the practical toolkit for doing business in south east asia
DESCRIPTION
UKTI Presentation given at the Practical Toolkit for Doing Business In South East Asia event at The Oval Kia, London on 18 October 2012.TRANSCRIPT
The Practical Toolkit for Doing Business in South East Asia
Thursday 18th October
The Kia Oval
rbs.co.uk/international
Connecting your business to Asia Banking Advice & Help
18 October, The Kia Oval, London.
3rbs.co.uk
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&A
3
rbs.co.uk/international4
Potential Challenges for companies trading internationally• Time
• Distance
• Local business customs and practices
• Ease and effectiveness of communication
• Ability of the trading parties to meet their obligations
• Trust
• ‘Plan B’ if something goes wrong?
• Logistics
• Insurance
• Risks and risk management
• Getting Paid
Common Business Needs
Risk Mitigation
Finance Cash
Concerns and Challenges
rbs.co.uk/international
Mitigating Risk
Exporter Importer
Mitigating Risk
6rbs.co.uk
Trade Cycle and Working Capital
6
Trade Cycle and Working Capital
7rbs.co.uk
What support can a banking partner provide?
• Understanding a Businesses Trade Cycle• Trade Products• Trade Finance – to match the Trade Cycle and Working Capital need• New forms of finance – UKEF supported facilities• Accounts domiciled in Asia in local currency• Access to various international payment mechanisms• Visibility and electronic delivery
Working Capital Managing Risk
How can RBS/Natwest help?
Developing the right solutions
8rbs.co.uk
RBS / Natwest can help
8
Long History in Asia
We are present in 10 countries in the region, employing over 7,500 staff and servicing over 75,000 accounts.
Global Presence
Partner banks
Branch/representative office; cash, clearing and trade capabilities
Partner banks
Branch/representative office; cash, clearing and trade capabilities
Partner banks
Branch/representative office; cash, clearing and trade capabilities
• RBS is currently ranked among the top 10 foreign banks in Asia
• We have 2,000 Electronic Channel Clients and process more than 100,000 transactions per day
• We process more than 8 million cheques and issue over 23,000 Letters of Credit per 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
How can RBS/Natwest help?
9rbs.co.uk
Helpful solutions and guidance for exporters/importers
Rob Keller
rbs.co.uk/international
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%
Innovations designed to help International trading businesses
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
rbs.co.uk/international
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
Innovations designed to help International trading businesses
• 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
Helping businesses secure export funding
rbs.co.uk/international
Help & Guidance
• Local experts & an ‘International’ Hotline 0800 210 0235
• Guide to International Trade
• Internet (Education & tools):
www.natwest.com/international
www.rbs.co.uk/international
Government Schemes for Exporters
The Practical Toolkit for Doing Business in South East Asia
Thursday 18th October
The Kia Oval
14Business | Individual | Not for Profit www.taylorvinters.comBusiness | Individual | Not for Profit www.taylorvinters.com
LEGAL GUIDANCE
UKABC, UKTI & RBS 18 October 2012
15www.taylorvinters.com
LAWYERS WITH A
CAMBRIDGE ATTITUDE
Business | Individual | Not for ProfitBusiness | Individual | Not for Profit www.taylorvinters.com
Our story Environment Set-up
Tax
Networking
Funding
Future
Launching
Doing deals
Talent
Taylor Vinters LLP:•Cambridge, London and
Singapore•Technology, investment
and private wealth•Focus on hi-growth tech companies and MNCs in
SE Asia•In Singapore 3 years
•Opened full-time office 2011Me:
•Technology lawyer•International practice•Strategic leadership
Taylor Vinters LLP:•Cambridge, London and
Singapore•Technology, investment
and private wealth•Focus on hi-growth tech companies and MNCs in
SE Asia•In Singapore 3 years
•Opened full-time office 2011Me:
•Technology lawyer•International practice•Strategic leadership
16www.taylorvinters.com
LAWYERS WITH A
CAMBRIDGE ATTITUDE
Business | Individual | Not for ProfitBusiness | Individual | Not for Profit www.taylorvinters.com
Our story Environment Set-up
Tax
Networking
Funding
Future
Launching
Doing deals
Talent
• Legal systems• IP protection• Governance
and stability• Approach to
contracting• Attitude to rule
of law• Reality of enforceability
• Legal systems• IP protection• Governance
and stability• Approach to
contracting• Attitude to rule
of law• Reality of enforceability
17www.taylorvinters.com
LAWYERS WITH A
CAMBRIDGE ATTITUDE
Business | Individual | Not for ProfitBusiness | Individual | Not for Profit www.taylorvinters.com
Our story Environment Set-up
Tax
Networking
Funding
Future
Launching
Doing deals
Talent
• Soft or hard landing?• Documenting
partnerships• Corruption and
bribery compliance• Transparency & ease
of set up• Immigration
• Regulated sectors need extra care
• Issues arise on transition
• Plan for evolution of your business
structure
• Soft or hard landing?• Documenting
partnerships• Corruption and
bribery compliance• Transparency & ease
of set up• Immigration
• Regulated sectors need extra care
• Issues arise on transition
• Plan for evolution of your business
structure
18www.taylorvinters.com
LAWYERS WITH A
CAMBRIDGE ATTITUDE
Business | Individual | Not for ProfitBusiness | Individual | Not for Profit www.taylorvinters.com
19www.taylorvinters.com
LAWYERS WITH A
CAMBRIDGE ATTITUDE
Business | Individual | Not for ProfitBusiness | Individual | Not for Profit www.taylorvinters.com
20www.taylorvinters.com
LAWYERS WITH A
CAMBRIDGE ATTITUDE
Business | Individual | Not for ProfitBusiness | Individual | Not for Profit www.taylorvinters.com
Our story Environment Set-up
Tax
Networking
Funding
Future
Launching
Doing deals
Talent
• Key driver in choice of location• Regime and
incentives are equally important
• Corporation tax rates
• R&D tax relief• Personal tax rates
• Treatment of dividends & capital
gains• Withholding tax• Double taxation
treaties
• Key driver in choice of location• Regime and
incentives are equally important
• Corporation tax rates
• R&D tax relief• Personal tax rates
• Treatment of dividends & capital
gains• Withholding tax• Double taxation
treaties
21www.taylorvinters.com
LAWYERS WITH A
CAMBRIDGE ATTITUDE
Business | Individual | Not for ProfitBusiness | Individual | Not for Profit www.taylorvinters.com
22www.taylorvinters.com
LAWYERS WITH A
CAMBRIDGE ATTITUDE
Business | Individual | Not for ProfitBusiness | Individual | Not for Profit www.taylorvinters.com
Our story Environment Set-up
Tax
Networking
Funding
Future
Launching
Doing deals
Talent
• World-class networking cities
• Britcham• Amcham
• Eurocham• Business development
culture• Centres for conference
activity• Transport hubs
• World-class networking cities
• Britcham• Amcham
• Eurocham• Business development
culture• Centres for conference
activity• Transport hubs
23www.taylorvinters.com
LAWYERS WITH A
CAMBRIDGE ATTITUDE
Business | Individual | Not for ProfitBusiness | Individual | Not for Profit www.taylorvinters.com
Our story Environment Set-up
Tax
Networking
Funding
Future
Launching
Doing deals
Talent
• Private vs public funding• Smaller-name investment
funds and angels• Government remains a
major source of funding• Check industrial policy
• Legally complex
• Private vs public funding• Smaller-name investment
funds and angels• Government remains a
major source of funding• Check industrial policy
• Legally complex
24www.taylorvinters.com
LAWYERS WITH A
CAMBRIDGE ATTITUDE
Business | Individual | Not for ProfitBusiness | Individual | Not for Profit www.taylorvinters.com
Our story Environment Set-up
Tax
Networking
Funding
Future
Launching
Doing deals
Talent
• Hard or soft landing?• Due diligence and
documentation• Service vs Product
businesses• Commitment
• Brand and credibility vital
• Relationships will take time
• Local partners/employees
important• Regional strategy
• Hard or soft landing?• Due diligence and
documentation• Service vs Product
businesses• Commitment
• Brand and credibility vital
• Relationships will take time
• Local partners/employees
important• Regional strategy
25www.taylorvinters.com
LAWYERS WITH A
CAMBRIDGE ATTITUDE
Business | Individual | Not for ProfitBusiness | Individual | Not for Profit www.taylorvinters.com
Our story Environment Set-up
Tax
Networking
Funding
Future
Launching
Doing deals
Talent
• Expat vs local?• Immigration
• Check where you sit with industrial
policy• Brand and credibility vital to
recruitment• Light-weight
employment protection
• Churn issues• Reward and
remuneration• Expat tax
• Expat vs local?• Immigration
• Check where you sit with industrial
policy• Brand and credibility vital to
recruitment• Light-weight
employment protection
• Churn issues• Reward and
remuneration• Expat tax
26www.taylorvinters.com
LAWYERS WITH A
CAMBRIDGE ATTITUDE
Business | Individual | Not for ProfitBusiness | Individual | Not for Profit www.taylorvinters.com
Our story Environment Set-up
Tax
Networking
Funding
Future
Launching
Doing deals
Talent
• Generally a highly sophisticated market• Process more
important than contract
• Discipline• Take care with
negotiation style• Anticipate face to
face negotiation• Use of intermediaries
• Some specialised areas may require you to educate the
market
• Generally a highly sophisticated market• Process more
important than contract
• Discipline• Take care with
negotiation style• Anticipate face to
face negotiation• Use of intermediaries
• Some specialised areas may require you to educate the
market
27www.taylorvinters.com
LAWYERS WITH A
CAMBRIDGE ATTITUDE
Business | Individual | Not for ProfitBusiness | Individual | Not for Profit www.taylorvinters.com
Our story Environment Set-up
Tax
Networking
Funding
Future
Launching
Doing deals
Talent
• Emerging markets building legal infrastructure
• Improvements in IP protection and enforcement
• Polarisation of choice of law
• Singapore and HK will dominate dispute
forum• Shift away from trade
protectionism• Move towards
tightening of immigration rules
• Emerging markets building legal infrastructure
• Improvements in IP protection and enforcement
• Polarisation of choice of law
• Singapore and HK will dominate dispute
forum• Shift away from trade
protectionism• Move towards
tightening of immigration rules
The Practical Toolkit for Doing Business in South East Asia
Thursday 18th October
The Kia Oval
Doing Business in Southeast AsiaStrategic Planning and Risk Assessment
Chris Torrens
Southeast Asia – risk environment
1
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
Macro to micro: risks in Southeast Asia
1
Event risk
Human Capital risk
Corporate risk
Sector risk
Country risk
Transnational risk Exposure to international regulation (e.g. FCPA) Risks at export destination Embargoes and sanctions
Political risk Operational risk Regulatory risk
Sector-specific regulatory risk Appropriation risk Operational risk
Ownership structure Related party transactions Corporate governance
Fraud and corruption risk Political exposure Reputational risks
Natural disasters Civil and workforce unrest M&A events
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
Indonesia
Challenges for business •Creaking infrastructure•Persistent and entrenched corruption – business/politics nexus•Difficulty of doing business – 129 out of 183 in World Bank Index•Complex regulatory environment•Terrorism and natural disasters - though not a major concern for business•More remote regions pose greater challenges•Health risk issues
• Sector risks• Nationalist political agendas versus
business pragmatism• Reactive regulation• Licensing problems and appropriation risk
• Corporate risks• Who owns the business, really?• Is the company’s plan really aligned with
your investment? • Human capital risks
• Where’s your money and what was it used for?
• What happens if that “well-connected” company is no longer so connected?
• Reputational risk eg environmental damage
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
Myanmar
Overview•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 environment
Key risks•Under-developed foreign investment environment•Opaque ownership structures – links to leadership•Fraud and malpractice widespread•Investor enthusiasm far ahead of reality – political, operational and infrastructure challenges remain
1
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
The Practical Toolkit for Doing Business in South East Asia
Thursday 18th October
The Kia Oval
The University of Nottingham Social and Cultural Understanding
The practical toolkit for setting-up business in South East Asia
Truly Global University
•4 UK Campuses; 2 international Campuses•First UK University to establish in Malaysia (2003) and China (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
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, institutions and individuals•Promotes effective communication at all levels•Improves business etiquette when working with industry
Respecting religious and cultural traditions
Importance 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
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 detail as 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
Successful Meetings (cont’d)
•Dress code-Generally business attire but expectations differ•Dinner
•See dinner as part of the meeting•Develop the relationship, bring in more personal information•Be aware of hosts dietary obligations
Importance of language•Differing levels of spoken English across SE Asian countries-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
Successful longer term business
•Engage with the right people-both key decision makers 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
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 visiting and hosting
The Practical Toolkit for Doing Business in South East Asia
Thursday 18th October
The Kia Oval
fst //
fst // www.fstthegroup.com
Brand and marketing planning for Southeast Asia
Speaker notes for UKTI practical toolkit for doing business in Southeast Asia
UKTI presentation // 2012
prepared for // practical toolkit delegates
presented by // Craig Watson
fst //
fst // www.fstthegroup.com
Why am I here?> Brand expert
> Broad experience of sales and marketing knowledge
> Some experience of SouthEast Asia market
fst //
fst // www.fstthegroup.com
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
UKTI presentation 2012
fst //
fst // www.fstthegroup.com
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 //
fst // www.fstthegroup.com
What fst stands for >freespirited thinkers
fst //
fst // www.fstthegroup.com
Section 1
The SEA market
fst //
fst // www.fstthegroup.com
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?
UKTI presentation 2012
fst //
fst // www.fstthegroup.com
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 4th largest population in the world at around 238m
*World bank ranking 2005-11, Wikipedia list of countries by GDP per capitahttp://en.wikipedia.org/wiki/List_of_countries_by_GDP_%28PPP%29_per_capita
fst //
fst // www.fstthegroup.com
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 //
fst // www.fstthegroup.com
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 //
fst // www.fstthegroup.com
Intelligent Environments // 2012
Section 2Your brand
fst //
fst // www.fstthegroup.com
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 //
fst // www.fstthegroup.com
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 //
fst // www.fstthegroup.com
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
UKTI presentation 2012
fst //
fst // www.fstthegroup.com
Brand power Looking at it another way – A good brand can help you to:
Become Rich AND Successful
fst //
fst // www.fstthegroup.com
Great brands are…> simple
> relevant
> consistent
> unique
fst //
fst // www.fstthegroup.com
Intelligent Environments // 2012
Section 3Brand proposition
fst //
fst // www.fstthegroup.com
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 //
fst // www.fstthegroup.com
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 //
fst // www.fstthegroup.com
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
UKTI presentation 2012
fst //
fst // www.fstthegroup.com
Intelligent Environments // 2012
Section 4Taking your brand to market
fst //
fst // www.fstthegroup.com
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?
UKTI presentation 2012
fst //
fst // www.fstthegroup.com
Developing a marketing planHaving 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 //
fst // www.fstthegroup.com
The ‘P’s’ of marketingpBased 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
UKTI presentation 2012
fst //
fst // www.fstthegroup.com
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?
UKTI presentation 2012
fst //
fst // www.fstthegroup.com
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
UKTI presentation 2012
fst //
fst // www.fstthegroup.com
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 //
fst // www.fstthegroup.com
Intelligent Environments // 2012
Section 5Our experience
fst //
fst // www.fstthegroup.com
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
UKTI presentation 2012
fst //
fst // www.fstthegroup.com
Progress> Moved to own dedicated office in Kampong Glam February 2012> Appointed medium weight designer 4th 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
UKTI presentation 2012
fst //
fst // www.fstthegroup.com
fst //
fst // www.fstthegroup.com
fst //
fst // www.fstthegroup.com
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
The Practical Toolkit for Doing Business in South East Asia
Thursday 18th October
The Kia Oval