Doing Business in Southeast Asia

There are a variety of factors that can be measured when considering how difficult or easy it is to start a business and do business in a country or region. By measuring these factors, we can determine if the country or region is a great place to do business.

Factors to consider:

• Availability of electricity and other utilities
• Availability of credit
• Financial factors such as taxation, availability of investors, and protection for investors
• Bureaucratic factors such as permits required for construction, zoning, registrations required, and other legal permits
• Legal considerations such as the ability to enforce contracts, the ability to purchase insurance, requirements for hiring, etc.
• International factors such as the ability and ease of trading across borders, shipping considerations, and so on.

Based on this, the group Doing Business, part of the International Finance Corporation, has rated world countries for their ease of doing business, and this article focuses on Southeast Asia results.

Within Southeast Asia, Thailand is the mostly highly-rated country, coming out #17 in the world. Paying taxes is the biggest barrier to do business, but infrastructure (namely utilities) is not a problem, contracts are readily enforced, and construction permits are not an impediment.

The second most highly-rated country in the region is Malaysia. At #18, it sits just above Germany in the world rankings. Getting credit is easier in Malaysia than anywhere on the globe, and investors are well-protected.

The worst country in the region for business is Laos (a.k.a. the Lao People's Democratic Republic). Virtually every factor on the list is problematic.

Vietnam is rated quite badly for starting a business. Getting electricity is a particularly egregious problem, with protecting investors and paying taxes serious problems as well.

Indonesia is also rated quite low, with primary problem areas being electricity, resolving insolvency, and enforcing contracts.