What’s hot in Southeast Asia in 2021: the region’s biggest business opportunities

Southeast Asia (SEA) is a region of over 670 million people and is home to many emerging markets. This region also consists of a 10-member economic powerhouse, called the Association of Southeast Asian Nations (ASEAN), that helps the region drive its economic growth. Set up in 1967, ASEAN had its goals of maintaining close and cooperative relationships to promote peace, stability, and financial growth.

The list of the 10 countries in ASEAN are:

  1. Brunei Darussalam
  2. Myanmar
  3. Cambodia
  4. Philippines
  5. Indonesia
  6. Singapore
  7. Laos
  8. Thailand
  9. Malaysia
  10. Vietnam

However, not all countries grow at equal rates given the difference in population size, regulations, and availability of natural resources. As such, we have compiled some things you need to know to seize ASEAN’s untapped market potential.

In this article, we will firstly go market-by-market to show you the booming opportunities and some challenges of doing business in the respective countries. Then, we will zoom out to share some insights on how to better tap into the business opportunities in SEA using business indexes that you may already be familiar with.

What are the key opportunities of the ASEAN nations?


City landscape of Indonesia
Photo by Tom Fisk from Pexels


Starting off with Indonesia, the largest economy in the Southeast Asian Region. With over 17,00 islands and over 276 million people, the diversity in this archipelagic market itself is already so attractive to foreign entrepreneurs.

Overview of doing business in Indonesia

Top 3 fast-growth industries in Indonesia:

  1. E-commerce
  2. Fintech
  3. Manufacturing and infrastructure sector

According to the World Bank’s Ease of Doing Business Index 2020, Indonesia was ranked 73 out of 190 economies, slightly just behind Vietnam. Despite that, there have been efforts by the Indonesian government to ease the processes in recent years. One example is the introduction of the Online Submission System in 2018, where business licensing is more straightforward and easier to obtain.

Another huge event that happened in March 2021 is the introduction of the Omnibus Law, which we have also covered in our recent articles. We talked about its effects on foreign investors and how this change has opened up more business opportunities in this market.


City landscape of Malaysia
Photo by Nour Betar on Unsplash

Next up, Malaysia! With a population of over 32 million people and a per capita gross national income of $11,230 (2019), Malaysia’s corruption perception level comes in second in the Southeast Asian region. This country’s geographic and racial diversity is also noteworthy when doing business there.

Overview of doing business in Malaysia

ABF media

Top 3 fast-growth industries in Malaysia:

  1. Service sector
  2. Manufacturing
  3. Construction

Some business challenges, as stated by TMF Group, that your business may face are the long processes when registering for work permits and when setting up your business. Additionally, dealing with taxes in Malaysia could also be a long and tedious process.

We have previously also written an article on The Ultimate Guide to Incorporate A Company in Malaysia 2021. Do give it a read if you are interested in a  compiled list of guides to enter into Malaysia.


City landscape of the Philippines
Photo by OJ Serrano on Unsplash

The Philippines is another country with an archipelagic market as well making it an attractive place for investors. With about 110 million people spanning over 7,000 islands, it is no doubt that this market holds promising business opportunities as well. The Philippines has achieved consecutive years of positive GDP growth of about 6 percent each year.

Moreover, according to a report by the Nielsen Company, 67% of the Philippines’ population is made up of young people, aged less than 35 years old. This young and growing labor force also contributes to the emerging middle class that we see today.

Overview of doing business in the Philippines


Top 3 fast-growth industries in the Philippines:

  1. Business Processing Outsourcing (BPO) and
  2. Information Technology
  3. E-commerce

Some would consider the government regulations and weak market maturity as a couple of challenges businesses might face. However, through an interview that we have done with Paolo Rentero, the co-founder of Digiteer and TechShake, we see that B2B markets are experiencing huge growth and this is a much easier way to do business.


City landscape of Singapore
Photo by Timo Volz from Pexels

Although Singapore is only a “little red dot” in the SEA region, yet has fiercely remained as the top country in SEA in their ease of doing business and innovation. Although the population is only close to 6 million people, its principal resource is still talent. With a land area of only 725.7 km², Singapore has a per capita gross national income of $59,590 (2019).

Overview of doing business in Singapore

Top 3 fast-growth industries in Singapore:

  1. Fintech
  2. Cybersecurity industry
  3. Health and fitness industry


City landscape of Vietnam
Photo by Peter Nguyen on Unsplash

Many investors are setting their sights on entering Vietnam, especially if you’re interested in manufacturing, F&B, and the retail industry as there is a growing interest in these business sectors. Vietnam has a population of close to 98 million people and has a relatively young population with about 46% of the people in the labor force.

Overview of doing business in Vietnam

Top fast-growth industries in Vietnam:

  1. E-commerce
  2. Electronics
  3. Manufacturing

According to the TMF Group, to start a business in Vietnam requires 10 procedures which makes this country the most complex start-up environment. We will also see this in how Vietnam has a score of 85.1 out of  on the World Bank’s Ease of Starting a Business 2020.


City landscape of Thailand
Photo by Andreas Brücker on Unsplash

The Kingdom of Thailand is Southeast Asia’s second-largest economy and has a population of nearly 70 million people. In 2018, the Thai government also introduced the Eastern Economic Corridor (EEC) in hopes to develop its eastern provinces for trade and investment in the ASEAN region.

Overview of doing business in Thailand

Top 3 fast-growth industries in this region:

  1. E-commerce
  2. Automotive and manufacturing
  3. Infrastructure

How do these Southeast Asian markets compare?

In OECD’s report on the Economic Outlook for Southeast Asia, China, and India 2020, we see that in the Southeast Asian region, Myanmar, Cambodia, and Vietnam made the most rapid economic growth. These countries had the highest GDP growth of 6.9%, 6.7%, and 6.2% respectively and are projected to have a GDP growth ranging from 6.5% to 6.9% from years 2020 to 2024.

OECD 2020 report
Image source: OECD’s Economic Outlook for Southeast Asia, China, and India 2020 report‌‌

In this section, we will compare the 6 countries above from their ease of doing business to how well their economy innovates. We have also compiled a summary table at the end of this article showcasing the rankings of each country against the index.

We will be looking at :

  1. World Bank’s Ease of Doing Business Index
  2. World Bank’s Ease of Starting a Business
  3. Global Talent Competitiveness Index
  4. Global Competitiveness Index
  5. Bloomberg Innovation Index

World Bank’s Ease of Doing Business Index

First, we have the World Bank’s Ease of Doing Business Index which determines the ranking of a country based on these 10 factors:

  • Starting a business

  • Protecting minority investors

  • Dealing with construction permits

  • Paying taxes

  • Getting electricity

  • Trading across borders

  • Registering property

  • Enforcing contracts

  • Getting credit

  • Resolving insolvency

The accumulated score for each individual indicator will then be aggregated through a simple averaging into one score. An economy’s score is indicated on a scale from 0 to 100 (0 represents the worst regulatory performance, 100 represents the best regulatory performance).

From the table of Southeast Asian countries, we see that Singapore comes in first in the ease of doing business, followed by Malaysia, Thailand, Vietnam, Indonesia, then the Philippines. Although the rankings of the first three countries are relatively far apart, when looked closely their scores are actually above 80.

EODB Index Score
Table 1: Countries based on EODB scores, out of 100.

World Bank’s Ease of Starting a Business

The World Bank’s Ease of Starting Business Index measures the following criteria to rank economies on how easy it is to incorporate a business. The criteria are:

  • Number of procedures
  • Time taken
  • Cost
  • Paid-in minimum capital
  • Reforms

From the table and in ascending order, the EOSB scores show Singapore to be first, followed by Thailand, Vietnam, Malaysia, Indonesia, and the Philippines.

EOSB Index Score
Table 2: Countries based on EOSB scores, out of 100.

Global Talent Competitiveness Index

The Global Talent Competitiveness Index is a report that measures and ranks economies on their ability to grow, attract, and retain talent. The talent competitiveness comprises two sub-index – Input and Output- and their pillars.

Input Index

Output Index

  • Enable

  • Vocational and Technical skills (VT Skills)

  • Attract

  • Global knowledge skills (GK Skills)

  • Grow

  • Retain

As such, the compiled score is then averaged out and an individual score for each section is computed, followed by a rank. As seen in the table, Singapore ranks first, followed by Malaysia, the Philippines, Indonesia, Thailand, then Vietnam.

GTCI Score
Table 3: Countries based on GTCI scores. For the GTCI scores, the lower the scores, the better the country is on the index. 

Global Competitiveness Index

The Global Competitiveness Index by the World Economic Forum measures and ranks economies based on how well they drive productivity, growth, and human development. The framework consists of four components:

  • Enabling environment
  • Markets
  • Human capital
  • Innovation ecosystem

The 2019 score ranks Singapore as first, followed by Malaysia, Thailand, Indonesia, the Philippines, and lastly Vietnam. For individual indicators, raw values are transformed into a progress score ranging from 0 to 100, with 100 being the ideal state.

GCI Score
Table 4: Countries based on GCI scores, out of 100.

Global Innovation Index

The Global Innovation Index (GII), released by the World Intellectual Property Organization, provides data on how economies are performing based on their innovative performance.

The framework of the GII 2020 was based on two sub-indexes; Input and Output.

Input Index

Output Index

  • Institutions

  • Knowledge and technology outputs

  • Human capital and research

  • Creative outputs

  • Infrastructure

  • Market sophistication

  • Business sophistication

The GII 2020 reports Singapore as first, followed by Malaysia, Vietnam, Thailand, the Philippines, and Indonesia, as shown in the table below.

GII Score
Table 5: Countries based on GII scores, out of 100.

Bloomberg Innovation Index

The Bloomberg Innovation Index (BII) measures and ranks economies on their ability to innovate. Economies were ranked on a scale of 0 to 100 based on the following criteria:

  • R&D intensity

  • Tertiary efficiency

  • Manufacturing value-added

  • Researcher concentration

  • Productivity

  • Patent activity

  • High-tech density

With that, within Southeast Asian countries, BII 2020 ranked Singapore first, Malaysia next, followed by Thailand, and Vietnam. As only the top 60 countries were listed, Indonesia and the Philippines were not listed.

BII Score
Table 5: Countries based on BII scores, out of 100.

Summary Table of Countries against each Index

Summary Table of Index Scores
Table 7: Combined rankings of countries based on the respective business index.*The numbers in the table are based on the rankings of each country on the respective index. Do refer to the individual indexes in the article for the breakdown of the methodology and criteria of each index. **Do note that the lower the number (ranking), the better the country is doing. For example, on the Ease of Doing Business Index 2020, Singapore is the best-performing country, followed by Malaysia, Thailand, Vietnam, Indonesia, then the Philippines. 

Whether you are looking to expand your business into any of these markets or getting a glimpse of the business environment in the ASEAN region, understanding different markets and observing the trends will be helpful for your business.

This 10-member economic powerhouse is not one to miss out on, especially as we see the regional economic bloc, ASEAN Economic Community (AEC) boom.

Credit: Greenhouse 


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