German Business Network (GBN)

Transcription

1 German Business Network (GBN) Webcast ASEAN and Iran: Update on current developments September 14, 2017 Page 1

2 German Business Network (GBN) and Mun Wai Cheong Mun Wai has 18 years experience in industry and consulting. He is experienced in helping European companies expand their business, reduce their risk and optimize their operations in the ASEAN region, and helping ASEAN companies enter the European market. He transferred from EY Singapore to EY Germany in Thomas Wirtz Thomas is a TAS Executive Director with 15 years of professional experience in Transaction Support working for EY in Germany, Australia, Kazakhstan and Indonesia. He has recently returned from Indonesia where he spent over seven years as a partner serving international and local clients in various industries. Masoud Mohammadpour Masoud is a Partner leading the Transaction Support team in EY Iran, with more than sixteen years of experience. Prior to joining EY, Masoud worked for Tadvin, for BNP Paribas Bank in London as Internal Audit Manager, and for Smith and Williamson as an auditor. He has been providing advisory services to more than 50 companies in Iran. Tino Boller Tino is a Tax Partner with more than sixteen years of experience in providing German and foreign companies regarding national and international income tax regulations. His client base is mainly German middle market, British and Dutch. From 2010 until 2012, Tino has worked as a Partner at our German Tax Desk in London. Dirk Nolte Dirk is a Tax Senior Manager. He has significant experience in delivering crossborder tax work to a wide range of multi-national clients, including tax planning and tax optimization, strategic tax advice, cross border funding, Transfer Pricing, tax audit/tax litigation and corporate restructuring and was the leader of the German Tax Desk team in London while on assignment from 2014 to Page 2

3 Your hosts today Dirk Egbers Partner Global Leader of the German Business Network (GBN) Phone: Mobile: Mail: Mun Wai Cheong Director EMEIA Leader ASEAN Business Network & ASEAN key contact Phone: Mobile: Mail: Thomas Wirtz Executive Director EMEIA TAS Japan Inbound Leader & ASEAN key contact Phone: Mobile: Mail: Masoud Mohammadpour Partner Transaction Advisory Services Mobile: Tino Boller Partner International Tax Services Phone: Mobile: Mail: Dirk Nolte Senior Manager International Tax Services Phone: Mobile: Mail: Page 3

4 Agenda I. II. III. IV. V. VI. Why rediscover ASEAN? Mun Wai Cheong ASEAN s investment landscape Thomas Wirtz Iran at a glance Masoud Mohammadpour Investing in Iran Tino Boller About EY Iran Dirk Nolte Q & A/Wrap-Up Page 4

5 I. Why rediscover ASEAN? Page 5

6 Why rediscover ASEAN? Buoyant growth dynamics, economies and demographics Burgeoning middle-class consumers base Attractive tax incentives to set up business or regional hub Significant investment on infrastructure physical and digital Rising foreign direct investment (FDI) interest from global and regional investors Page 6

7 The story you already know Sizeable GDP US$2.5t GDP growth 5.2% CAGR ( ) Large demographics 630m World s fourth most populous bloc Robust trade US$2.3t Total ASEAN trade (2015) Steady FDI inflow US$121b FDI inflow into ASEAN (2015) Significant banking assets US$1.9t 7.2% CAGR ( ) Stable deal activity US$87b Average annual deal value ( ) Page 7

8 The NEW story you need to know 1 High investment interest The percentage of companies expecting to increase trade and investment in ASEAN in the next five years Page 8

9 The NEW story you need to know 1 High investment interest Which ASEAN economies are on faster growth track? From 2016 to 2021, ASEAN s emerging markets, i.e. Cambodia, Lao People s Democratic Republic (Lao PDR), and Myanmar are expected to grow above 7%. Indonesia, Malaysia, Philippines and Vietnam are projected to generate steady growth of 5% to 6% CAGR ( ) in line with their population growth. Page 9

10 The NEW story you need to know 2 Large infrastructure spend xxx xxx Page 10

11 The NEW story you need to know 2 Large infrastructure spend ASEAN s key infrastructure projects Page 11

12 Investment considerations 1. Market access leveraging free trade agreements (FTA) Upfront strategic planning to qualify for FTA preferential access and drive profitability in target markets 2. Regulatory and others Potential hurdles relating to obtaining the necessary licenses Current and anticipated government regulatory policy and potential complications 4. Infrastructure and production Direct labour, specialist and management costs associated with the production facility Costs and availability of logistics and infrastructure Costs and returns of investment in land or buildings 6. Tax incentives Business model and legal entity structure that fits the tax environment Appropriate incentives to complement the business model 7. Human resources Availability of local workforce skills, experience and education Location attractiveness for expatriates 3. Market or customers Market growth rate and competitive landscape Proximity to customers 5. Suppliers Existing supplier base and capability of localizing components 8. Business models Potential manufacturing and distribution business models, transactional designs and legal entity structures Page 12

13 Asia Pacific Location Assessment (specific to client current environment, industry and strategy) Page 13

14 II. ASEAN s investment landscape Page 14

15 How is ASEAN FDI performance? Double-digit FDI growth in recent decade Page 15

16 How is ASEAN FDI performance? Double-digit FDI growth in recent decade EU is the top contributor of ASEAN FDI (17%), followed by Japan (14%), US (11%), and China (7%). Nearly two-thirds of ASEAN s FDI inflow was in the services sector, predominantly in the financial and insurance segments (33%). Source of ASEAN FDI inflow by economy, 2015 Source of ASEAN FDI inflow by industry, 2015 Page 16

17 Who are ASEAN s key trading partners? xxx xxx Page 17

18 Who is driving ASEAN deal flows? International acquirers comprised one-third of ASEAN deal flows; key investor interest emanated from US, UK, and Netherlands, most significantly in the consumer (US$12.8b) and energy (US$9.5b) sectors. Page 18

19 ASEAN deal landscape M&A activities in ASEAN are diverse and buoyant Over the last six years, from 2010 to 2016, ASEAN deal activities were generally diverse across a wide spectrum of sectors. Key themes driving ASEAN s deals landscape include consumer-led and regionalization. Consumer-led With ASEAN s generally young demographics (about half of ASEAN population is below 30 years of age), it is not surprising that the key deal segments were consumer-driven sectors, including consumer, energy, financial services, and real estate. Regionalization Across the 10 ASEAN countries, an estimated US$581b of deals were recorded, of which over half (68%) are regional deals either intra-asean or inter-asia-pacific region, reflecting dynamic regional activities. Further analyses of deals reveal that the average deal size for the top five sectors was estimated at US$343m per deal. Page 19

20 ASEAN deal performance European investment (including UK, Netherlands, and France) into ASEAN is significant at US$26b. Page 20

21 Regional dynamos are active in ASEAN dealscape Over the last six years, Japanese firms have completed 162 deals at US$32b in ASEAN. The bulk of the Japanese deals are in the financial services sector. China is the second-most active acquirer in ASEAN with 129 deals at US$29b. Page 21

22 III. Iran at a glance Page 22

23 Iran at a glance Fundamentals Iran at a glance Strategic 5 year plan Privatisation of 20% of stateowned enterprises (SOEs) each year Reforms in the financial and 4 th largest Oil reserves in world 2 nd Largest Gas reserves in the world 18 th largest Economy in the world by purchasing power parity banking sectors Restructuring of Iran s indirect subsidy system relating to key staples such as petroleum products and electricity. 70% Population Below the age of 30 and literacy rate of 80% 14 & 7 14 Special economic zones and 7 industrial zones Largest Car manufacturer in the Middle east An efficient allocation and management of oil revenues, with the transfer of 30% to Iran s vision 2020 Constructive and integrative priorities 1. Development as the highest priority 2. Maintenance of stability in the security zone 3. Expansion and deepening of relations with a greater number of countries and international organisations 4. Avoiding disputes and crises unless they relate to vital interest 38% of such income to the National Development Fund Page 23

24 Iran at a glance Six fundamental platforms are expected to drive growth Abundant resources Strong Consumer demand Robust infrastructure Depth in financial services Industrial infrastructure Modernisation 10.6% of the world s crude oil reserves (158bn barrels) 34 tr cubic m of gas reserves, 1 st in zinc reserves and 9 th in iron reserves 79m total population, 47% of the population is between 20 to 45 years of age Access to mn consumers 10,407km of railway infrastructure and 198,866km of road infrastructure 40 airports 480 listed securities on Tehran Stock Exchange 30 banks 28 insurance companies 7 free trade zones and 14 special economic zones Self sufficient industrial sector with road connectivity and established utilities Mobile users comprise 85% of the population 47m internet users Government s focus on privatisation Page 24

25 Iran at a glance There are a number of attractive verticals of opportunity 20% Low growth attributable to concentration of domestic players Sector size (contribution to GDP 2014) Mature sectors with a stable growth Oil & gas Agriculture Retail and consumer products Power and utilities Restaurants and hotels Transport and communication Pharmaceuticals: 12.2% Automotive: 12.5% Manufacturing Financial services Construction 0% Medium 4 to 5 year growth outlook Healthcare High Page 25

26 IV. Investing in Iran Page 26

27 Investing in Iran Top 9 priorities Understanding market and sector Regulatory environment Banking and finance Customs and duties Local Taxation Social security and labor law Iran GAAP und IFRS M&A Safeguarding investments Page 27

28 Investing in Iran Recent experiences Direct investments (equity transactions) Pharmaceutical Home appliance Automotive Oil and gas BOT contracts Airports expansion Oil and Gas JVs 11 local E&P companies approved by NIOC 29 foreign companies approved by NIOC Sell side assistance Forming JV with current representatives or distributors Setting up companies Page 28

29 V. About EY Iran Page 29

30 About EY Iran At a glance Operating since July 2017 Tax services 50 team members EY PARS IN IRAN Advisory services Office opening on 11 October 2017 M&A services Page 30

31 VI.Q & A/Wrap-Up Page 31

32 Page 32 Thank you!

33 EY Assurance Tax Transactions Advisory About the global EY organization The global EY organization is a leader in assurance, tax, transaction and advisory services. We leverage our experience, knowledge and services to help build trust and confidence in the capital markets and in economies the world over. We are ideally equipped for this task with well trained employees, strong teams, excellent services and outstanding client relations. Our global purpose is to drive progress and make a difference by building a better working world for our people, for our clients and for our communities. The global EY organization refers to all member firms of Ernst & Young Global Limited (EYG). Each EYG member firm is a separate legal entity and has no liability for another such entity s acts or omissions. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information, please visit EYGM Limited All Rights Reserved. ED None This material has been prepared for general information purposes only and is not intended to be relied upon as accounting, tax, or other professional advice. Please refer to your advisors for specific advice. Page 33