Business in Southeast Asia: A Guide for Investors

Tourism, service industries, manufacturing, construction—these very different areas of business activity share something in common: every company pays for office or production space, utilities, employee salaries, and taxes. For an experienced entrepreneur, these and other factors discussed below are key criteria when choosing a location for a business.

There are many opinions suggesting that Thailand cannot compete with China in manufacturing, Vietnam in tourism, or Cambodia—simply because “it is like Thailand 20 years ago, and therefore better.” However, statistics suggest otherwise.

We will not compare Thailand with Russia, Europe, or the United States, as such choices are usually obvious. Instead, we will look at China, Vietnam, Cambodia, Singapore, Myanmar, and Thailand—countries within the same region but at different stages of economic development. While China is not part of ASEAN, it remains relevant for comparison. The rest are ASEAN members (Association of Southeast Asian Nations), which also includes Laos, Indonesia, the Philippines, and Brunei.

TAXES

One of the most indicative criteria. Without diving deeply into each country’s tax system, we will focus on the key taxes.

Corporate Income Tax

Thailand: maximum rate 20%. For SMEs, a progressive system applies:
up to $5,000 – 0%
$5,000–$33,000 – 15%
above $33,000 – 20%
Singapore: 17%. For profits up to SGD 10,000, only 25% is taxable;
up to SGD 300,000 – 50%; above that – fully taxable
Vietnam: 25%
Cambodia: 20%
Myanmar: 25%
China: 33%

Value Added Tax (VAT)

Thailand: 7%
Singapore: 7% (called GST)
Vietnam: 10% standard, 5% for certain sectors (e.g., food)
Cambodia: 10%
Myanmar: 5–30% (called commercial tax)
China: 17% standard, 13% for certain goods, 3% for small businesses

MINIMUM WAGE (CAPITAL / CENTRAL REGIONS)

Thailand: As of 2013 – 300 THB ($10) per day.
For foreigners: 35,000–50,000 THB/month depending on nationality
Singapore: no legally defined minimum wage
Vietnam: 2,350,000 VND (~$113/month)
Cambodia: 336,000 Riel (~$80/month)
Myanmar: 2,000 Kyat (~$2.1/day)
China: 1,600 RMB (~$260/month)

OFFICE RENT (CAPITAL CITIES)

Thailand (Bangkok): $28 per sqm/month
Singapore: $88
Vietnam (Hanoi): $42
Cambodia: $20
Myanmar (Yangon):* $78
China (Beijing): $163

* Although Naypyidaw became the capital in 2005, Yangon remains the business center.

LAND OWNERSHIP AND USE

Thailand: Foreigners cannot directly own land (except via BOI promotion).
Alternatives: long-term lease (up to 30 years, renewable twice) or ownership via a Thai company (foreign shareholding up to 49%).
Singapore: Land ownership by foreigners is restricted and requires government approval.
Vietnam: Land is state-owned; leases up to 50 years.
Cambodia: Similar to Thailand; foreigners may own shares in a company holding land.
Myanmar: No land ownership; leases up to 50 years (+10+10 extensions).
China: State ownership; leases up to 50 years for business use.

INVESTMENT CLIMATE

Most ASEAN countries actively attract foreign investment by offering incentives.

Thailand

Tax incentives: corporate tax exemption up to 8 years, import duty exemptions
Non-tax incentives: 100% foreign ownership, land ownership rights (under BOI), simplified licensing and work permit procedures

Singapore

Various tax incentives, including reduced rates and full tax exemption for up to 15 years for high-tech industries

Vietnam

Tax holidays up to 4 years, 50% tax reduction up to 9 years

Cambodia

Tax exemption up to 9 years, import duty exemptions, accelerated depreciation (40%)

Myanmar

Tax holidays up to 5 years (extendable), accelerated depreciation, tax parity for foreign investors, import duty exemptions

China

Reduced corporate tax (15%), tax holidays up to 2 years, additional 50% R&D deduction

CONCLUSION

Based on the data above, it is difficult to declare a single “winner.” Each business has its own specifics and priorities when choosing a country.

However, considering all factors combined, Thailand currently holds a leading position. This position is expected to strengthen further with the development of the ASEAN Economic Community.