As the global economy pivots towards regions with resilient growth potential, the Association of Southeast Asian Nations (ASEAN) has emerged as a top-tier investment destination. The region’s robust economic expansion, favorable regulatory environment, and investment-focused sectors—such as digital infrastructure, manufacturing, tourism, and renewable energy—continue to attract international investors. This article delves into the key opportunities for foreign direct investment (FDI) in ASEAN, emphasizing how individual countries like Thailand, Vietnam, and Indonesia are positioning themselves to capture these opportunities. By examining specific case studies and broader regional policies, the report underscores ASEAN’s potential for sustained economic growth through 2024 and beyond.
Investment opportunities abound in ASEAN
The economic transformation of ASEAN has positioned it as an appealing destination for investors seeking diversified portfolios and exposure to emerging markets. With a combined population of over 660 million and a GDP exceeding $3 trillion, ASEAN offers abundant growth opportunities. Its competitive edge is further enhanced by its geographic proximity to major economic hubs such as China, Japan, and India, and its proactive role in global supply chains. As a result, international investors are increasingly turning to ASEAN for its strong potential and high returns.
As mentioned by Curtis Chin in Yale Insights magazine: “As Asia takes a dominant role in the world economy, it’s worth looking beyond China and India to understand the region. Taken together, the ASEAN countries of Southeast Asia would be the world’s fifth-largest economy.”
Figure 1: CAGR of ASEAN for the 2013-2022 timeframe (HKDTC research)
Current investment landscape in ASEAN
ASEAN’s economic performance and FDI trends
Despite global economic uncertainties, ASEAN has showcased resilient growth, bolstered by strategic initiatives and investment-friendly policies. In 2023, the region attracted approximately $155 billion in FDI, with projections indicating robust growth into 2024 and beyond. The region’s average GDP growth rate of 5.3% over the past decade significantly outpaces many advanced economies, underscoring its potential as a dynamic market for foreign investments.
Investments are strategically directed toward sectors identified as critical for future economic growth, including digital infrastructure, renewable energy, and advanced manufacturing. These sectors are increasingly interconnected, as technological advancements fuel manufacturing efficiency and sustainable energy solutions become essential to ASEAN’s long-term economic strategies (ASEAN Investment Report 2023).
Figure 2: FDI origin in selected in ASEAN in 2023 (ASEAN investment report 2023)
Which country in ASEAN is mostly invested in?
In 2022, ASEAN countries highlighted varied levels of foreign direct investment (FDI), reflecting the diverse economic landscapes within the region. Singapore notably outperformed its neighbours, attracting a substantial $141.19 billion USD in FDI, highlighting its dominant position as a major financial hub in Southeast Asia. This figure exemplifies Singapore’s strategic economic importance and its robust appeal to global investors, contrasted with other nations’ performance (Statista 2022 FDI Report). Nevertheless, the whole region has seen remarkably prominent levels of FDIs due to the rise of new tiger economies like Vietnam, Malaysia, Thailand, or Indonesia.
Figure 3: FDI by selected ASEAN countries in 2022 (Statista)
Sector-specific growth opportunities
Digital Infrastructure
ASEAN is quickly establishing itself as a leader in digital transformation, particularly in countries like Singapore and Thailand, where investments in 5G networks, cloud computing, and cybersecurity are gaining significant momentum. The region’s digital economy is expected to exceed $330 billion by 2025, with substantial contributions from e-commerce, fintech, and digital health services (Statista Technology Report). For investors, this sector presents opportunities in both infrastructure development and tech innovations. Singapore’s Smart Nation initiative and Thailand’s Thailand 4.0 strategy exemplify national commitments to becoming digital leaders in the region.
Manufacturing
Vietnam and Indonesia are becoming central hubs for manufacturing within ASEAN, attracting foreign companies looking to diversify their supply chains away from traditional markets like China. This sector benefits from low labor costs, favorable tax regimes, and proximity to major global markets, making it highly attractive for foreign investments.
Tourism
The tourism sector plays a crucial role in the economies of countries like Thailand, Indonesia, and Vietnam. With the region’s rich cultural heritage and natural beauty, along with ongoing infrastructure developments, tourism is poised for a strong recovery and growth, promoting sustainable and eco-friendly travel experiences. Countries like Thailand, which accounts for 12% of its GDP from tourism, are implementing sustainable tourism strategies to attract more eco-conscious travelers. Indonesia’s Bali remains a global tourism hotspot, with substantial foreign investment in luxury resorts and eco-tourism projects.
Figure 4: Growth of selected economic sectors in ASEAN since 2026 (ASEAN investment report 2023)
What are the current key policies across ASEAN countries that are designed to attract and support foreign investment?
ASEAN has implemented a range of progressive policies, regulations, and frameworks to bolster its attractiveness for foreign direct investment (FDI). The ASEAN Economic Community (AEC) Blueprint 2025 is pivotal in this, promoting regional economic integration and market access for global businesses, aiming to establish ASEAN as a unified market and production base.
Specifically, in sectors like digital infrastructure and renewable energy, nations such as Singapore and Thailand offer incentives like tax breaks and streamlined business processes to spur investments. Initiatives like Singapore’s Smart Nation and Thailand’s Eastern Economic Corridor (EEC) provide significant opportunities for technology and sustainable energy investments (Singapore Smart Nation Initiative, Thailand EEC).
Additionally, the ASEAN Investment Incentives policy enhances support for the manufacturing and tourism sectors, offering both fiscal and non-fiscal incentives to foster infrastructure development and improve regional connectivity (ASEAN Investment Incentives).
These comprehensive measures underscore ASEAN’s commitment to maintaining a competitive edge as an economic powerhouse in Asia, facilitating robust foreign investment and regional prosperity.
ASEAN’s upcoming development plans: the case of Nusantara
Significant regional developments include Indonesia’s plan to relocate its capital from Jakarta to Nusantara in East Kalimantan presents new opportunities in real estate, urban planning, and infrastructure development. The capital relocation is expected to generate over $40 billion in investment opportunities across various sectors (Jakarta Globe). (Jakarta Globe).
On a more general level, the increasing living standard of the ASEAN population boosted by an increased GPD per capita and a raising middle-class is raising the demand for public infrastructure project that will have indirect loopholes growth effects that can only be beneficial to foreign investors.
Figure 5: ASEAN GPD per Capita VS DPD per Capita of other macro-regions (World Bank)
Final thoughts
ASEAN has something unique among any other macro-economic region, making it more than a region with a high ROI potential of a reserve of opportunities to diversify an investment strategy, ASEAN in, per se, a gateway to the economy of the 21st century. Looking at the world macro-economic regions, the typical investment dilemma is rarely fully solved, a high ROI usually coming with a high level of risk due to the political instability of fast-growing regions like Africa.
On the other hand, the contraction of the global economy since the Covid-19 crisis and the Ukraine war, especially since the destruction of North stream pipeline in the Baltic Sea that reduced brutally the German manufacturing industry made regions as USA and EU less attractive despite their remarkable political stability. In that context, the deeply integrated and diversified economy of ASEAN managed to create the best of both worlds. Combining a thriving economy like China, a safe and stable environment like EU with a diversified economy like the USA, no wonder that FDIs will keep on flowing towards the union creating more and more opportunities as the regions keeps on developing.
Figure 6: World’s macro-regions stakeholders mapping
Source: ASEAN Statistical Year Book 2023 edition; Bloomberg Live; Yale Insights; Statista, 2024; Thailand Board of Investment; Vietnam Briefing; World Economic Forum, 2024
Further Insight by our newest publication “Doing Business in ASEAN 2024 – 2025”
As global markets shift and businesses look for new opportunities, ASEAN stands out as a region primed for growth. Its diverse economies, commitment to sustainable development, and strategic position in global trade make it an ideal destination for foreign investment. Whether through infrastructure projects in tourism, high-tech manufacturing in Vietnam, or green energy initiatives in Indonesia, ASEAN continues to offer compelling opportunities for investors looking to capitalize on emerging markets.
With favorable investment policies, growing consumer markets, and competitive labor costs, ASEAN is well-positioned to remain a key player on the global investment stage. Unlock the potential of ASEAN and explore the opportunities awaiting you by downloading our “Doing Business in ASEAN 2024-2025” booklet today!
