ASEAN Biweekly News Updates- May 25 – Jun 5

SET creates a plan for family enterprises and overseas companies; Carbon levy is planned for 2025; Cabinet approves a change in VAT to limit cheap imports; OneWeb prepares for broadband internet service; Need for SMEs to get ready for the green economy; Leaders applaud the ESG business plan; Providing Capital for Green Growth in Vietnam: The Role of Credit Institutions and the ESG Initiative; Đà Nẵng City and the World Bank will foster collaboration in digital database management

SET creates a plan for family enterprises and overseas companies

The Stock Exchange of Thailand (SET) has developed a strategic business plan to attract foreign industries with operations in Thailand as well as family businesses to list on the Thai bourse, aiming to bolster market capitalisation. SET executives noted significant shifts in investment trends post-pandemic, driven by the rise of technology stocks, while traditional businesses strive to adapt to the digital age. To address trust and confidence issues with small-cap stocks and significant fund outflows, the SET implemented stringent measures against naked short selling, program trading, and high-frequency trading (HFT) to ensure trading transparency and equitable growth among investors. New rules to boost investor confidence, particularly in program trading, are set for implementation in the third quarter, coinciding with the expected return of foreign investors as the economy improves and tourism recovers.

SET president Pakorn Peetathawatchai acknowledged the reduced size of the Thai stock market but highlighted positive signs from foreign investors, who showed sustained interest in Thailand during a recent SET roadshow in Hong Kong. He emphasized that the Thai market offers diverse fund mobilisation options for large firms, small enterprises, and startups. Manpong Senanarong, senior executive vice-president of the SET, added that the bourse aims to attract foreign companies, especially those considering relocation and already operating in Thailand, with a focus on sectors such as clean energy, electric vehicles (EVs), and government-promoted S-curve industries. The SET also targets family businesses, many of which are large and interested in listing on the Thai bourse.

Editor’s Note: The Stock Exchange of Thailand (SET) has devised a strategic plan to entice both overseas companies with operations in Thailand and family-owned enterprises to list on the Thai stock exchange, aiming to boost market capitalization. Implementing measures to enhance trading transparency and investor confidence, the SET aims to address concerns surrounding small-cap stocks and attract foreign investors as the economy improves post-pandemic.

Carbon levy is planned for 2025

The Excise Department plans to impose a carbon tax by 2025, which will be linked to the Global Warming Act. Department director-general Ekniti Nitithanprapas assured that the overall oil tax burden would remain the same, minimizing public impact. The carbon tax will follow global standards, taxing emissions at the source, similar to how vehicle taxes are now based on carbon dioxide emissions rather than engine displacement. For example, vehicles emitting over 200 grammes of carbon per kilometre will have a 35% tax rate, while those emitting less than 150g per km will face a 25% levy. Initially starting with oil, the carbon tax will be integrated into the existing diesel excise tax, converting part of the oil tax into a carbon tax without additional legislation. This approach aligns Thailand’s carbon tax rate with Singapore’s, making Thailand the second ASEAN country to implement such a tax. The aim is to provide immediate benefits, especially as Europe begins its Carbon Border Adjustment Mechanism (CBAM) in 2026, helping Thai export-oriented businesses remain competitive.

To promote environmentally friendly practices, the department supports measures to boost electric vehicle (EV) usage, which saw a 685% sales increase in 2024. This led to a reduction in excise tax from 8% to 2% for EVs, cutting the excise tax collected but also reducing carbon emissions by over 240,000 tonnes. The government’s incentives have attracted 22 EV companies to invest over 80 billion baht in Thailand. Additionally, the department is reviewing battery tax rates, currently set at 8%, to encourage recycling and environmentally friendly practices by reducing the tax for recycled batteries. With Europe fully implementing CBAM in 2026, the department is preparing mandatory mechanisms through excise tax law to help Thai businesses stay competitive and mitigate environmental impacts.

Editor’s Note: The Excise Department of Thailand plans to introduce a carbon tax by 2025, aligning it with global standards and the Global Warming Act. This tax, integrated into existing diesel excise taxes, aims to reduce carbon emissions and keep Thai businesses competitive, particularly in light of Europe’s Carbon Border Adjustment Mechanism set for 2026. In tandem, incentives for electric vehicles and a review of battery tax rates underscore the government’s commitment to promoting environmentally friendly practices and sustainable economic growth.

Cabinet approves a change in VAT to limit cheap imports.

The cabinet has approved a Ministry of Finance proposal to collect value-added tax (VAT) on all imported goods valued at over one baht, aiming to curb the influx of cheap imports, particularly from China. Government spokesman Chai Wacharonke stated that this new threshold will take effect 15 days after its publication in the Royal Gazette and will remain in force until December 31. The government will then assess the policy’s impact before deciding on any extensions. Currently, only imported goods valued over 1,500 baht are subject to VAT, a regime in place since 2018.

This measure is part of the government’s effort to create a level playing field between importers and local producers, following complaints from local businesses, especially online sellers, about the adverse impact of cheap imported products on their incomes. In the long term, the government plans to amend the Revenue Code to address these issues permanently. The initiative underscores the government’s commitment to protecting domestic businesses and ensuring fair competition in the market.

Editor’s Note: The Thai cabinet has approved a Ministry of Finance proposal to lower the threshold for value-added tax (VAT) on imported goods to one baht, aiming to restrict the influx of cheap imports, particularly from China. This measure, effective after publication in the Royal Gazette, reflects the government’s commitment to leveling the playing field for local businesses and ensuring fair competition in the market.

OneWeb prepares for broadband internet service

OneWeb’s broadband internet services, offered via low Earth orbit (LEO) satellites, are expected to launch locally by the fourth quarter of this year through a partnership with state telecom enterprise National Telecom (NT). NT provides gateway station facilities for OneWeb’s LEO satellite operations under a landing rights licence approved by the National Broadcasting and Telecommunications Commission (NBTC). The partnership allows NT to earn fees from the gateway and facility services provided to OneWeb and to share revenue from wholesaling OneWeb’s satellite broadband capacity in the local market. Col Sanphachai Huvanandana, president of NT, noted that while OneWeb’s service won’t threaten the existing fibre broadband market, it may impact broadband services provided by geostationary satellites.

The service launch was delayed by four months from the original timeline, following NT’s proposal submission to the NBTC for necessary licences under the new licensing system covering landing rights, gateways, and services. NT aims to leverage its ground station facilities in Thailand for regional service deployment, positioning itself as a hub for OneWeb’s LEO satellite services in Cambodia, Laos, Myanmar, and Vietnam. The gateway station for OneWeb’s connectivity is located at NT’s facility in Ubon Ratchathani province, where NT is responsible for developing, equipping, and operating the ground station facilities. The infrastructure and services provided by NT enable OneWeb to deploy commercial broadband services via LEO satellites in Thailand and the surrounding region.

Need for SMEs to get ready for the green economy

As Thailand anticipates record-breaking heat and a cooling economy, the green economy offers vital opportunities for SMEs. The EU’s Carbon Border Adjustment Mechanism (CBAM) mandates emissions reporting for carbon-intensive industries, affecting Thai exports. By 2026, a border carbon tax will be implemented, impacting SMEs’ roles in global supply chains. Simultaneously, consumer demand for sustainability is rising in tourism, transport, and construction, prompting SMEs to embrace sustainable practices to stay competitive.

Additionally, Thailand is positioning itself as an EV manufacturing hub, with prominent Chinese brands establishing local plants and national goals for zero-emission vehicle production. The green real estate sector is also growing, highlighted by projects like One Bangkok achieving platinum LEED certification. Regulatory trends, including Thailand’s commitments to reduce greenhouse gas emissions and the proposed climate change bill, will require companies to report emissions and adopt green initiatives. SMEs must adapt to these changes to thrive in the evolving market.

Editor’s Note: As Thailand gears up for a green economy amidst rising temperatures and economic challenges, SMEs face increasing pressure to adopt sustainable practices to remain competitive. With initiatives like the EU’s Carbon Border Adjustment Mechanism and Thailand’s push towards EV manufacturing and green real estate, SMEs must adapt to regulatory trends and consumer demand for sustainability to thrive in the evolving market landscape.

Leaders applaud the ESG business plan

The Bangkok Post’s annual conference, “Greening The Future: ESG Leadership in the Sustainability Revolution,” highlighted the influence of environmental, social, and governance (ESG) factors on the global economy. Business leaders discussed the importance of setting a unified carbon credit standard in ASEAN, termed “Asean-VER,” to enhance Thailand’s negotiating power with the EU and support international carbon reduction campaigns. Chaiwat Kovavisarach, vice-chairman of the Federation of Thai Industries (FTI), emphasized the need for this standard to promote business sustainability in Thailand’s industrial sector, a major source of greenhouse gas emissions.

The FTI is advancing carbon credit trading among companies through a dedicated platform and encouraging the adoption of bio-, circular, and green (BCG) economic strategies to minimize environmental impacts. An example of BCG application is the production of sustainable aviation fuel (SAF) from agricultural waste and used cooking oil, which can reduce greenhouse gas emissions by up to 80% compared to conventional jet fuel. This approach underscores the importance of integrating new technologies and eco-friendly practices in business operations to support sustainability goals.

Editor’s Note: Leaders at the Bangkok Post’s conference praised the ESG business plan, highlighting the significance of environmental, social, and governance factors in the global economy. Initiatives like establishing a unified carbon credit standard in ASEAN and promoting bio-, circular, and green economic strategies underscored the commitment to sustainability and innovation in Thailand’s industrial sector.

Providing Capital for Green Growth in Vietnam: The Role of Credit Institutions and the ESG Initiative

Vietnam’s ESG Initiative supports the Green Growth Strategy for 2021-2030, fostering sustainable practices to enhance global supply chain competitiveness. At the Vietnam Business Forum 2024, Prime Minister Pham Minh Chinh emphasized green growth as a core element for economic restructuring and sustainable development. The State Bank of Vietnam (SVB) reported a significant rise in green credit, with outstanding balances reaching VND 636.964 trillion (US$25.02 billion) by March 2024, primarily in renewable energy and green agriculture.

Credit institutions are increasingly integrating environmental and social risk management, supported by international collaborations. At the Vietnam ESG Forum, Deputy Governor of SBV Dao Minh Tu highlighted the development of green credit programs tailored to business needs. Nam A Bank, for instance, focuses on digitalization and greening strategies, offering green credit products for electric cars, renewable energy, and piloting carbon neutrality goals. This shift is vital for Vietnam’s green transition and sustainable economic growth.

Editor’s Note: Vietnam’s ESG Initiative aligns with the country’s Green Growth Strategy, emphasizing sustainable practices for global competitiveness. With a significant rise in green credit reported by the State Bank of Vietnam and increased integration of environmental risk management by credit institutions, Vietnam is advancing its green transition and fostering sustainable economic development.

Đà Nẵng City and the World Bank will foster collaboration in digital database management

The central city of Đà Nẵng and the World Bank (WB) are poised to intensify their collaboration in developing digital database management, marking a crucial step towards comprehensive digitalization and the realization of a ‘smart’ city. Vice Chairman Hồ Kỳ Minh, representing the city’s People’s Committee, has urged WB support for leveraging digital database solutions to benefit both communities and businesses. With 1,200 open data sources already operational, Đà Nẵng plans to introduce smart applications and platforms accessible to all city users, recognizing the pivotal role of data centrality in the digitalization process across government, economy, and society, as articulated by Minh.

In recent years, Đà Nẵng has made significant strides in its digital journey, including the implementation of an e-Government system in 2014, enabling smart connections in critical sectors such as air control, water management, and public services. However, challenges persist, particularly concerning legal frameworks, policy constraints, and human resource shortages. These hurdles underscore the need for support and expertise from the WB. Kim Leng Tan, a WB expert, highlights the transformative potential of robust digital data management, emphasizing its role in enhancing efficiency, control, and system safety while ensuring compliance with legal regulations. As Đà Nẵng collaborates with partners like Viettel and FPT in a comprehensive digital transformation across various sectors, its ambition to join the ranks of ASEAN smart cities by 2030 signals a steadfast commitment to leveraging technology for sustainable development. Notably, the WB’s ongoing investment in key infrastructure projects, including a recent $100 million allocation to Đà Nẵng University, underscores its dedication to supporting the city’s digital aspirations.

Editor’s Note: Đà Nẵng City and the World Bank are strengthening their collaboration to advance digital database management, a critical step towards realizing a ‘smart’ city vision. With a focus on leveraging digital solutions to benefit communities and businesses, Đà Nẵng aims to enhance efficiency and connectivity across various sectors, supported by the expertise and investment from the WB.

MITI: Malaysia and Brazil to work together to grow semiconductor sector

KUALA LUMPUR: The Ministry of Investment, Trade, and Industry (MITI) has announced that Malaysia and Brazil have agreed to strengthen collaboration in the semiconductor sector. The agreement was reached following discussions with Brazil’s Ministry of Development, Industry, Commerce and Services, and the Ministry of Foreign Affairs during MITI’s Trade & Investment Mission to Brasilia and Rio de Janeiro, Brazil, held from May 19 to May 23, 2024.

Liew Chin Tong, Deputy Minister of Investment, Trade, and Industry headed the MITI delegation to Brazil. “Both nations will utilise their respective industrial development plans, namely the New Industrial Master Plan (NIMP 2030) and Nova Industria Brazil 2033, to enhance cooperation in the semiconductor industry,” it said.

Editor’s Note: The strengthened collaboration between Malaysia and Brazil in the semiconductor sector, as announced by the Ministry of Investment, Trade, and Industry, signifies a promising step towards mutual economic growth and development. With both nations leveraging their industrial development plans, such as NIMP 2030 and Nova Industria Brazil 2033, this partnership holds great potential for advancing technological innovation and fostering economic resilience. The planned allocation of fiscal support and upcoming bilateral meetings further underscore the commitment to deepening economic ties and capitalizing on shared opportunities for prosperity.


Govt targets RM500bil investments for National Semiconductor Strategy

KUALA LUMPUR: The government aims to attract at least RM500 billion in investments for Phase 1 of the National Semiconductor Strategy (NSS) which is spearheaded by the International, Trade and Industry Ministry (MITI). In his keynote address at the launch of Semicon Southeast Asia 2024, Prime Minister Datuk Seri Anwar Ibrahim said the investments were among the five targets from NSS that was launched in April, this year.

He also said that Phase 1 of NSS would involve domestic direct investment (DDI) focusing on Integrated Circuit (IC) design, advanced packaging and manufacturing equipment and foreign direct investment (FDI) focusing on wafer fabs and manufacturing equipment. “For the second target, we want to establish at least 10 local companies in the design and advanced packaging with revenues between RM1 billion to RM4.7 billion, and at least 100 semiconductor-related companies with revenues close to RM1 billion, creating higher wages for Malaysian workers by Phase 2,” he said.

Editor’s Note: The National Semiconductor Strategy outlined by Prime Minister Datuk Seri Anwar Ibrahim presents an ambitious plan to position Malaysia as a global leader in the semiconductor industry. With targets set to attract significant investments, develop local companies, and establish Malaysia as a research and development hub, the strategy signifies a strategic move towards technological advancement and economic growth. Emphasizing upskilling, innovation, and collaboration, Malaysia aims to harness semiconductor technologies for societal benefit, promising a transformative future for the nation’s semiconductor sector.

5 new Smart dealerships appointed across Peninsular Malaysia, East Malaysia expansion in 2024

The official importer and distributor of Smart vehicles in Malaysia and Thailand, Proton New Energy Technology Sdn Bhd (PRO-NET) has appointed five new dealerships to be in charge of Smart electric vehicles (EV) in Peninsular Malaysia. Stationed across the Peninsular in strategic areas such as Bangsar, Ipoh, Penang, Kedah, and Melaka, the appointed dealerships include Smart Mobility, GB Auto, Eleganz Lifestyle, Lee Motors, and Sigma Energy.

The Smart Mobility dealership will be located in Bangsar, Kuala Lumpur, and is set to target a diverse spectrum of customers. This includes expatriates and high-profile corporate individuals.

Editor’s Note: The appointment of five new dealerships for Smart electric vehicles in Peninsular Malaysia by PRO-NET signifies a strategic expansion in the region’s EV market. With locations strategically placed across key areas like Bangsar, Ipoh, Penang, Kedah, and Melaka, the move aims to cater to diverse customer segments and enhance accessibility. This initiative underscores a commitment to promoting sustainable mobility solutions and reflects a proactive approach towards innovation and customer satisfaction in the automotive industry.