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The UK-Singapore Digital Economy Agreement (UKSDEA) was signed and finalised in February and both parties have completed the legal requirements and procedures since. As officially announced by Singapore’s Deputy Prime Minister Heng Swee Keat during London Tech Week, the trade deal establishing rules and standards for cross-border data flows and data protection between Singapore and the United Kingdom came into force on June 14th.

The agreement aims to promote end-to-end digital trade by establishing standard digital systems for e-payments, e-invoicing, and the preservation of a safe digital environment, as well as encouraging small and medium-sized businesses to participate in the digital economy.

Furthermore, the agreement allows the UK to join Singapore in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), one of the world’s largest free trade agreements, which accounts for 13% of global GDP, or US$13.5 trillion.

In order to understand the implications of this highly innovative digital linkage that has been established between Singapore and the UK, the key features of the deal are listed as follows:

Advanced end-to-end digital trading, whether through secure e-payment systems and digital, paperless trading. This will reduce the transaction costs and time for businesses, and to further digitalize processes.

Trusted data flows. With protected source codes, data between both parties will be transferred seamlessly and data will not be localized. Furthermore, both parties will ensure submarine cable systems’ to be intact to ensure connectivity between both regions.

SMEs’ participation to the digital economy. Government information is made available to the public in easy-to-use APIs, with the aim of reducing the barriers to entry for SMEs to participate in the digital economy. Moreover, Singapore and the UK seek to promote growth for these SMEs through e-commerce platforms to create a link with global supply chains.

The article, as reported by ASEAN Briefing, can be retrieved here.

Thanks to this deal being put into force, Singapore and the UK are now freer than ever to enable new growth opportunities in the digital economy. For any of your international expansion needs, Altios is here to accompany you every step of the way.

Representatives from nine Southeast Asian countries, as well as the secretary general of the Association of Southeast Asian Nations (ASEAN), gathered in Washington, D.C. for a two-day special summit. During this summit, the US has pledged to spend $150 million on Southeast Asian infrastructure, security, pandemic preparedness, and other initiatives aimed at reinforcing the ties between the U.S. and ASEAN, and implicitly at combating China’s influence in the region.

#1: Cooperation in maritime security (~$60 million)
The US Coast Guard will lead new regional marine activities with a budget of around $60 million. Among them are:

  • Programs to assist ASEAN nations in combating illegal, unreported, and unregulated fishing, as well as preventing forced labor in the fishing industry.
  • Deployment of a cutter vessel for security cooperation in Southeast Asia and Oceania, as well as a training platform. According to the White House, the cutter will be deployed across the region and will conduct training missions as well as participate in “cooperative maritime engagements.”
  • Additional US Coast Guard support for maritime law enforcement agencies in Southeast Asia, including the first deployment of a training team to the region.
  • Standardization of the energy safeguarding procedure, protection of critical maritime infrastructure and all-hazards response through training.

#2: Clean energy and Infrastructure (~$40 million)

Another $40 million will be used to help raise $2 billion in funding for clean energy infrastructure in the region, with the goal of speeding the adoption of clean energy technologies.

The United States will also implement programs to assist ASEAN countries in combating deforestation, reducing methane emissions, and increasing conservation. A new U.S.-ASEAN Climate Solutions Hub will give technical help to ASEAN governments, among other things.

#3: Public health (~ $15 million)

The U.S. Centers for Disease Control and Prevention will roll out a $5 million program to boost pan-respiratory disease surveillance in Southeast Asia through its new regional office in Hanoi, Vietnam.

Furthermore, the U.S. Agency for International Development (USAID) will invest up to $10 million in regional programs to improve early diagnosis and community response to Covid-19, tuberculosis, and other airborne infections.

#4: Education (~$5 million)

The U.S.-ASEAN Institute for Rising Leaders, which will send public officials from ASEAN nations to the U.S. for professional and leadership training, will be launched by the Johns Hopkins School of Advanced International Studies.

The State Department will also expand its Young Southeast Asian Leaders Initiative and the Fulbright U.S.-ASEAN Visiting Scholarship Program. In addition, it will spend $3 million on English language programs in Southeast Asia.

Moreover, the State Department will launch a new exchange program for academic fellows from ASEAN universities to visit the United States and explore collaboration opportunities with US academics.

#5: Digital investments (~$10 million)

The United States will announce a $6 million regional strategy to boost innovation, strengthen digital economy rule-making, and support the adoption of global artificial intelligence standards.

The article, as reported by the Straits Time, can be retrieved here.

Southeast Asia presents promising growth and investment opportunities. With offices across the region, Altios is here to accompany small and mid-cap companies every step of the way on their journey towards international expansion.

The Covid-19 pandemic pushed more than 4.7 million people in Southeast Asia to extreme poverty, setting back the numerous efforts which have made Southeast Asia a prime example of successful poverty reduction in the past decades. With the progressive easing of restrictions and opening of borders for travel, Southeast Asia is on a great path to retrieve jobs lost from Covid-19 and bounce back towards robust economic recovery.

The pandemic has led to widespread unemployment, worsening inequality, and rising poverty levels, especially among women, younger workers and the elderly in the region. With a reference scenario of no-Covid, it was estimated by the Asian Development Bank that the region led to 9.3 million fewer jobs being created in 2021.

Today, Southeast Asian economies are recovering slowly, though growth remains volatile and the economic situation remains fragile. We are seeing more intensified efforts across the region to build back greener and better. The region has made great strides to build back a stronger, better economy.

According to a recent poll by the Asia-Pacific Economic Cooperation on digital skills gaps, 75% of employers report major skill mismatches for individuals entering the workforce. To produce a future workforce that is better able to support a contemporary economy, more investment is required. Significant improvements in education systems, programs promoting workplace apprenticeship and training, and incentives for reskilling and upskilling are all part of this strategy.

Countries can improve their competitiveness by removing trade barriers to increase efficiency and productivity, cut red tape, improve logistics, and promote small business modernization through technology adoption and incubation.

In order to finance recovery, policymakers in the area must also strengthen macroeconomic fundamentals and preserve fiscal restraint in debt management. In Asia, huge Covid-19 response packages have significantly increased fiscal deficits and debt levels. As Southeast Asia recovers from the pandemic, governments must address existing economic and financial imbalances while also ensuring sufficient foreign reserves and policy room to cushion future shocks.

Moreover, as countries work to speed up their economic recovery, they should go beyond the idea of pursuing “business as usual”. This crisis provides an opportunity to increase green investments and set the foundation for a more sustainable economy. Rivers and oceans should be protected, and countries should be encouraged to switch to cleaner fuels.

By aggressively recycling and reusing resources, the public and private sectors could collaborate more closely to lessen the industry’s environmental impact. Reductions in carbon emissions should be rewarded through tax policy. Green infrastructure projects should be pushed in recovery plans because they are both excellent for the environment and a key source of growth and jobs. For example, the Asian Development Bank is collaborating with regional and international partners to help economies transition to more sustainable alternatives. This people-centered approach to recovery can help create more productive jobs, especially in hard-hit industries like transportation, hospitality, and tourism. It has the potential to reverse Southeast Asia’s productivity trends, which were reversed due to Covid-19.

With Southeast Asia’s promising growth opportunities, Altios is here to accompany small and mid-cap companies every step of the way on their journey towards international expansion.

In the wake of Russia’s invasion of Ukraine, the 10 member states of the Association of Southeast Asian Nations’ concerns are raising. While Asian companies are less exposed to the two countries than their European counterparts, the crisis might nevertheless have an impact on the region’s enterprises. Here are some implications for businesses in Asia.

#1: Oil and gas

Increasing oil prices will impact both businesses and consumers, while inflation and geopolitical tensions threaten to drag down investment sentiment and demand for travel just when companies are starting to recover from the COVID-19 crisis.

Due to concerns over Russian supply, oil prices are surging, with benchmark WTI crude futures surpassing $100 per barrel for the first time in more than seven years on Thursday. After Saudi Arabia, it is the world’s second-largest oil exporter.

Higher crude and gas costs would have an impact on companies that consume oil. “This may result in even greater inflation around the world and force central banks to tighten monetary policy at a faster pace, weighing on risk assets, notably the rate-sensitive technology sector,” says Margaret Yang, a Singapore-based strategist at DailyFX.

On the other hand, certain Asian energy-related industries are expected to prosper. Medco Energi Internasional, an Indonesian oil and gas firm, surged 13 percent on Thursday, Elnusa, an oil and gas equipment and services company, rose 12 percent, and AKR Corporindo, a petroleum trader and distributor, rose 6 percent. PTT Exploration and Production, a Thai oil company, also increased by 3.5 percent.

#2: Transport and tourism

A drop in international travel as a result of the tensions, combined with higher fuel prices, would be a setback for airlines as they try to recover from the coronavirus outbreak. Following omicron variant outbreaks, some Asian nations, including Thailand, were just recently beginning to open their borders to vaccinated tourists for quarantine-free travel. However, geopolitical dangers may deter people from visiting, putting the brakes on a future tourist resurgence in Thailand and elsewhere.

In addition to these operational challenges, Asian airlines face greater risks. The fact that some of their European partners have halted Asia routes is a setback, and if the conflict continues, demand for flights into and out of Europe could suffer. Long-term warfare would also be detrimental to the global economy and destroy travel sentiment.

#3: IT

The current crisis has arisen at a time when Ukraine is establishing itself as a growing tech hub in Eastern Europe. Many multinational corporations have bases or offshore development partners in the country, taking advantage of the educated yet low-cost workforce. These businesses are now increasingly concerned about the local situation.

#4: Commodities

Ukraine exports wheat, corn, and other commodities in large quantities. While those items are primarily destined for European markets, potential supply chain disruptions might raise grain prices across the board, affecting Asian firms and consumers.

The Food and Agriculture Organization of the United Nations’ Food Price Index reached 135.7 in January, up from 113.5 the previous month. Many Asian food producers have announced price increases in recent weeks, claiming that rising raw material, logistical, and packaging costs were making it impossible to absorb. Further complications from the Ukraine crisis would weigh on Asia’s food producers.

#5: Rare metals & rare gas

According to market researcher TrendForce, Ukraine is a significant supplier of raw material gases for semiconductors, including neon, argon, krypton and xenon. For example, Ukraine accounts for nearly 70% of the world’s neon gas capacity. “If the supply of materials is cut off, there will be an impact on the industry,” TrendForce said.

There will be no impact on chip production in the short term, as there are still supplies from other regions, but the researcher says, “the reduction in gas supply will likely lead to higher prices which may increase the cost of wafer production.”

Russia is also a major exporter of rare gases, also known as noble gases, and palladium, which is used to purify automobile exhaust. Some Asian economies such as Japan — a major car making economy — are heavy importers of Russian palladium. If Moscow limits exports of this material, it could affect Asian businesses if alternative sources cannot be readily found.

The full article, as reported by Nikkei Asia, can be found here.

We are reactivating our Global Help Desk service to assist free of charge our clients questioning or facing serious issues the region (Ukraine, Russia, Eastern Europe). Please send us an email to:

As an international group, we feel it is important to express our support and solidarity with all our colleagues and customers. Today and more than ever, the greatest resource we have right now is each other.

The signature of the Pacific Alliance-Singapore Free Trade Agreement (PASFTA) by Singapore’s Minister for Trade and Industry and his counterparts from the Pacific Alliance, consisting of Chile, Colombia, Mexico and Peru, took place on the 16th Pacific Alliance Summit, in Bahía de Málaga, Colombia.

After concluding negotiations that lasted over four years, Singapore becomes the first associate member of the trade bloc with a combined gross domestic product of over $2 trillion. In a pre-recorded speech for the 16th Pacific Alliance Summit, PM Lee states that “PASFTA will strengthen and institutionalize the economic links between our countries”, creating opportunities for people and business. This will allow Singapore and the Pacific Alliance to cooperate in mutually beneficial areas such as the digital economy, logistics and infrastructure, and food trade.

Currently, the Pacific Alliance accounts for one third of Singapore’s total trade and investment with Latin America and the Caribbean.

More than 100 Singapore companies across various sectors, including trade, technology, innovation as well as infrastructure, operate in Pacific Alliance countries. Similarly, large companies from the Pacific Alliance have established a presence in Singapore.

“We hope that more companies from the Pacific Alliance will follow and use Singapore as a gateway to develop markets and seize business opportunities in our region”, PM Lee said.

The countries will now work on their ratification processes to bring the agreement into force, according to MTI. The FTA will go into effect after Singapore and two Pacific Alliance member states ratify the free trade agreement.

Malaysia is looking to position itself as a global investment hub in the Southeast Asia region given the trajectory of its recent economic programs.

Earlier this week, as part of Budget 2022, the Malaysian Government announced a RM40 billion economic stimulus package aimed at driving entrepreneurship and foreign investment. Accompanying this, the government is also expected to provide a dedicated fund of up to RM2 billion to attract strategic foreign investments from multinational companies (MNCs).

Meanwhile, the Ministry of International Trade and Industry (MITI) has also begun drafting the new National Investment Aspirations (NIA) to attract strategic investments with high-value economic impact. This is a growth framework which was approved by the Malaysian Cabinet on 21 April 2021 to serve as a basis for fundamental reforms of Malaysia’s investment environment.

MITI, together with the Malaysian Investment Development Association (MIDA) and its other agencies, will be responsible for overseeing these efforts, which will include a comprehensive review of investment-related policies and restructuring investment strategies at a national level.

Both developments are aligned to the policies and strategies outlined in the 12th Malaysia Plan and will attempt to accelerate post-Pandemic recovery. Malaysia can thus expect to see a further increase in foreign and domestic direct investments, which was recently recorded at RM107.5 billion in the first half of 2021, a jump of 69.8% compared to the same period last year.

Senior Minister Mohamed Azmin Ali attributes this trend to the country’s “capacity and capability in providing high-skilled talents and firm readiness in adopting advanced technology for value-added industries.” He also adds that with the NIA, the country will continue to strengthen its economic fundamentals through the implementation of trade and investment practices that are transparent, and business-friendly.

Malaysia has already recently received an RM 8.5 billion investment from Austria’s AT&S’ for setting up its local manufacturing facility in the country, its first in the Southeast Asian region. These new facilities are expected to create 1,500 jobs among engineers and 4,500 jobs among blue-collar workers locally.

Furthermore, developments of a strategic partnership between MIDA and the Movement of the Enterprises of France (MEDEF) is also expected to complement Malaysia’s NIA through the expanded cooperation between France and Malaysia. According to MITI, French companies are displaying growing interest in continuing partnerships in the country’s aerospace, biotechnology, advanced chemical, medical devices, halal products and the construction sectors.

Based on these new incentives, Malaysia can be expected to attract a greater volume of high-quality investments in 2022, which will not only lead to the creation of high-quality, knowledge-based jobs for young Malaysians but also enhance local industry value chains and small and medium enterprises (SMEs).

The recent endorsement of US President Joe Biden’s proposal for a global minimum corporate tax by the G7 leaders (United States, Britain, France, Germany, Canada, Italy, and Japan) signifies a major step forward for the cross-border global tax regime.

COVID-19 has highlighted the issues of inequalities and fairness all over the world; incidents such as recent news reports on US billionaires and companies paying little to no tax have continued to bring this issue forward.

The Group of Seven leaders that recently occurred in Britain has led to the endorsement of a US President Joe Biden’s proposed global minimum tax of 15% in the countries that multinational companies operate in. As it stands, this amount is lower than Singapore’s current corporate tax rate of 17%. The proposed global minimum tax would apply to global companies with at least a 10% profit margin, and 20% of any profit above that minimum would be taxed.

According to UOB senior economist Alvin Liew, “This deal has to do with updating a tax system to be relevant to a complex, global digital economy.”

The tax is partially aimed at helping governments recoup the billions of dollars they will need to help pay off debts incurred during the COVID-19 crisis and even out existing inequities in society.

Although the global minimum tax has garnered the support of the G-7, it will still have to be discussed at the G-20 meeting, which includes China and India. It will then be brought up at the planned meeting of 139 jurisdictions and member countries of the Organisation for Economic Co-operation and Development (OECD) in Paris.

Should the deal be implemented, each individual tax jurisdiction would need to think about its response, both in terms of legislation and fiscal policy; “In Singapore’s case, this may involve reworking tax and non-tax investment incentives to maintain Singapore’s competitive edge in international business,” said Mr. Sandareswara Sharma, a tax lawyer and consultant at Malkin & Maxwell.

The implementation of this global minimum tax would also cause global companies to rethink their tax strategies, as MNCs can currently legally avoid tax by setting up local branches in countries with low corporate tax rates and declaring profits there. The change would mean that they would no longer be able to only pay the local rate of tax, even if profits come from sales made elsewhere.

Forcing companies to pay tax where they are selling their products and services and preventing countries from undercutting each other in a race to the bottom of the tax ladder through the standardisation of a tax rate has not been welcomed by all.

Entities such as big tech and healthcare players, who will be most directly impacted by the changes in the global tax regime, could see about a 5% higher tax burden. Similarly, tax jurisdictions like Japan, Taiwan, and Ireland could see higher tax rates, with Ireland in particular saying that any deal on a minimum rate must meet the needs of “small and large countries, developed and developing.”

Thus, the negotiation period for the final global tax deal may not arrive until late this year, as nations will need to pass the plan through their respective legislatures. The road to the implementation of the final destination is still a long one.

The full article, as reported by The Straits Times, can be accessed here.

Recent corporate restructurings by Sembcorp Industries, CapitaLand, SPH, and Keppel Corp could be indicative of an impending slew of restructurings by local conglomerates.

In 2020, Sembcorp Industries made the decision to distribute its entire stake in Sembcorp Marine, its marine arm, to shareholders. This decision came about after two years of losses and a dim outlook for SembMarine, which was also hit by COVID-19 and its ensuing effects like falling oil prices.

The decision was touted as an opportunity for Sembcorp Industries to reposition itself and focus specifically on urban development and utilities, which could make the company easier to value.

It appears this decision has motivated other Singapore conglomerates to critically evaluate their own businesses, as CapitaLand, Keppel Corporation (Keppel Corp), and Singapore Press Holdings (SPH) have all recently announced large restructuring moves.

One of the major influencing factors may have been declining returns on equity (RoE) to shareholders, which investors often use as a gauge for a company’s productivity. COVID-19 has caused many businesses to reevaluate the three ways to boost low RoE according to the DuPont model, which are increasing the profit margin, increasing the amount of borrowings, and reducing the amount of assets used in the business.

Given that businesses cannot always assume that profits can be increased simply by increasing sales or raising prices, especially if they don’t have adequate pricing power, and that borrowing can be risky if inflationary pressures result in higher rates of interest in the future, many businesses have turned to reducing assets to boost RoE.

Like Sembcorp Industries, the aforementioned companies have restructured in response to recent conditions as well as key external drivers. For example, Keppel Corp had to respond to an increasingly unfavourable consumer attitudes towards fossil fuels, unstable oil prices, and the adverse impacts of COVID-19 on its shipbuilding businesses. CapitaLand had to pivot to an asset-light approach to real estate businesses with more predictable earnings as COVID-19 hit its retail, lodging, and residential business segments. Finally, SPH decided to focus on its property business and turn its media arm into a not for profit, as COVID-19 caused a 31.4% decline in advertising revenue on top of already declining sales and revenues.

Given all these changes amongst Singapore’s conglomerates, it seems likely that other sectors and businesses will also consider using restructuring as a means to adjust to shifting competitive landscapes. CNA suggests that the taxi business is an ideal candidate for restructuring thanks to lower passenger volumes and declining efficiency in use of assets.

Only time will tell how many other businesses will follow the route of Sembcorp Industries, Keppel Corp, CapitaLand, and SPH, and if restructuring will truly reverse the fortunes of these businesses.

NUS announces its 2 new graduate programs in fintech that will commence in the upcoming academic year, and ALTIOS discusses how this will strengthen Singapore’s fintech landscape.

2019 was a banner year for Singapore’s fintech industry, with investments having doubled to more than US$861 million compared to the year before, and more than 40 innovation labs being set up to drive innovation within the traditional financial institutions and facilitate collaborations with fintech firms.

The nascent Singapore fintech industry has expanded to an estimated 1,000 firms, making it the largest hub in South-east Asia in terms of total fintech-investment dollars as well as number of fintech firms.

While Fintech firms have not been spared from the economic drawbacks of Covid-19, Singapore’s Fintech has proven itself to be resilient. It has even thrived because of the acceleration of the adoption of digital finance by consumers across all age groups and businesses of all sizes.

Now, we are seeing even more signs of Singapore’s commitment to fintech and integrating it into society. The National University of Singapore (NUS), ranked the #11 best university in the world by QS Global World Rankings 2021, recently announced that it will begin offering two new graduate programs in fintech in the upcoming academic year. The programs will be jointly funded by the Monetary Authority of Singapore (MAS), the National Research Foundation Singapore (NRF), and NUS via the Asian Institute of Digital Finance (AIDF) at NUS.

NUS hopes that these programs will help “build a robust ecosystem of high-quality research talent and capabilities to support the fast-growing financial industry in Singapore.”

As Singapore continues its quest to become the premier destination for fintech, the graduates of these programs will certainly be an asset to the innovative fintech startups and companies that have set up base In Singapore, such as the 4 digital banks that were recently given licenses to operate by MAS.

Having the ability to hire top talent locally will also be a big draw for homegrown fintechs looking to make their mark in the space, which will in turn strengthen the fintech ecosystem in Singapore.

Overall, NUS’ commitment to improving the talent pool in fintech and the progressive regulatory support the government has demonstrated are positive signs for the continued growth of Singapore’s fintech industry.

The recent coup in Myanmar has upended assessments and expectations about Myanmar’s economic potential as well as business opportunities in the region.

ALTIOS shares the expected impacts of the coup on key markets in ASEAN such as Vietnam and Singapore.

Myanmar’s economy and engagement with other countries has long been defined by its current rulers – its military junta, whose ruling of the country has drawn condemnation from others in the form of sanctions and withdrawal of foreign direct investments (FDI).

High expectations were placed on Myanmar after the National League of Democracy (NLD), led by Aung Suu Kyi, won the 2015 elections. However, in recent years, a combination of poor infrastructure, the government’s handing of the Rohingya crisis, and bureaucratic red tape have led to a decline in foreign investment.

Recently, the military coup by the junta has shaken up investor perceptions and Myanmar’s projected economic recovery, which was already fragile considering the COVID-19 pandemic.

Sian Fenner, lead Asia economist at Oxford Economics, predicted that the political upheaval would jeopardize the $3.5 billion (€2.9 billion) in foreign investment proposals that were yet to be approved, with “projects likely to be delayed at best, or possible cancelled.”

What does this mean for ASEAN investments in Myanmar?

First of all, certain ASEAN countries like Cambodia and Vietnam could stand to gain new foreign investments. With investors pulling out of Myanmar in droves due to the military coup, Vietnam and Cambodia are attractive options for those looking into alternative Southeast Asian bases.

Field Pickering, the head of venture investing at the Singapore-based Vulpes Investment Management, was one of many with interests in Myanmar who offered insight into the Vietnamese market. According to Pickering, “Once borders open up after the pandemic, and Asian investors return physically to Vietnam, I believe it will be a feeding frenzy and you will see deal activity erupt, pushing Vietnam to the top of the list of emerging markets attracting foreign investment.”

Secondly, the coup poses great risk to the business interests and investments of Singapore, which accounts for 34% of overall approved investment in Myanmar (24 billion USD) and is the largest foreign investor in Myanmar. While the long-term economic effects of the coup are yet to be determined, many Burmese are calling on various Singaporean stakeholders to divest from Myanmar. A few actors have begun this process, such as Lim Kaling, the co-founder of the technology company Razer, but activist groups such as Justice for Myanmar are pushing for more to follow suit. As the clash between the junta and its citizens continues, it remains to be seen how key investors in Myanmar like Singapore choose to prioritise commitments to upholding human rights and democracy, relationships with the current ruling government of Myanmar and its allies, and its vested economic interests in the region.

Finally, the coup threatens the tenuous unity of ASEAN. Long-standing differences in attitudes towards Myanmar and ASEAN’s commitment to non-interference have led to many outsiders condemning ASEAN responses to the coup, with countries like Thailand, Vietnam, and Philippines stating that the coup is an internal affair. Additionally, the delicate political situation and differences in opinions prevented ASEAN from producing a joint statement on the situation. Altogether, the lack of consensus on the situation and commitment to a resolution combined with general uncertainty about Myanmar may deter FDIs from coming to Myanmar and ASEAN as a whole.

Overall, businesses should exhibit a high level of caution as they navigate Myanmar’s new normal. Businesses should also be aware that their decisions regarding Myanmar carry an undeniable political message.