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The practical toolkit for doing business in south east asia


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UKTI Presentation given at the Practical Toolkit for Doing Business In South East Asia event at The Oval Kia, London on 18 October 2012.

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The practical toolkit for doing business in south east asia

  1. 1. The Practical Toolkit for Doing Business in South East Asia Thursday 18th October The Kia Oval
  2. 2. Connecting your business to Asia Banking Advice & Help 18 October, The Kia Oval,
  3. 3. Agenda• Introduction• Concerns and Challenges• Mitigating Risk• Trade Cycle and Working Capital• How can RBS/Natwest help?• Innovations designed to help International trading businesses• Government Schemes for Exporters• Q& 3 3
  4. 4. Concerns and Challenges Potential Challenges for companies trading internationally • Time • Distance Risk Mitigation • Local business customs and practices • Ease and effectiveness of communication • Ability of the trading parties to meet their obligations • Trust Common Business Needs • ‘Plan B’ if something goes wrong? • Logistics • Insurance Finance Cash • Risks and risk management • Getting Paid 4
  5. 5. Mitigating Risk Mitigating Risk Exporter Importer
  6. 6. Trade Cycle and Working Capital Trade Cycle and Working Capital 6 6
  7. 7. How can RBS/Natwest help? What support can a banking partner provide? Managing Risk Working Capital • Understanding a Businesses Trade Cycle • Trade Products Developing the • Trade Finance – to match the Trade Cycle and Working Capital need right solutions • New forms of finance – UKEF supported facilities • Accounts domiciled in Asia in local currency • Access to various international payment mechanisms • Visibility and electronic delivery 7
  8. 8. How can RBS/Natwest help? RBS / Natwest can help • RBS is currently ranked among the top 10 Long History in Asia foreign banks in Asia We are present in 10 countries in the • We have 2,000 Electronic Channel Clients region, employing over 7,500 staff and and process more than 100,000 servicing over 75,000 accounts. transactions per day • We process more than 8 million cheques and issue over 23,000 Letters of Credit per Global Presence year in the region • Our Client Service is rated as one of the Best in Asia by our clients • Our local banking presence combined with our broad product capabilities and award- winning delivery channels have resulted in strong client relationships Branch/representative office; cash, clearing and trade capabilities Partner banks 8 8
  9. 9. Helpful solutions and guidance forexporters/importersRob 9
  10. 10. Innovations designed to help International trading businesses Help with getting paid on time • Debt collection service for open account trading in partnership with Atradius • 19 offices worldwide covering 40 countries • Nil cost to register for service • Upfront cost for each debt of £50-£100 • Success fee of between 4 & 30% A helping hand for Exporters • Creation of exporter’s documents - Invoices, Packing lists, Certificate of origin • Assistance in preparation of 3rd party documents (Insurance Certs, Bills of Lading, etc) • Follow-up with third party document providers
  11. 11. Innovations designed to help International trading businesses Investing in your business – importing machinery • Secure the machinery without having to pay up-front • Minimises risks of international trade via Letter of Credit • One stop shop: Asset Finance automatically pays the Import Letter of Credit facility • Budget with certainty: a payment structure tailored to the business’ needs Helping businesses secure export funding • Risk sharing between the banks and the government (up to 90%) • Most popular schemes: Bond Support Scheme & Export Working Capital Scheme • Conditions: 20% UK originated & exports to non-OECD countries • Speak to us or UK Export Finance at an early stage
  12. 12. Government Schemes for Exporters Help & Guidance • Local experts & an ‘International’ Hotline 0800 210 0235 • Guide to International Trade • Internet (Education & tools):
  13. 13. The Practical Toolkit for Doing Business in South East Asia Thursday 18th October The Kia Oval
  14. 14. LEGAL GUIDANCE UKABC, UKTI & RBS 18 October 2012Business | Individual | Not for Profit 14
  15. 15. Taylor Vinters LLP: Taylor Vinters LLP: Our story Environment Set-up •Cambridge, London and •Cambridge, London and Singapore Singapore •Technology, investment •Technology, investment and private wealth and private wealth •Focus on hi-growth tech •Focus on hi-growth tech Future Tax companies and MNCs in companies and MNCs in SE Asia SE Asia •In Singapore 33years •In Singapore years •Opened full-time office •Opened full-time office 2011 2011 Doing deals Networking Me: Me: •Technology lawyer •Technology lawyer •International practice •International practice •Strategic leadership •Strategic leadership Talent Launching Funding LAWYERS WITH A CAMBRIDGE ATTITUDEBusiness | Individual | Not for Profit 15
  16. 16. Our story Environment Set-up •• Legal systems Legal systems •• IP protection IP protection •• Governance Governance and stability and stability Future Tax •• Approach to Approach to contracting contracting •• Attitude to rule Attitude to rule Doing deals Networking of law of law •• Reality of Reality of enforceability enforceability Talent Launching Funding LAWYERS WITH A CAMBRIDGE ATTITUDEBusiness | Individual | Not for Profit 16
  17. 17. Our story Environment Set-up • • Soft or hard landing? Soft or hard landing? • • Documenting Documenting partnerships partnerships • • Corruption and Corruption and bribery compliance bribery compliance Future Tax • • Transparency & ease Transparency & ease of set up of set up • • Immigration Immigration • • Regulated sectors Regulated sectors need extra care need extra care Doing deals Networking • • Issues arise on Issues arise on transition transition • • Plan for evolution of Plan for evolution of your business your business structure structure Talent Launching Funding LAWYERS WITH A CAMBRIDGE ATTITUDEBusiness | Individual | Not for Profit 17
  18. 18. LAWYERS WITH A CAMBRIDGE ATTITUDEBusiness | Individual | Not for Profit 18
  19. 19. LAWYERS WITH A CAMBRIDGE ATTITUDEBusiness | Individual | Not for Profit 19
  20. 20. •• Key driver in Key driver in Our story Environment Set-up choice of location choice of location •• Regime and Regime and incentives are incentives are equally important equally important Future Tax •• Corporation tax Corporation tax rates rates •• R&D tax relief R&D tax relief •• Personal tax rates Personal tax rates Doing deals Networking •• Treatment of Treatment of dividends & capital dividends & capital gains gains •• Withholding tax Withholding tax •• Double taxation Double taxation Talent Launching Funding treaties treaties LAWYERS WITH A CAMBRIDGE ATTITUDEBusiness | Individual | Not for Profit 20
  21. 21. LAWYERS WITH A CAMBRIDGE ATTITUDEBusiness | Individual | Not for Profit 21
  22. 22. •• World-class networking World-class networking Our story Environment Set-up cities cities • • Britcham Britcham • • Amcham Amcham • • Eurocham Eurocham • • Business development Business development culture culture • • Centres for conference Centres for conference Future Tax activity activity • • Transport hubs Transport hubs Doing deals Networking Talent Launching Funding LAWYERS WITH A CAMBRIDGE ATTITUDEBusiness | Individual | Not for Profit 22
  23. 23. • • Private vs public funding Private vs public funding Our story Environment Set-up • • Smaller-name investment Smaller-name investment funds and angels funds and angels • • Government remains aa Government remains major source of funding major source of funding • • Check industrial policy Check industrial policy • • Legally complex Legally complex Future Tax Doing deals Networking Talent Launching Funding LAWYERS WITH A CAMBRIDGE ATTITUDEBusiness | Individual | Not for Profit 23
  24. 24. • • Hard or soft landing? Hard or soft landing? Our story Environment Set-up • • Due diligence and Due diligence and documentation documentation • • Service vs Product Service vs Product businesses businesses • • Commitment Commitment Future Tax • • Brand and credibility Brand and credibility vital vital • • Relationships will Relationships will take time take time • • Local Local Doing deals Networking partners/employees partners/employees important important • • Regional strategy Regional strategy Talent Launching Funding LAWYERS WITH A CAMBRIDGE ATTITUDEBusiness | Individual | Not for Profit 24
  25. 25. •• Expat vs local? Expat vs local? Our story Environment Set-up •• Immigration Immigration •• Check where you Check where you sit with industrial sit with industrial policy policy Future Tax •• Brand and Brand and credibility vital to credibility vital to recruitment recruitment •• Light-weight Light-weight Doing deals Networking employment employment protection protection •• Churn issues Churn issues •• Reward and Reward and remuneration remuneration Talent Launching Funding •• Expat tax Expat tax LAWYERS WITH A CAMBRIDGE ATTITUDEBusiness | Individual | Not for Profit 25
  26. 26. • • Generally aahighly Generally highly Our story Environment Set-up sophisticated market sophisticated market • • Process more Process more important than important than contract contract • • Discipline Discipline Future Tax • • Take care with Take care with negotiation style negotiation style • • Anticipate face to Anticipate face to face negotiation face negotiation • • Use of intermediaries Use of intermediaries Doing deals Networking • • Some specialised Some specialised areas may require areas may require you to educate the you to educate the market market Talent Launching Funding LAWYERS WITH A CAMBRIDGE ATTITUDEBusiness | Individual | Not for Profit 26
  27. 27. • • Emerging markets Emerging markets Our story Environment Set-up building legal building legal infrastructure infrastructure • • Improvements in IP Improvements in IP protection and protection and enforcement enforcement Future Tax • • Polarisation of choice Polarisation of choice of law of law • • Singapore and HK Singapore and HK will dominate dispute will dominate dispute forum forum Doing deals Networking • • Shift away from trade Shift away from trade protectionism protectionism • • Move towards Move towards tightening of tightening of immigration rules immigration rules Talent Launching Funding LAWYERS WITH A CAMBRIDGE ATTITUDEBusiness | Individual | Not for Profit 27
  28. 28. The Practical Toolkit for Doing Business in South East Asia Thursday 18th October The Kia Oval
  29. 29. Doing Business in Southeast AsiaStrategic Planning and Risk AssessmentChris Torrens
  30. 30. Southeast Asia – risk environment  Divergent political, regulatory and legal systems  Mix of resource, manufacturing and service economies  Unified by FDI-fuelled growth  Big Brother China is watching – strategic importance 1
  31. 31. Macro to micro: risks in Southeast Asia  Exposure to international regulation (e.g. FCPA) Transnational risk  Risks at export destination  Embargoes and sanctions  Political risk Country risk  Operational risk  Regulatory risk  Sector-specific regulatory risk Sector risk  Appropriation risk  Operational risk  Ownership structure Corporate risk  Related party transactions  Corporate governance  Fraud and corruption risk Human Capital risk  Political exposure  Reputational risks  Natural disasters Event risk  Civil and workforce unrest  M&A events 1
  32. 32. Key points for foreign companies – SMEs included• Single largest risk stems from anti-bribery legislation • Private companies as well as public ones • Passive as well as active bribery • Extra-territorial reach • Corporate failure to prevent bribery: you can’t outsource corruption, and ignorance is no defence• Remember: • Know your partner/customer/vendor/supplier: due diligence • Tone from the top • Get your dirty washing out: listen to local manager problems • Create and maintain code of conduct/business integrity principles • Communicate policies • Create mechanisms for disclosing • Be clear on facilitation payments
  33. 33. Indonesia• Sector risks Challenges for business • Nationalist political agendas versus •Creaking infrastructure business pragmatism •Persistent and entrenched corruption • Reactive regulation – business/politics nexus • Licensing problems and appropriation risk •Difficulty of doing business – 129 out• Corporate risks of 183 in World Bank Index • Who owns the business, really? •Complex regulatory environment • Is the company’s plan really aligned with •Terrorism and natural disasters - your investment? though not a major concern for• Human capital risks business • Where’s your money and what was it used •More remote regions pose greater for? challenges • What happens if that “well-connected” •Health risk issues company is no longer so connected? • Reputational risk eg environmental damage
  34. 34. VietnamOverview•Economy dominated by inefficient state sector•Double digit inflation – Dong devalued 6 times since 2008•Opportunities: • Export-focused manufacturing expanding • Fragmented FMCG market ripe for consolidation • Infrastructure under-invested (and dominated by Japanese investors)Key risks•Ongoing economic reform initiatives face political opposition•Ad-hoc approach to policy-making – economic volatility•Endemic corruption à la China • ownership structures opaque • supply chains complex•Legal fragility: poorly defined laws patchily enforced
  35. 35. MyanmarOverview•Reforms are real and will continue – but not a smooth process•Significant questions over political sustainability, especially 2015•Economic reform complex and difficult – managing expectations•Hard and soft infrastructure severely lacking•New foreign investment law will help – but it remains a highly-challenging business environmentKey risks•Under-developed foreign investment environment•Opaque ownership structures – links to leadership•Fraud and malpractice widespread•Investor enthusiasm far ahead of reality – political, operational andinfrastructure challenges remain 1
  36. 36. Associated parties: spotting red flags Wants to be paid offshore Lacks appropriate professional qualifications or experience Recommended by the government official with whom you’re negotiating Close personal links with politicians, officials Asks for extra payment for ‘special services’ Promises services that are ‘impossible’ Damaging press reports or questionable reputation in the market place Seems to be in financial difficulties
  37. 37. Thank 7595 966 970
  38. 38. The Practical Toolkit for Doing Business in South East Asia Thursday 18th October The Kia Oval
  39. 39. The University of Nottingham Social and Cultural UnderstandingThe practical toolkit for setting-up business in South East Asia
  40. 40. Truly Global University•4 UK Campuses; 2 international Campuses•First UK University to establish in Malaysia (2003) andChina (2006)•42,000 students -One of the largest internationalstudent communities •4,800 in Malaysia •5,500 in China •9,000 international students in the UK
  41. 41. Importance of Social and Cultural Understanding - Our experience•Develops our specific local knowledge in each South East Asian country•Helps us engage appropriately with existing and aspiring students•Improves and enhances the ‘The Nottingham Experience’•Enhances our relationship building with decision makers, institutionsand individuals•Promotes effective communication at all levels•Improves business etiquette when working with industry
  42. 42. Respecting religious and cultural traditionsImportance of pre-departure research•Respecting religious observances e.g. Ramadan•Know key festival and holiday dates e.g. Lunar New Year;National Days•Respect and use titles e.g. Tan Sri; Dato’•Drink and dietary obligations•Personal greetings
  43. 43. Successful Meetings•Research attendees and identify most senior person•Ensure ‘like for like’ seniority•Gifts-small and generally wrapped•Prepare business cards with as much detailas possible including academic titles•Expect informalities at the beginning •Address responses to the most senior person •Calm and engaged-maintain ‘face’ •Posture•Do not push too hard for a decision
  44. 44. Successful Meetings (cont’d)•Dress code-Generally business attire butexpectations differ•Dinner •See dinner as part of the meeting •Develop the relationship, bring in more personal information •Be aware of hosts dietary obligations
  45. 45. Importance of language•Differing levels of spoken English across SE Asiancountries-find out before•What does ‘Yes’ mean?•Indirect language conveying bad news•Clarify for what is expected or required•Using Interpreters •Professional interpreters; students •Brief and share presentation well before meeting •Clarify technical terms •Debrief after the meeting
  46. 46. Successful longer term business•Engage with the right people-both key decisionmakers and those on a day to day basis•Role of contracts•Importance of the team•Focus on the relationship not the current problem•Spend time in the host country•Maintain contact formally and informally
  47. 47. Investment in social and cultural training•Constantly learning about social and cultural issues•Develop links with the host country •Interns; Studentships•Attend events and network with visiting delegations•Spend time with your customers through visitingand hosting
  48. 48. Thank You Jason Feehily Head-Asia Business @AsiaBusinessCtr
  49. 49. The Practical Toolkit for Doing Business in South East Asia Thursday 18th October The Kia Oval
  50. 50. fst // UKTI presentation // 2012prepared for // practical toolkit delegatespresented by // Craig Watson Brand and marketing planning for Southeast Asia Speaker notes for UKTI practical toolkit for doing business in Southeast Asia fst //
  51. 51. fst // Why am I here? > Brand expert > Broad experience of sales and marketing knowledge > Some experience of SouthEast Asia market fst //
  52. 52. fst // UKTI presentation 2012 Presentation focus… > The SEA market > Brand and it’s potential role > Defining a brand proposition > Communicating your brand proposition / taking your brand to market > Our experience fst //
  53. 53. fst // Who are we? > fst is an integrated creative agency > We partner our clients to deliver inspiring ideas and creative > Established 20 years ago, fst currently employ around 50 people > fst opened the Singapore office March 2011 fst //
  54. 54. fst // What fst stands for > free spirited thinkers fst //
  55. 55. fst // Section 1 The SEA market fst //
  56. 56. fst // UKTI presentation 2012 Plans for SouthEast Asia > What is your vision for this region? > What countries in the region do you want to target? > What do want to achieve? > How are you going to get there? fst //
  57. 57. fst // Market complexities > Disparity of economies from super rich (Singapore in top 5) to very poor (Cambodia -141st out of 183 listed countries)* NB. UK ranked 22 > Resourcefulness – in this region if they can buy cheaper or do it themselves they will > There are around 18,000 Indonesian islands, speaking 725 different languages. They do however have the 4 th largest population in the world at around 238m *World bank ranking 2005-11, Wikipedia list of countries by GDP per capita fst //
  58. 58. fst // ASEAN 10 > The Association of SouthEast Asian Nations comprises Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, Vietnam > They combine to offer the world’s 4th largest single market fst //
  59. 59. fst // Research is key > Research as much as possible before you develop a marketing plan. > UKTI very helpful with the macro support, but only you can manage the micro details required > Shopping habits, credit card penetration, internet accessibility > Know your market; your customers; your agent or distributors; your competitors fst //
  60. 60. fst // Intelligent Environments // 2012 Section 2 Your brand fst //
  61. 61. fst // The meaning of brand > Your brand has a crucial role in realising your dream > Much, much more than a logo > Brand is a cluster of values and associations > Brand encompasses imagery, design, language and behaviour to ideally deliver an emotional message fst //
  62. 62. fst // Why brand matters “when your employees understand your brand they sell your brand when your customers engage with your brand they buy your brand and when your competition fears your brand you win” Richard Gray, Creative Director fst fst //
  63. 63. fst // UKTI presentation 2012 Views from the market “Asian markets are driven by brand and relationship. Good branding is an essential component of launch – and that goes way beyond just a logo” Tim Pullan – Head of Technology & Outsourcing Asia at Taylor Vinters “We are selling innovative and revolutionary technology to world class organisations. Thanks to fst, our new brand sends out the right message and corporate profile to our target audience. I believe this will help to play a vital part in realising our business plans in SouthEast Asia and beyond” Jerry Lee Barber – Chief Executive Officer at Optitune fst //
  64. 64. fst // Brand power Looking at it another way – A good brand can help you to: Become Rich AND Successful fst //
  65. 65. fst // Great brands are… > simple > relevant > consistent > unique fst //
  66. 66. fst // Intelligent Environments // 2012 Section 3 Brand proposition fst //
  67. 67. fst // What is a brand proposition? > It’s a succinct phrase or sentence that encapsulates what your brand promises… For example: We partner our clients to deliver inspiring ideas and creative fst //
  68. 68. fst // Why do I need one? > It’s a base on which to build your marketing plan and marcomms activity > It’s the essence of your brand > It’s top of your brand triangle fst //
  69. 69. fst // UKTI presentation 2012 What is your UK brand proposition? b > What is the compelling reason for your customers to want to buy your product or service in the UK. What are your values and benefits? > Will this work in SEA? > Which of the following do you have or need: a brand proposition: descriptor: tag line: elevator speech fst //
  70. 70. fst // Intelligent Environments // 2012 Section 4 Taking your brand to market fst //
  71. 71. fst // UKTI presentation 2012 Is your brand in shape for SEA? > What messages need to be delivered to this region? > What marketing tools can you utilise or will have to produce? fst //
  72. 72. fst // Developing a marketing plan Having done your research you should know the following; -which country / countries you’re starting with - is there definitely a need for my product or service in this country? -how and where you’re going to produce and deliver your product or service - which elements of the marketing mix are available and relevant in the region You are now in a position to develop your marketing plan to realise your business plan fst //
  73. 73. fst // UKTI presentation 2012 The ‘P’s’ of marketing p Based on E. Jerome McCarthy’s 4 p’s of marketing devised in 1960, there are now a few more… b > Product > Place > Positioning > Promotion > Price > People > Passion > Planet > Profit > Profile fst //
  74. 74. fst // UKTI presentation 2012 Considerations > Language / translation > Customer CRM / segmentation > Meanings of colours and numbers > Religious sensitivities and events > Avoid colloquialisms > Cultural differences > During Q4 of 2010, it is estimated that there were 4.02 billion search queries in China of which Baidu had a market share of 56.6%. Google who? fst //
  75. 75. fst // UKTI presentation 2012 Numbers and Colours > The Chinese consider 8 a very lucky number > Conversely, 4 is bad – car number plates with 4’s in are avoided > The Chinese consider red to convey good fortune and joy > White is the colour associated with death and mourning in China, but symbolizes purity in Thailand and Korea fst //
  76. 76. fst // Some potentially useful brand comms tools… > A ‘local’ website > SEO, PPC and social media campaigns > Advertisement (TV, radio or trade) > A video, motion graphic or animation explaining what you do > Exhibition stand > Company brochure > Speaker events fst //
  77. 77. fst // Intelligent Environments // 2012 Section 5 Our experience fst //
  78. 78. fst // UKTI presentation 2012 Launch > Visa, a valued client, presented an opportunity for us to open an office in Asia Pacific > Feasibility study and planning from September 2010 > Local agent appointed December 2010 > UKTI assisted launch event, Singapore March 2011 > Marketing collateral, website and business cards available for launch > Had a tactical Regis Office, Raffles Place fst //
  79. 79. fst // UKTI presentation 2012 Progress > Moved to own dedicated office in Kampong Glam February 2012 > Appointed medium weight designer 4 th June 2012 > SEO and networking has broadened client base from just Visa to include… Avis, Bosch, Bridgestone, Singapore Turf Club, Optitune and Transcendent. > We are recruiting 2 new members of staff fst //
  80. 80. fst // fst //
  81. 81. fst // fst //
  82. 82. fst // Future > To develop new website to better reflect our current proposition > To develop an international network of regional associates > To demonstrate thought leadership and educate SEA clients in the value of highly considered design and branding > To grow a work force of excellent local talent > To develop fst SEA as a stand alone integrated creative agency > To open other international offices in Middle East and USA fst //
  83. 83. The Practical Toolkit for Doing Business in South East Asia Thursday 18th October The Kia Oval