VIETNAM REPORT. Compiled by: The American Chamber of Commerce (AmCham) in Singapore 1 Scotts Road #23-03/04/05 Shaw Centre Singapore AND

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1 VIETNAM REPORT Compiled by: The American Chamber of Commerce (AmCham) in Singapore 1 Scotts Road #23-03/04/05 Shaw Centre Singapore AND The United States Chamber of Commerce 1615 H St NW Washington DC

2 Copyright Standards This document contains proprietary research, copyrighted materials, and literary property of the American Chamber of Commerce in Singapore, AmCham HCMC, AmCham Hanoi, and the U.S. Chamber of Commerce. It is for the guidance of your company only, and is not to be copied, quoted, published, or divulged to others outside of your organization without the permission of the American Chamber of Commerce in Singapore, the U.S. Chamber of Commerce, AmCham Vietnam Ho Chi Minh City, and AmCham Hanoi. This document is of great value to the American Chamber of Commerce in Singapore, the U.S. Chamber of Commerce, AmCham HCMC, and AmCham Hanoi. Accordingly, international and domestic laws and penalties guaranteeing patent, copyright, trademark, and trade secret protection secure the ideas, concepts, and recommendations related within this document. No changes may be made to this document without the permission of the American Chamber of Commerce in Singapore, the U.S. Chamber of Commerce, AmCham HCMC, and AmCham Hanoi. 2

3 TABLE OF CONTENTS 1. Introduction 4 Research Background & Objectives 4 Survey Methodology 4 Brief Outline of Results 5 2. Business Outlook 6 Current Business Climate 6 Importance of ASEAN Markets in Global Business 6 Trade and Investment in ASEAN 8 Business Direction and Movement in ASEAN 10 ASEAN Integration 11 ASEAN Free Trade Agreements 12 Profit Outlook 13 Workforce Expansion 13 Expatriate Satisfaction Factors Impacting Business in Vietnam 15 Local Business Environment Factors 15 Major Strengths 15 Major Concerns 15 Other Local Business Environment Factors Conclusion 17 Appendices 18 (A) Sample Profile 18 Table A-1: Workforce and Turnover Table A-2: ASEAN Turnover Table A-3: Primary Responsibility (B) Local Factors Impacting Business 20 Table B-1: Satisfaction with Factors Table B-2: Satisfaction with Local Government (C) Expansion in ASEAN over the Next Two Years 21 Table C-1: Top 3 Reasons for ASEAN Expansion Table C-2: Top Reasons for ASEAN Importance over Next Two Years 3

4 1. INTRODUCTION Research Background & Objectives The American Chamber of Commerce in Singapore (AmCham Singapore) and the United States Chamber of Commerce, in cooperation with other AmChams in the ASEAN region, conducted a study among U.S. companies based in seven Southeast Asian countries: Cambodia, Indonesia, Malaysia, Singapore, the Philippines, Thailand, and Vietnam (Ho Chi Minh City and Hanoi). This study is now in its 11 th year. The purpose of the study is to understand members outlook on business growth in Southeast Asia and their perceptions about a series of local factors. The members surveyed were senior executives, working with a company held by or with an American majority interest. For the first time in 2012, multiple senior executives from each company were surveyed. AmCham Singapore and the U.S. Chamber of Commerce developed a survey design using a web-based instrument. This report presents the feedback received from executives of U.S. companies in VIETNAM. Survey Methodology Survey Scope: Senior Executives of U.S. Companies based in Vietnam Sample Size: A list of 367 AmCham members with contacts was provided by AmCham Vietnam (Hanoi and HCMC). Response rate was about 18% (67) at the end of the data collection period. Data Collection Method: Web-based, self-administered survey. No enforcement on participation. Data Collection Period: June 15, 2012 to July 3, 2012 Note 1: Percentages may not add up to 100% due to respondents choosing I don t know or Not applicable. Note 2: For the first time in 2012, multiple senior members of each U.S. company were asked to complete the survey. Sample Profile (See Appendix A) Most respondents (73%) are responsible for only Vietnam. The percentage of respondent member companies in the services sector and manufacturing sector were 44% and 46% respectively. 54% of respondents have a workforce between 50 and 500 employees in the region. The largest portion of respondents (52%) had a turnover of between $1 million and $50 million in Vietnam in Turnover in Vietnam accounted for less than 5% of global turnover for 65% of respondents, and between 5% and 25% of ASEAN turnover for 50% of respondents. Singapore had the next highest turnover for 20% of respondents in Vietnam. 4

5 BRIEF OUTLINE OF RESULTS BUSINESS OUTLOOK Figure 2: Economic Outlook for Investment Opportunities in ASEAN ASEAN Economic Outlook: 90% of respondents maintain a positive or very positive outlook for the ASEAN region as an investment opportunity for their companies. Current Business Climate: Respondents facing significant financing constraints increased from 19% in 2011 to 39% in Most respondents (62%) do not face higher costs of borrowing. Importance of ASEAN Markets in Global Business: 72% of respondents report that ASEAN markets have increased in importance to their companies in the past two years. Most respondents (76%) expect ASEAN importance to increase in the next two years. Business Direction and Movement in ASEAN: 73% of respondents plan to expand in Profit Outlook: 57% expect a profit increase in % expect a profit increase in Figure 3: Location of Expansion in ASEAN Workforce Expansion: 58% expect a workforce increase in % expect an increase of 5 to 15%. Figure 1: Profit Outlook 2013 Major Strengths (% Satisfied) Major Concerns (% Dissatisfied) Personal security (78%) Corruption (77%) Sentiment towards the U.S. (68%) Laws and Regulations (59%) Stable government and political Infrastructure (57%) system (62%) Availability of low cost labor (55%) Ease of moving products through customs (43%) 5

6 2.1 Current Business Climate 2. BUSINESS OUTLOOK Table 2.1 Financing Constraints and Costs of Borrowing Is your company facing significant financing constraints? Yes 47% 30% 19% 39% No 53% 70% 81% 61% Is your company facing higher costs of borrowing? Yes 30% 48% 38% 39% No 70% 52% 62% 62% The percentage of companies facing significant financing constraints increased for the first time in 2012, with 39% respondents facing significant financing constraints. This is the highest percentage of companies facing financial constraints in Vietnam since % of respondents do not face higher costs of borrowing, consistent with 2011 s figure. 2.2 Importance of ASEAN Markets in Global Business Table Importance of ASEAN over past two years Have ASEAN markets become more important or less important, in terms of worldwide revenue, to your company in the past two years? More Important 70% 60% 50% 72% Remained the Same 26% 25% 40% 27% Less Important 4% 0% 2% 2% The percentage of respondents that believe ASEAN markets have become more important in terms of worldwide revenue to their company in the last two years has increased for the first time in 2012, reaching an all-time high of 72%. Table Importance of ASEAN over next two years Does your company feel that ASEAN markets will be more important, less important, or have the same importance for your company s worldwide revenues in the next two years? More Important 67% 70% 72% 70% 69% 76% Remain the Same 31% 28% 28% 14% 26% 19% Less Important 0% 2% 0% 2% 0% 3% The percentage of respondents believing that ASEAN markets will have more importance for their company s worldwide revenue in the next two years reached an all-time high of 76%, increasing for the first time since

7 Table Reasons why ASEAN markets will be more important in worldwide operations and revenues in the next two years Economic Recovery 65% 72% 72% 2% Improvement in Infrastructure 35% 41% 52% 0% Increased Availability of Trained Personnel 20% 13% 14% 4% Favorable Government Policies 20% 28% 24% 4% Limited Growth Opportunities in Other 48% 36% 52% 26% Regions Stable Political Conditions 40% 33% 28% 26% Change in Business Strategy 25% 39% 28% 28% Other 33% 10% 17% 12% *In 2012, respondents were still allowed to select 3 responses, but data was tabulated to add up to 100%. Change in business strategy replaced economic recovery as the top reason for believing that ASEAN markets will become more important in the next two years. Limited growth opportunities in other regions and stable political conditions tied for the second most important reason (26%). Economic recovery, improvements in infrastructure, increased availability of trained personnel, and favorable government policies were least important. 100% of respondents who indicated that ASEAN markets will become less important in the next two years indicated that the reason was better growth prospects in other regions. 7

8 2.3 Trade and Investment in ASEAN Figure Outlook on ASEAN as an investment opportunity Thinking about the ASEAN region, what is your outlook for the entire region as an investment opportunity for your company. Neutral, 9% Very Positive, 49% Positive, 41% Figure Trade and investment in ASEAN over the past two years Level of trade and investment in the ASEAN region over the past two years Decreased, 6% Decreased Significantly, 2% Remained the Same, 12% Increased Significantly, 18% Increased, 61% The large majority of respondents (90%) have a positive or very positive outlook on the ASEAN region as an investment opportunity. No respondents reported a negative or very negative outlook. Over the past two years, 79% of respondents indicated that their company has increased or significantly increased their level of trade and investment in the ASEAN region. Only 8% have decreased trade and investment. 8

9 Figure Trade and investment in ASEAN over the next 5 years Do you expect your company's activity to increase or decrease in the ASEAN region over the next 5 years? Remain the Same, 8% Decrease, 2% Increase Significantly, 25% Increase, 63% Table Trade and investment percentage growth over next 5 years By about what percentage do you believe trade and investment will grow in the ASEAN region over the next 5 years? Percentage Growth 0-10% 11-20% 21-40% % Average Percentage Respondents 19% 33% 25% 23% 31% TOP THREE REASONS WHY YOUR COMPANY S TRADE AND INVESTMENT WILL INCREASE IN THE ASEAN REGION: Stable Government and Political System (27%) Increasing Market Share (25%) Diversification of Customer base (9%) The large majority of respondents in Vietnam (88%) expect trade and investment in the ASEAN region to increase or increase significantly over the next 5 years. 33% of respondents predicted the growth of trade and investment in ASEAN to be about 11-20% over the next 5 years. The average predicted growth is 31%. Respondents indicated that the top reason that their company will increase trade and investment in ASEAN is the presence of a stable government and political system (27%). The second reason is increasing market share (25%). Economic recovery, potential for business growth, reasonable production costs, availability of raw materials, availability of trained personnel, lack of growth in current market/countries, high level of personal security, low level of corruption, adequate laws and regulations to protect business, adequate laws and regulations to encourage foreign investment, low level of local protectionism, and weak competition in market/countries all received less than 7% of responses. 9

10 2.4 Business Direction and Movement in ASEAN Table Expansion in Vietnam 2012 In Vietnam, does your company plan to expand or contract? Expand Significantly 10% Expand 63% Remain the Same 21% Contract 2% Contract Significantly 0% Table Reasons for expansion in Vietnam Reasons why companies plan for business expansion in Vietnam Potential for Business Growth 4% Availability of Trained Personnel/Efficient Manpower 15% Increasing Market Share 62% Diversification of Customer Base 15% Lack of Growth in Current Market/Countries 4% The majority of respondents indicated that their companies plan to expand in Vietnam (73%). Only 2% indicated that they plan to contract, and none expect to contract significantly. The top three reasons for expansion in Vietnam are increasing market share, diversification of customer base, and availability of trained personnel/efficient manpower. More details can be found in Appendix C, Table C-1. Table Location of ASEAN Expansion Into which specific ASEAN country or countries does your company plan to expand? Brunei 0% 0% 4% 2% Cambodia 5% 8% 4% 2% Indonesia 5% 5% 11% 0% Laos 3% 5% 4% 3% Malaysia 8% 5% 4% 3% Myanmar 0% 0% 4% 5% Philippines 5% 0% 0% 2% Singapore 0% 0% 0% 3% Thailand 8% 5% 4% 5% Vietnam 69% 71% 67% 75% Vietnam remains the most popular choice of country for expansion, reaching an all-time high of at 75%. Myanmar and Thailand, at 5% each, are the second most selected countries. Indonesia is the only country that received no responses. 10

11 Table Diversification from China into ASEAN Does your company plan to diversify some investments or business from China into ASEAN over the next two years? Yes 34% 24% No 71% 43% *Responses do not add up to 100% due to Not Sure option 24% of respondents in Vietnam stated that their companies are planning to diversify some investments or business from China into ASEAN over the next two years, a significant decrease from 2011 s figure of 34%. 2.5 ASEAN Integration Table Importance of ASEAN Integration Is ASEAN integration important to helping your company do business in the region? Yes 74% 70% 78% 76% No 26% 30% 22% 8% *Responses do not add up to 100% due to Not Sure option ASEAN integration continues to be important in % of respondents believed it to be important to helping their companies do business, similar to 2011 s figure of 78%. Table ASEAN Regional Strategies ASEAN is seeking to develop the region as a single market and production base. Does your company have an ASEAN regional strategy based on these goals? Yes 34% No 36% Not Sure 30% Respondents in Vietnam are fairly evenly split on whether they were developing a regional strategy based on ASEAN goals. 11

12 2.6 ASEAN Free Trade Agreements FTA(s) Figure Utilizing FTA s 80% 70% 60% 50% 40% 30% 20% 10% 0% Can your company utilize the provisions of the agreement to export goods or services from ASEAN to each specified country, import from those countries into ASEAN, or expand investment from ASEAN into each specified country? 28% 49% 34% Australia and New Zealand 24% 34% 18% 31% 28% 27% 28% China India Japan Korea Yes No Figure Importance of FTA s 120% How important is the agreement with each specified country to your company s investment plans in ASEAN? 100% 80% 60% 15% 17% 15% 39% 39% 46% 25% 15% 39% 40% 20% 0% 23% 15% 8% Australia and New Zealand 33% 23% 11% 15% 67% 8% 15% 23% China India Japan Korea Not at all Important Unimportant Neutral Important Extremely Important The ASEAN FTA with China can be utilized by the largest percentage of respondents in Vietnam (49%). The ASEAN FTA with Korea and Australia and New Zealand can be utilized by the lowest percentage of respondents in Vietnam (both 28%). Those respondents who can utilize the FTA with Japan rated it the most important, with 82% of respondents considering it important or extremely important. 12

13 2.7 Profit Outlook Compared to 2011, do you expect your profits in ASEAN in 2012 and 2013 to increase, decrease, or remain the same? Figure 2.7 ASEAN profit outlook Year of Survey Current Increase 76% 86% 69% 47% 62% 58% 57% Year Remain 12% 9% 21% 22% 29% 22% 31% Profit Expectation Coming Year Decrease 10% 6% 10% 22% 2% 12% 9% Increase 74% 86% 88% 80% 79% 70% 82% Remain 10% 6% 8% 11% 11% 15% 16% Decrease 7% 6% 4% 4% 0% 5% 0% Profit outlook remains positive, with the majority respondents (57%) expecting profits to increase in the current year, and 82% expecting profit increases in the coming year. The 2012 expectations are higher than those in 2011, in which 58% expected profits to increase for the current year, and 70% expected profits to increase for the coming year. 2.8 Workforce Expansion Table Workforce Expansion in 2012 Do you expect your company s total number of employees to increase, decrease, or remain the same in 2012? Year Increase 59% 67% 72% 71% 78% 79% 54% 75% 74% 58% Same 41% 30% 26% 29% 19% 18% 44% 25% 26% 36% Decrease 0% 3% 2% 0% 3% 3% 2% 2% 0% 6% Table Percentage of Employee Increase By what percentage will the number of employees increase? Year of Survey Workplace 0 to less than 5% 3% 10% Expansion 5 to less than 34% 42% 37% 50% 25% 29% 32% 35% 10% 29% 26% 10 to less than 15% 16% 26% 32% 37% 40% 36% 43% 26% 25% 34% 15 to less than 20% 23% 13% 20 to less than 50% 11% 9% 7% 13% 36% 21% 23% 22% 19% 10% >50% 14% 13% 13% 10% 15% 16% 13% 7% 9% 13% For the first time in 2011, 0-10% was further separated into 0-5% and 5-10% % was separated into 10-15% and 15-20%. 13

14 Most respondents (58%) expect the number of employees to increase, a large decrease from 2011 s figure of 74%. Out of these respondents, 52% expect an increase of 5 to 15. In 2012, 6% of respondents expect a decrease in the company s total number of employees, whereas no respondents expected a decrease in Of these companies, 50% expect the decrease to be from 5 to 10%. 2.9 Expatriate Satisfaction Table 2.9 Expatriate Satisfaction Year of Survey Does your company regularly receive requests from employees based in other locations to work in Vietnam? Yes 44% 29% 21% 37% No 56% 71% 79% 63% Are your expatriate employees generally satisfied with their assignments in Vietnam? Yes 89% 82% 84% 92% No 11% 18% 16% 8% Do your expatriate employees attempt to extend their time in Vietnam? Yes 72% 71% 81% 76% No 28% 29% 19% 24% Overall expatriate employee satisfaction remains high at 92%, an increase from 2011 s figure of 84%. There is a decrease in the percentage of respondents who had expatriate employees attempt to extend their time in Vietnam, from 81% in 2011 to 76% in Most respondents receive requests from expatriate employees to extend their time in Vietnam (76%). 14

15 3. FACTORS IMPACTING BUSINESS IN VIETNAM Respondents were asked to rate their satisfaction with a series of local factors that could affect their business. The percentage of respondents who are satisfied or extremely satisfied with a given factor can be used to identify factors of strength. Conversely, the percentage of respondents dissatisfied or extremely dissatisfied with a particular factor can be used to identify areas held as concerns. 3.1 Local Business Environment Factors Major Strengths (Responded Satisfied or Extremely Satisfied at a considerable rate) Table 3.1.1: Time Comparison of satisfaction with major strengths. Factors Personal security 78% 82% 84% 72% 72% 73% 73% 76% 64% 72% Sentiment towards the U.S. 65% 58% 70% 65% 72% 76% 68% Stable government & political system 62% 82% 71% 61% 66% 70% 63% 54% 62% Availability of low cost labor 64% 58% 55% 51% 63% 59% 55% See Appendix B, Table B -1 for responses on all listed factors). *Empty boxes indicate areas that were neither strengths nor concerns for the year indicated. Responses bolded represent that year s response with the highest rate of satisfaction. Vietnam did not gain or lose any major strengths in Vietnam s business factor with the highest rate of satisfaction in 2012 is personal security (72%). It has returned to the top spot after coming in second after sentiment towards the U.S. in Sentiment towards the U.S. has fallen to 68% in 2012 from 76% in 2011, but it still has the second highest rate of satisfaction. Satisfaction with stable government & political system increased from 54% in 2011 to 62% in Major Concerns (Responded Dissatisfied or Extremely Dissatisfied at a considerable rate) Table 3.1.2: Time Comparison of dissatisfaction with major concerns. Factors Laws & Regulations 67% 58% 64% 62% 53% 50% 48% 48% 60% 59% Corruption 79% 70% 68% 79% 67% 69% 77% 74% 72% 77% Infrastructure 66% 62% 62% 46% 55% 56% 60% 73% 73% 57% Ease of moving products through 52% 43% customs (See Appendix B, Table B-1 for responses on all listed factors). *Empty boxes indicate areas that are neither strengths nor concerns in those years. Responses bolded represent that year s response with the highest rate of dissatisfaction. Vietnam lost housing costs, local protectionism, and availability of trained personnel as major concerns in Corruption has the highest dissatisfaction rating of the local factors at 77%, an increase from last year s figure of 72%. 15

16 3.2 Other Local Business Environment Factors Government Institutions Respondents overall are neutral towards local government institutions. Immigration received the highest satisfaction rating at 29%, and customs received the highest dissatisfaction rating at 43%. See Appendix B, Table B-2 for more details. Importing Goods Table 3.2 Importing Goods into Vietnam Is importing goods into Vietnam a significant problem for your company? Yes 21% No 79% 79% of respondents do not believe that importing goods into Vietnam is a significant problem for their company. 16

17 4. CONCLUSION Outlook The vast majority of respondents from Vietnam maintain a positive attitude towards ASEAN as an investment opportunity. However, financing constraints have increased in the past year with 39% of respondents mentioning it as a significant issue. The majority of respondents do not face either similar or lower costs of borrowing as compared to Profit outlook continues to be optimistic. 57% expect an increase in 2012 and an even greater percentage anticipate a boost in profits the following year. The majority of respondents, roughly 60%, expect a workforce expansion in 2012, although the size of the anticipated increase is smaller than in similarly developed ASEAN nations. ASEAN ASEAN markets continue to grow. The 72% who stated that ASEAN markets are rising in importance for global business rank stable political conditions, limited growth opportunities in other regions, and changes in business strategy as the top reasons. 79% of respondents have expanded their business in the region over the past two years and 73% plan to do so in the The main reasons for expansion are increasing market share, efficient manpower, and diversification of customer base. Three quarters of those looking to expand plan on doing so in Vietnam. Despite a wide range of positive factors, however, the region continues to be negatively impacted by corruption and poor infrastructure. ASEAN free trade agreements, in particular the ASEAN-Japan FTA, are highly valued by respondents and are important to expanding their businesses. Location Specific Vietnam s major strengths are derived from its stable political environment and availability of low cost labor. Respondents state that there is a high level of personal security and positive sentiment towards the United States, characteristics that help foster a favorable environment for foreign businesses, but these strengths are countered by high levels of corruption and unclear regulations. The tax structure and ease of moving products through customs pose problems. Although companies do not generally receive requests to work in Vietnam, once there, expatriate worker satisfaction is above 90% and most employees ask to extend their stay.. 17

18 APPENDIX A: Sample Profile APPENDICES Table A-1: Workforce and Turnover Survey Year Scope of Responsibility Only one country 55% 63% 64% 71% 61% 74% 70% 67% 67% 73% Multiple countries 44% 37% 36% 29% 39% 26% 30% 33% 33% 27% Size of Current Workforce in Region Company s Past Year Turnover in Vietnam (USD) Below 50 employees 62% 42% 31% 28% 39% 40% 35% 36% 22% 20% 50 to <500 employees 28% 50% 37% 38% 31% 47% 48% 44% 56% 54% 500 to <1000 employees 8% 5% 10% 13% 12% 5% 7% 11% 12% 12% 1000 to <1500 employees 2% 3% 10% 9% 2% 3% 0% 2% 2% 3% 1500 to <2000 employees 0% 0% 0% 2% 2% 2% 4% 2% 0% 2% 2000 employees or above 0% 0% 12% 11% 14% 3% 6% 4% 5% 9% Below $1 million 36% 24% 8% 16% 13% 13% 9% 13% 15% 15% $1 to <$50 million 66% 59% 56% 40% 48% 64% 56% 55% 63% 52% $50 to <$100 million 2% 8% 14% 13% 13% 10% 9% 13% 5% 9% $100 to <$500 million 7% 8% 14% 16% 15% 8% 18% 9% 12% 12% $500 to <$1 billion 0% 1% 2% 7% 4% 2% 0% 2% 0% 3% $1 billion or above 0% 0% 6% 4% 4% 3% 6% 0% 0% 2% Past Year s Turnover As Percentage of Company s Global Turnover Below 5% 64% 64% 57% 63% 65% 5 to <25% 13% 15% 16% 24% 25% 25 to <50% 7% 9% 2% 3% 5% 50 to <75% 16% 6% 2% 0% 2% 75 to <100% 4% 12% 5% 3% 100% 2% 12% 5% 2% Past Year s Turnover as Percentage of Company s Total ASEAN Turnover ASEAN Country That Holds the Next Largest Turnover for Company Table A-2:ASEAN Turnover Below 5% 35% 46% 37% 16% 5 to less than 25% 42% 24% 37% 50% 25 to less than 50% 6% 6% 5% 20% 50 to less than 75% 8% 4% 3% 0% 75 to less than 100% 4% 6% 3% 6% 100% 6% 14% 15% 8% Vietnam 20% 41% 34% 15% Cambodia 2% 4% 3% 3% Indonesia 14% 14% 20% 15% Laos 0% 0% 0% 0% Malaysia 4% 4% 9% 5% Thailand 18% 16% 14% 15% Philippines 14% 10% 6% 8% Singapore 26% 10% 14% 20% Brunei 0% Myanmar 0% 18

19 Table A-3: Primary Responsibility Primary Activity Services Accounting 0% 0% 0% 0% Architecture and Engineering Services 2% 4% 0% 5% Banking 6% 2% 2% 2% Consulting 4% 7% 2% 3% Education 4% 0% 2% 3% Healthcare 0% 4% 0% 0% HR Services 2% 2% 2% 0% Insurance Brokers 2% Legal 4% 7% 2% 5% Marketing & Communications Services 0% 0% 2% 3% Other Financial Services 0% 4% 2% 2% Software, IT, Telecommunications Services 4% 2% 5% 8% Transportation & Logistics 2% 7% 10% 5% Wholesale & Retail 6% 0% 10% 2% Business Process Outsourcing/ Shares 4% 7% 2% Services Other 4% 2% 2% 2% Total Services 34% 44% 48% 44% Manufacturing Consumer Goods 15% 16% 2% 16% Electronics 4% 2% 10% 5% Food & Food Products 4% 2% 2% 2% Oil & Petrochemical 4% 5% 2% 5% Pharmaceuticals/Medical 4% 0% 2% 6% Machinery & Equipment 2% 0% 2% 0% Other 11% 16% 17% 12% Total Manufacturing 44% 41% 37% 46% Other 24% 16% 12% 16% 19

20 APPENDIX B: Local Factors Impacting Business Table B-1: Satisfaction with factors Total Extremely Extremely Total Satisfied Neutral Dissatisfied Satisfied Satisfied Dissatisfied Dissatisfied Infrastructure 14% 2% 12% 28% 42% 15% 57% Availability of raw materials 22% 3% 19% 32% 19% 2% 20% Availability of low cost labor 55% 14% 42% 34% 8% 0% 8% Availability of trained personnel 34% 3% 31% 29% 32% 5% 37% Office lease costs 29% 0% 29% 34% 31% 0% 31% Housing costs 23% 0% 23% 40% 28% 5% 32% Laws & regulations 17% 2% 15% 25% 48% 11% 59% Corruption 5% 2% 3% 17% 34% 43% 77% Local protectionism 22% 2% 20% 39% 34% 2% 35% Tax structure 14% 2% 12% 48% 32% 6% 39% Personal security 72% 20% 52% 23% 5% 0% 5% Stable government and political system 62% 12% 49% 29% 9% 0% 9% New business incentives by 19% 3% 15% 40% 26% 2% 28% government Sentiment towards the U.S. 68% 15% 52% 31% 2% 0% 2% Free movement of goods within the 29% 5% 25% 31% 20% 2% 22% region Ease of moving products through customs 20% 2% 19% 25% 37% 6% 43% Table B-2: Satisfaction with local government institutions Total Satisfied Extremely Satisfied Satisfied Neutral Dissatisfied Extremely Dissatisfied Total Dissatisfied Agency to promote/develop investment 14% 0% 14% 54% 19% 2% 20% Customs 15% 0% 15% 34% 37% 6% 43% Immigration 29% 2% 28% 48% 12% 0% 12% Taxation/Revenue 17% 0% 17% 48% 29% 5% 34% Central Bank 22% 0% 22% 46% 8% 2% 9% Ministry of Finance 19% 0% 19% 59% 6% 0% 6% Percentages may not add to 100 because Not Applicable and Don t Know were possible responses. 20

21 APPENDIX C: Expansion in ASEAN over the Next Two Years Table C-1: Top 3 Reasons for ASEAN Expansion Year of Survey Reasons for Expansion Economic recovery 73% 65% 41% 50% 34% 0% Potential for business growth 73% 65% 91% 93% 83% 4% Increasing market share 47% 54% 41% 43% 46% 62% Reasonable production cost 27% 37% 30% 15% 54% 0% Diversity of customer base 37% 28% 33% 20% 17% 15% Lack of growth in current market/countries 13% 13% 16% 7% 3% 4% Availability of trained personnel/efficient manpower 13% 14% 5% 15% 6% 15% Availability of raw materials 2% 0% 9% 0% High level of personal security 2% 0% 0% 0% Low level of corruption 0% 2% 0% 0% Adequate laws and regulations to protect business 2% 0% 0% 0% Adequate laws and regulations to encourage foreign 0% 9% 7% 0% investment Stable government and political system 29% 27% 22% 9% 0% Low level of local protectionism 0% 4% 0% 0% Weak competition in market/countries 7% 15% 14% 0% Other 11% 0% 6% 0% Empty boxes indicate that no comparative data is available for those years. Data in 2012 was tabulated to add up to 100%. Table C-2: Top Reasons for ASEAN Importance over Next Two Years Year of Survey Reason Economic recovery 61% 59% 65% 72% 72% 2% Limited growth opportunities in other regions 48% 49% 48% 36% 52% 26% Improvement in Infrastructure 48% 35% 35% 41% 52% 0% Increased availability of trained personnel Favorable government policies Stable political conditions Change in business strategy Other 39% 23% 20% 26% 45% 20% 17% 42% 40% 21% 25% 32% 13% 28% 33% 38% 10% Empty boxes indicate that no comparative data is available for those years. 14% 4% 24% 4% 28% 26% 28% 28% 17% 12% 21