the Employer of Record (EoR). This will allow the business to develop a first-hand understanding of the market, see suppliers and potential clients, and start having key conversations.
That year would be very well-spent in establishing the next step and finding the answers to questions that are so frequently considered when looking to expand: Which is the right country? Which is the right approach? What is the potential?
6. Are there any factors foreign companies should consider when choosing where to incorporate or invest first?
DA: I think the factors are always the same. Political stability, the stage of the economy, legal framework, double taxation agreements, and whether there is a potential for your product.
There are many factors they must take into consideration, commercial and non-commercial, to understand which might be a suitable jurisdiction.
7. And in your opinion, what are the common challenges that foreign companies face when expanding into ASEAN?
DA: When you consider Southeast Asia, you must also consider the sector that you want to operate in as well. For example, if you’re a shoe manufacturer, not every country is good for you to go and set up a shoe factory.
Malaysia, for example, is stronger in electronics. They will have the ecosystem, the supply chain for electronics. But for shoes, probably not.
ASEAN is also a very wide region made of many different countries. The biggest challenge is the mentality of foreign investors that often – but not always – have a short-term approach in the sense that they expect returns fast.
ASEAN is not a quick return jurisdiction. It's a jurisdiction that requires resilience and commitment, and then you will see the results.
Our role is to help clients in this journey. It's not only about the services we give, which of course are the foundation, but, even before that, making sure that our clients understand the challenges and can make informed decisions.
We provide our solutions from multiple offices across the region and, where we don’t have the physical presence, we have the expertise to guide our clients.
The Hawksford Expert Q&A series features commentary on market developments and industry trends that matter to our clients. Our subject matter experts across Hawksford share their views to help businesses navigate change and make informed decisions. Subscribe to our newsletter to get the latest insights. All information presented in this article is accurate at the time of publication.
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