Master preemptive opportunity in Southeast Asia Market

With clients’ sights set on Southeast Asia market, Triple Team specialists not only assist clients in the matter of business registrations, but also provide them with the most comprehensive investment and taxation advices available.

Indonesia

Overview

Indonesia is located in Southeast Asia, the world's largest island country and the fourth most populous country with population of over 258 million. Indonesia is a member of Association of Southeast Asian Nations. The official language is Indonesian, and the second spoken language is English. Its capital is Jakarta where is the center of economics, culture and politics of Indonesia, and many government offices, congresses, foreign embassies and branch offices are located there.

Since 2010, the main sector of the labor force is services followed by industry and agriculture. Indonesia was the 26th biggest exporting country in the world in 2015. The country has extensive natural resources, including crude oil, natural gas, tin, copper, and gold. Indonesia's major imports include machinery and equipment, chemicals, fuels, and foods, and its major exporting commodities are oil, natural gas, electrical appliances, rubber, and textiles. Moreover, the country has an abundant of labor force that allows laborers to work abroad for the labor-intensive industries in foreign countries each year, e.g. Taiwan.

Indonesia Investment Information

Indonesia Investment Authority

Indonesian Investment Coordinating Board of the Republic of Indonesia/Badan Koordinasi Penanaman Modal (BKPM)

Investment Type
  • Foreign-owned entity, Joint Venture entity, Representative Office
  • Foreign-owned entity: Foreign investors can 100% fully own stock right
  • Joint Venture entity: Foreign investors in Indonesia engaged in business must co-operative with local individual/company. Generally, the foreign shares cannot account for more than 49 percent of the JV’s total shares
  • Representative Office
Company Setup Condition
  • Director(s): at least 1 person (with any nationality)
  • Shareholder(s): at least 2 persons (with any nationality)
  • Minimum paid-up capital: IDR$25 billion (about US$220,000) 
Taxation
  • Corporate Income Tax: 25%;
  • Individual Income Tax: 5~30%;
  • Business Tax: 10%;
  • Withholding Tax: 20%
Purchase of Real Estate

An Indonesian wholly foreign owned enterprise can own land; the duration of land leasing contract is extendable.

Foreign Exchange Control

N/A

Tax Incentives

Tax Credit: Under certain criteria, 30% of the investment of fixed assets could be credited against corporate income tax during the 6-year period.

Procedures of Company Setup

  • Prepare Registration Form and Required Document
  • Apply to BKPM for Investment Registration Letter
  • Notarized Article of Association by Ministry of Justice and apply for Notarial Certificate
  • Apply for Tax Identification Number
  • Apply for Business Registration Certificate
  • Apply for Analysis Mengenai Dampak Lingkungan(AMDAL)
  • Prepare Business Plan
  • Prepare above required documents and apply to BKPM for investment approval
  • Apply for IUT,after the Investment Approval Letter is issued

Required Documents

Offshore holding company:

  • Copy of Passport and ID of Director(s) and Shareholder(s)
  • Letter of Appointment of Indonesian company to appoint legal representative
  • Certificate of Incorporation and Article of Association (Legalized by Indonesia Embassy)

Indonesian company:

  • Copy of Passport and ID of Director(s) and Supervisor(s)
  • Photo of Director(s)
  • Office leasing contract
  • Business Plan
  • Total investment, registered capital, business scope, name of proposed company, business duration
  • Compliance Declaration of Director(s)

Vietnam

Overview

Vietnam is the easternmost country on the Indochina Peninsula in Southeast Asia. It is bordered by China to the north, Laos to the northwest and Cambodia to the southwest. The capital is Hanoi and the largest city is Ho Chi Minh City. The population of Vietnam is at approximately 90 million and the official language is Vietnamese. The country is a member of ASEAN, WTO and the Asia-Pacific Economic Cooperation.

Vietnam is the 6th largest economy in the 10-member ASEAN. Its economy relies largely on manufacturing industry, mining industry, construction industry, real estate industry and banking and finance. According to the statics from General Department of Vietnam Customs, its main export partners in 2017 are China, United States, Japan and South Korea, and the main export goods are the clothing and textiles, shoes, rice, crude oil and marine products. Korea is the biggest foreign investor in Vietnam, followed by Singapore, China, and Taiwan.

Investment Types

  • Foreign-owned entity: Foreign investors can fully own (100%) stock right.
  • Contractual Arrangement: The investment in a Business Cooperation Contract (BCC) is a cooperation agreement between foreign investors and the Vietnamese partners. The foreign-owned capital can’t exceed 70%.
  • Representative Office (RO): The activities of a RO are limited to business promotion and acceleration of trade opportunities (business conducts are prohibited).

Requirement of Company Setup

Content Rep. Office Wholly Foreign-Owned Enterprise Subsidiary
Minimum director 1 1 1
Minimum shareholder - 1 1
Minimum capital (US$) - $100,000 $100,000
Business Income Tax 17%、20% 17%、20% 20%
Personal Income Tax 5%~35% 5%~35% 5%~35%
Tax Incentive Program - Encouraged business sector enjoys 4 years of tax exemptions and 5 subsequent years of 50% reduction.
Newly established business enjoys 2 years of tax exemption and 4 subsequent years of 50% reduction.
Business locates in difficult socio-economic areas enjoys 4 years of tax exemption and 9 subsequent years of 50% reduction.
Domestic owned 0% 0% 0%
Foreign owned 100% 100% 100%
Setup lead time (month) 2 3~4 3~4
Setup location Nationwide Nationwide Nationwide

Procedures of Company Setup

  1. Set up offshore holding company
  2. Prepare holding company documents
  3. Proposed company name reservation
  4. Vietnam company's Article of Association & Application form
  5. Documents approved by authorities
  6. Granting Investment Registration Certification
  7. Public announcement
  8. Company seal registration and bank account opening
  9. Registration for Tax Code,HS Code,Disaster Prevention and Environmental Protection

Required Documents of Trading Company Setup

Offshore Holding Company

  • Copy of Passport of Director(s) (legalized by Vietnam Embassy)
  • Copy of ID of Director(s) (legalized by Vietnam Embassy)
  • Certificate of Incorporation, Article of Association, Appointment of First Director(s) and Register of Directors/Members (legalized by Vietnam Embassy)
  • Bank reference letter (original of English version)
  • Resolution of Directors and Members (legalized by Vietnam Embassy)

Vietnam Trading Company

  • Copy of Passport of legal representative (legalized by Vietnam Embassy)
  • Copy of ID of legal representative
  • Original of Office leasing contract (legalized by Vietnam Embassy)
  • The method of investment contribution (equipment list, if any)
  • Estimation of public utility usage amount (such as, water, electricity and drain)
  • Recruitment report (local and foreign employees)
  • Company name, total investment, registered capital, business scope and business term

Malaysia

Overview

Malaysia has a population of about 31 million with 67.4% of Malays, 24.6% of Chinese, 7.3% of Indians and 0.7% of other ethnics. Malaysia is a multi-ethnic country and the groups live in peace; the political and social setting is relatively stable. Kuala Lumpur is the capital which is the political and economic center of Malaysia with the population of about 1.73 million; Penang is a state located in the northwest coast of Malaysia and it is known for electronics industry with factories set up by many Taiwanese entrepreneurs. Malaysia’s another large city is Bandaraya Johor Bahru, the capital of Johor, lately has fast-growing economy and intensive relationship with Singapore due to the link of Johor-Singapore Causeway between Johor Bahru and Singapore.

The top 5 main industries are Manufacturing Industry (electrical & electronic and chemistry), Agriculture (palm oil) and Mining (crude oil and natural gas). The amount of export in 2015 was around US$181.8 billion and its major export goods include electronic and electrical products, chemical products, refined petroleum products, liquefied natural gas, palm oil, machinery and spare parts, metal products, optical & scientific instruments, crude oil and rubber products. The main export partners of Malaysia are China, Hong Kong, Singapore, Korea, Japan, Thailand, Indonesia, US and Australia.

Setup requirement

  • For foreign company that sets up and carries on business in Malaysia, it’s required to file the registration form to Suruhanjaya Syarikat Malaysia (SSM), the Official Portal of Companies Commission of Malaysia, and pay MYR30 for the company name reservation. If the company name is available, it’s permitted to submit required documents. (Company registration fees can differ depending on the amount of the authorized capital)
    • Copy of Legalized Certificate of Incorporation from the original country of registry
    • Legalized Certified Memorandum of Association and Articles of Association
    • Register of Director(s) and related legal details
    • If the local director is needed- it’s permitted to file a Memorandum specifying the power of the local director
    • Letter of Appointment or Power of Attorney
    • An affidavit of company’s Registered Agent
  • Foreign company shall register for Registered Office from SSM within 1 month after company’s setup or start for operation.
  • For foreign company, it’s required to file annual financial report within 1 month after holding the annual general/board meeting and file Balance Sheet and audit report within 2 months, specifying assets and liabilities related to business operation in Malaysia and Income Statement.

Procedures of Investment Application

  1. Apply to the Official Portal of Companies Commission of Malaysia for Investment registration
  2. Apply to MIDA for Manufacturing Licence,Tax incentive & expatriate posts
  3. Apply for land with Building Plans Certificate issued by MIDA
  4. Designed drawing by the architect and apply for related application form State levels and specify public facilities(such as water supplies,electricity and telecommunications)
  5. Factory construction
  6. Apply for Business Licence
  7. Apply to MIDA for technical/joint-ventures permit;duty free import of enginery & equipments and raw materials
  8. Import of machinery and equipments
  9. Factory operation

Malaysia Taxation

Corporate Income Tax

SME (Small and Medium Enterprises) which has registered capital less than MYR2.5 million, first MYR500,000 of net profit will be reduced to 19%, the profit exceeding MYR500,000 will be 24%.

Individual Income Tax:

1% - 28%

Thailand

Overview

Thailand has a population of about 68 million with the majority of Thai and the rest are Chinese, Malays and Indians. The official language is Thai and other languages are Chinese, English and Malayan. Thailand’s prevalent religion is Buddhism and the others include Islam, Hinduism and Christianity. Its education system is with 9 years of compulsory education.

Bangkok is the capital and the most populous city with population of about 8.25 million. There is very little crime in Thailand except few military coups occurred in some regions. In the year of 2016 in Thailand, Thai GDP is US$406.9 billion and the top 5 main industries are automotive, electronics, jewelry, rubber and chemical industry.

The amount of export was around US$227.5 billion and its major export goods include computers and electrical appliances, integrated circuits, rubber, rice, automobile spare parts, metal products, jewelry, fishery and meat products, petrochemical products, moto vehicles and textiles, etc. The main export partners are ASEAN countries, China, Hong Kong, Korea, Japan, India, US, EU, Middle Eastern countries and Australia.

Investment Information

Investment Types

Sole Proprietorship, joint venture company and limited company. The most common investment type for foreign investor is Private Limited Company.

Setup requirement for limited company

  1. Limited Company needs at least 3 subscribers. It is required to draft a memorandum, assemble statutory meeting and register to Department of Business Development (DBD). It is also permitted to apply to Ministry of Finance for company’s Tax Certificate and Tax Identification Number (Tax ID).
  2. Minimum capital: If the foreign companies operate businesses that are in the schedules annexed to the Foreign Business Act and the share of foreign investors exceeds 51%, the minimum capital must be no less than 25% of one-year average of the three-year expenditure forecast or at least 3 million baht per business. If the foreign companies operate businesses that are not in the schedules annexed to the Foreign Business Act, the minimum capital is 2 million baht. If there are foreign workers, the companies shall follow the other related minimum capital requirements.
  3. Related financial report shall be made according to the regulations of Civil Code and Chamber of Commerce/Business Accounting Regulations. In addition, annual balance sheet shall be filed to DBD and Tax Authority.

Procedures of Company Setup

  1. Prepare Memorandum of Association and file to Companies Registry of Ministry of Commerce. The memorandum shall contain the company name, company address, business scope and total investment.
  2. Assemble statutory meeting
  3. Application for Registration
    Submit application and pay for the registration fee within 3 months after the statutory meeting.
  4. Taxation Registration
    Collect Tax Certificate and Tax ID from Revenue Department within 60 days after company incorporation or the day company starts to operate.

Thailand Tax Rate

Corporate Income Tax:

20% for ordinary company; 15% for small company with paid-up capital under $50,000 baht, and net profit not exceeding 1 million baht.

Individual Income Tax:

rates (5%, 10%, 15%, 20%, 25%, 30% and 35%) will differ from net income ranks.