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

CAMBODIA REPORT Compiled by: The American Chamber of Commerce (AmCham) in Singapore 1 Scotts Road #23-03/04/05 Shaw Centre Singapore 228208 AND The United States Chamber of Commerce 1615 H St NW Washington DC 20062-2000

Copyright Standards This document contains proprietary research, copyrighted materials, and literary property of the American Chamber of Commerce in Singapore, the U.S. Chamber of Commerce, and the American Cambodian Business Council. 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, and the American Cambodian Business Council. This document is of great value to the American Chamber of Commerce in Singapore, the U.S. Chamber of Commerce, and the American Cambodian Business Council. 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, and the American Cambodian Business Council. 2

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 14 3. Factors Impacting Business in Cambodia 15 Local Business Environment Factors 15 Major Strengths 15 Major Concerns 15 Other Local Business Environment Factors 16 International Schools 16 4. 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

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. 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 CAMBODIA. Survey Methodology Table 1.1 Survey Scope: Sample Size: Senior Executives of U.S. Companies based in Cambodia A list of 66 AmCham members with e-mail contacts was provided by the American Cambodia Business Council Response rate was about 24% (16) 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 from each U.S. company were asked to complete the survey. Sample Profile (See Appendix A) Most respondents (81%) are responsible for only Cambodia. The percentage of respondent member companies in the services sector and manufacturing sector are 56% and 19%, respectively. 19% of respondents had fewer than 50 employees in the regions, and 56% have a workforce between 50 and 500 employees in the region. The largest portion of respondents (50%) had a turnover of between $1 million and $50 million in Cambodia in 2011. Turnover in Cambodia accounted for less than 5% of global turnover for 38% of respondents. 38% of respondents reported that turnover in Cambodia accounts for all of their global turnover. Other ASEAN countries with significant turnover for respondents in Cambodia are Thailand and Vietnam (both 13%). 4

BRIEF OUTLINE OF RESULTS BUSINESS OUTLOOK Figure 2: Economic Outlook for Investment Opportunities in ASEAN ASEAN Economic Outlook: All 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 decreased from 28% in 2011 to 13% in 2012. The majority of respondents (73%) do not face higher costs of borrowing in 2012. Importance of ASEAN Markets in Global Business: 69% of respondents report that ASEAN markets have increased in importance to their companies in the past two years. Most respondents (75%) expect ASEAN importance to increase in the next two years. Business Direction and Movement in ASEAN: 75% of respondents plan to expand their companies in ASEAN Profit Outlook: 88% expect a profit increase in 2012. 88% expect a profit increase in 2013. Figure 3: Location of Expansion in ASEAN Workforce Expansion: 69% expect a workforce increase in 2012. 27% expect an increase of 5 to 10%. 27% expect an increase of 15 to 20%. Figure 1: Profit Outlook for 2013 Major Strengths (% Satisfied) Stable government and political system (75%) Sentiment towards the U.S. (75%) Major Concerns (% Dissatisfied) Corruption (81%) Availability of trained personnel/efficient manpower (50%) Availability of low cost labor (69%) Laws and Regulations (44%) Personal security (56%) Infrastructure (44%) Office lease costs (56%) Free movement of goods within the region (56%) 5

2.1 Current Business Climate 2. BUSINESS OUTLOOK Table 2.1 Financing Constraints and Costs of Borrowing 2010 2011 2012 Is your company facing significant financing constraints? Yes 41% 28% 13% No 59% 72% 87% Is your company facing higher costs of borrowing? Yes 18% 33% 27% No 82% 67% 73% A small portion of respondents (13%) reported facing significant financing constraints, a significant decrease from 2011 s figure of 28%, and even more so from 2010 s figure of 41%. This indicates improving economic conditions in Cambodia. Fewer respondents in 2012 face higher costs of borrowing than in 2011. In 2012, 27% of respondents face higher costs of borrowing compared with 33% in 2011. 2.2 Importance of ASEAN Markets in Global Business Table 2.2.1 Importance of ASEAN over Past Two Years 2010 2011 2012 Have ASEAN markets become more important or less important, in terms of worldwide revenue, to your company in the past two years? More Important 53% 67% 68% Remained the Same 40% 27% 24% Less Important 0% 0% 8% Most respondents (68%) stated that ASEAN markets have become more important to their company in the last two years in terms of worldwide revenue, similar to last year s figure of 67%. 8% of respondents believe that ASEAN markets have become less important in the last two years, an increase from both 2011 and 2010 during which no respondents believed that ASEAN markets became less important. Table 2.2.2 Importance of ASEAN over Next Two Years 2010 2011 2012 Does your company feel 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 76% 78% 75% Remain the Same 18% 17% 19% Less Important 0% 0% 6% Outlook towards ASEAN in the next two years in 2012 remains consistent with the last two years. Most respondents (75%) predict that ASEAN markets will be more important for their company s worldwide revenues in the next two years. 6% of respondents believe that ASEAN markets will be less important in the next two years, an increase from 2011 and 2010 during which no respondent s believed that ASEAN markets would become less important in the next two years. 6

Table 2.2.3 Reasons why ASEAN markets will be more important in worldwide operations and revenues in the next two years 2010 2011 2012 Economic Recovery 85% 77% 0% Improvement in Infrastructure 77% 62% 0% Increased Availability of Trained Personnel 31% 31% 8% Favorable Government Policies 46% 38% 0% Limited Growth Opportunities in Other Regions 31% 46% 8% Stable Political Conditions 15% 23% 50% Change in Business Strategy 15% 15% 33% Other 8% 8% 0% *Respondents were allowed to select 3 reasons but, in 2012, data was tabulated to add up to 100%. Stable political conditions replaced economic recovery as the top reason why ASEAN markets will be more important in worldwide operations and revenues in the next two years. Change in business strategy was the second most important factor behind ASEAN s growing importance to companies based in the region. 7

2.3 Trade and Investment in ASEAN Figure 2.3.1 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? Positive, 19% Very Positive, 81% Figure 2.3.2 Trade and investment in ASEAN over the past two years Level of trade and investment in the ASEAN region over the past two years has: Remained the Same, 6% Increased, 50% Increased Significantly, 44% All respondents in Cambodia (100%) have a positive or very positive outlook on the ASEAN region as an investment opportunity for their companies. Over the past two years, 94% of respondents indicated that their company has increased or significantly increased their level of trade and investment in the ASEAN region. 8

Figure 2.3.3 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, 6% Increase, 31% Increase Significantly, 63% Table 2.3.1 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% 41-100% Average Percentage Respondents 7% 13% 33% 47% 42% TOP THREE REASONS WHY YOUR COMPANY S TRADE AND INVESTMENT WILL INCREASE IN THE ASEAN REGION: Diversification of Customer Base (27%) Stable Government and Political System (20%) Increasing Market Share (13%) Weak Competition in the Market/Countries (13%) The vast majority of respondents in Cambodia (94%) expect trade and investment in the ASEAN region to increase or increase significantly over the next 5 years. 47% of respondents predicted the growth of trade and investment in ASEAN to be about 41-100% over the next 5 years. The average expected growth is 42%. Respondents cited diversification of their customer base as the top reason for increasing trade and investment in ASEAN receiving 27% of responses. 9

2.4 Business Direction and Movement in ASEAN Table 2.4.1 Expansion in Cambodia 2012 In Cambodia, does your company plan to expand or contract? Expand Significantly 31% Expand 44% Remain the Same 25% Contract 0% Contract Significantly 0% Table 2.4.2 Reasons for expansion in Cambodia Reasons why companies plan for business expansion in Cambodia Increasing Market Share 50% Diversification of Customer Base 50% The large majority of respondents (75%) indicated that their companies plan to expand in Cambodia. No respondents expect to contract. Increases in market share and the diversification of customer base are the top reasons for expansion in Cambodia. Table 2.4.3 Location of ASEAN Expansion 2010 2011 2012 Into which specific ASEAN country or countries does your company plan to expand? Brunei 0% 0% 0% Cambodia 33% 23% 27% Indonesia 0% 15% 0% Laos 33% 23% 13% Malaysia 0% 0% 0% Myanmar 25% 8% 33% Philippines 0% 0% 0% Singapore 8% 8% 0% Thailand 0% 31% 0% Vietnam 0% 0% 27% Myanmar is the most popular country for expansion in 2012, growing as an investment destination from 8% of respondents in 2011 to 33% this year. Cambodia and Vietnam are tied as the second most commonly cited countries for ASEAN expansion at 27%. This is a slight increase for Laos (23% in 2011) and a large increase for Vietnam (27% in 2012 and no respondents in 2011). Indonesia was not a popular choice for expansion, after being cited as the top expansion destination by 15% of the respondents in 2011. 10

Table 2.4.4 Diversification from China into ASEAN 2011 2012 Does your company plan to diversify some investments or business from China into ASEAN over the next two years? Yes 6% 13% No 44% 63% Not Sure 50% 25% Although still a small portion, 13% of respondents plan to diversify some investments away from China and into ASEAN in 2012, a significant increase from the 6% who planned to do so in 2011. 2.5 ASEAN Integration Table 2.5.1 Importance of ASEAN Integration 2010 2011 2012 Is ASEAN integration important to helping your company do business in the region? Yes 86% 74% 75% No 14% 24% 6% Not Sure The option not sure was offered for the first time in 2012. 19% ASEAN integration remains to be important to respondents in Cambodia, with 75% of respondents believing it important to helping their companies do business. Proportionally, in 2012, 12:1 respondents believe that ASEAN integration is important to helping their companies do business in the region. In 2011, the ration was only 3:1. Table 2.5.2 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 38% No 44% Not Sure 19% The majority of respondents (63%) do not have, or are not sure if they have, an ASEAN regional strategy based on these goals. This is a trend that is seen across the entire ASEAN region. 11

2.6 ASEAN Free Trade Agreements Figure 2.6.1 Utilizing FTA s 90% 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? 31% 31% Australia and New Zealand 31% 50% 13% 63% 38% 31% 25% 44% China India Japan Korea Yes No Figure 2.6.2 Importance of ASEAN FTA s 120% How important is the agreement with each specified country to your company s investment plans in ASEAN? 100% 80% 60% 40% 20% 0% 25% 75% 40% 20% 20% 20% 100% 80% 20% 67% 33% Extremely Important Important Neutral Not Important Australia and New Zealand China India Japan Korea The ASEAN Free Trade Agreement with Japan can be utilized by the most respondents in Cambodia (38%), and it is considered to be extremely important by 80% of those who can utilize it. The FTA with India proved to be the most important for the small minority (13%) who could utilize it, with all respondents considering it extremely important to their investment plans. 12

2.7 Profit Outlook Compared to the past year, do you expect your profits in ASEAN in the current and coming years to increase, decrease, or remain the same? Figure 2.7 Profit Outlook Year of Survey 2010 2011 2012 Current Increase 67% 81% 88% Year Remain 27% 12% 13% Profit Expectation Coming Year Decrease 7% 6% 0% Increase 100 % 94% 88% Remain 0% 0% 13% Decrease 0% 6% 0% Profit outlook remains positive, with the vast majority of respondents (88%) expecting profits to increase for both the current year and coming year. Expectations for the current year were slightly lower in the 2011 survey, in which 81% of respondents expected that profits would increase. However, in the 2011 survey, 94% of respondents predicted that profits would increase the coming year, compared to 88% of respondents who expect this in the 2012 survey. 2.8 Workforce Expansion Table 2.8.1 Workforce Expansion in 2012 Do you expect your company s total number of employees to increase, decrease, or remain the same in 2012? Year 2010 2011 2012 Increase 65% 72% 69% Same 35% 22% 31% Decrease 0% 6% 0% Table 2.8.2 Percentage of Employee Increase Year of Survey 2010 2011 2012 Workplace 0 to less than 5% 8% 18% 45% Expansion 5 to less than 10% 8% 27% 10 to less than 15% 31% 9% 45% 15 to less than 20% 8% 27% 20 to less than 50% 0% 15% 9% >50% 0% 31% 9% For the first time in 2011, 0-10% was further split into 0-5% and 5-10%, and 10-20% was split into 10-15% and 15-20%. Most respondents (69%) expect the number of employees to increase. Out of these respondents, 27% expect an increase of 5% to 10%, and another 27% expect an increase of more than 15% to 20%. These increases are smaller than those expect in 2011. There were no respondents who expect to decrease their workforce in 2012. 13

2.9 Expatriate Satisfaction Table 2.9 Expatriate Satisfaction Year of Survey 2010 2011 2012 Does your company regularly receive requests from employees based in other locations to work in Cambodia? Yes 24% 35% 38% No 76% 65% 63% Are your expatriate employees generally satisfied with their assignments in Cambodia? Yes 85% 88% 93% No 15% 12% 7% Do your expatriate employees attempt to extend their time in Cambodia? Yes 87% 59% 73% No 13% 41% 27% Overall expatriate employee satisfaction remains high at 93%, a slight increase from 88% satisfaction in 2011. About a third of respondents stated that their company regularly receives requests from employees in other locations to work in Cambodia (38%), which is consistent with 2011 data. 73% of respondents indicated that expatriate employees sought to extend their time in Cambodia in 2012, a significant increase from the 59% who responded in 2011. 14

3. FACTORS IMPACTING BUSINESS IN CAMBODIA 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 in the 2012 survey) Table 3.1.1: Time Comparison of satisfaction with major strengths Factors 2010 2011 2012 Stable government and political system 72% 75% Sentiment towards the U.S. 76% 61% 75% Personal security 65% 56% Availability of low cost labor 68% 84% 69% Office Lease Costs 56% Free movement of goods within the region 56% (See Appendix B, Table B -1 for responses on all listed factors). *Empty boxes indicate areas that were not strengths for the year indicated. Responses bolded represent that year s response with the highest rate of satisfaction. Stable government and political system and sentiment towards the U.S. tied for top strength in Cambodia at 75% each. Rates of satisfaction increased for both in 2012 compared to 2011. Availability of low cost labor is still a major strength for Cambodia (69%), although its satisfaction rating decreased significantly from 2011 (84%). In 2011, it was the top strength for Cambodia. Free movement of goods within the region and office lease costs became new major strengths in 2012, both receiving satisfaction ratings of 56%. Major Concerns (Responded Dissatisfied or Extremely Dissatisfied at a considerable rate) Table 3.1.2: Time Comparison of dissatisfaction with major concerns Factors 2010 2011 2012 Corruption 64% 88% 81% Availability of trained personnel 53% 61% 50% Laws and regulations 61% 44% Infrastructure 41% 50% 44% (See Appendix B, Table B-1 for responses on all listed factors). *Empty boxes indicate areas that were not concerns for the year indicated. Responses bolded represent that year s response with the highest rate of dissatisfaction. Cambodia did not gain or lose any major concerns in 2012. Corruption remains a top concern, although the dissatisfaction rate has decreased slightly from 88% in 2011 to 81% in 2012. Dissatisfaction in all major areas of conern have decreased in 2012. The largest decrease was for laws and regulations, which fell from 61% in 2011 to 44% in 2012. 15

3.2 Other Local Business Environment Factors Local Government Institutions Regarding local government institutions, respondents are most satisfied with immigration (50% satisfaction rate). Taxation/Revenue received the highest dissatisfaction rating (50%). See Appendix B, Table B-2 for more details. Importing Goods Table 3.2 Importing Goods into Cambodia Is importing goods into Cambodia a significant problem for your company? Yes 31% No 69% 3.3 International Schools Table 3.3: International schools 2010 2011 2012 Will the ability to find adequate space at international educational institutions in Cambodia be a significant problem in the next 1-3 years? Yes 17% 33% 25% No 83% 67% 50% Do you feel that the government of Cambodia is actively pursuing solutions to correct the space constraint at international educational institutions? Yes 0% 0% 0 No 100% 100% 100% Will the lack of adequate space at international educational institutions in Cambodia affect your company s decision to hire more local employees over foreign employees? Yes 100% 33% 50% No 0% 67% 25% *The option Not Sure was given for the first time in 2012. Half of the respondents do not believe that the ability to find adequate space at international educational institutions in Cambodia will be a significant problem in the next 1-3 years. This is a decrease from 67% in 2011. However, due to the addition of the not sure option in 2012, data from this year cannot be directly compared to data from previous years. Still, it can be concluded that space at international schools is not an overwhelming problem in Cambodia. Consistent with data from 2010 and 2011, all of respondents in Cambodia do not feel that the government in Cambodia is actively pursuing solutions to correct the space constraint at international educational institutions. In 2012, half of the respondents in Cambodia reported that the lack of adequate space at international educational institutions will affect their decision to hire more local employees over foreign employees. There have been no evident trends in responses to this question. 16

Very positive outlook, strong expansion 4. CONCLUSION All of the respondents in Cambodia have a positive or very positive outlook for the ASEAN region as an investment opportunity for their companies. Only 13% are facing significant financing constraints in 2012, a significant decrease from 28% in 2011. In addition, 73% of respondents reported that they are not facing higher costs of borrowing in 2012, up from 67% in 2011. 69% of respondents in Cambodia reported that ASEAN markets have increased in importance to their companies over the past two years, and 75% reported that ASEAN markets will continue to increase over the next two years. These good conditions have promoted expansion in Cambodia, 75% of respondents reported expectations to expand. The main reasons for this expansion are to increase market share and diversify customer base. Respondents in Cambodia plan to expand in their own country as well as Myanmar, Vietnam, and Laos. Profit outlook is positive as well. 88% of respondents in Cambodia expect an increase in profits in 2012, and 88% expect profits to increase in 2013. In addition, 69% of respondents expect their companies workforces to increase. All of these factors show that U.S. companies are thriving in Cambodia. ASEAN remains to be important, yet integration policies are not utilized 75% of respondents in Cambodia reported that ASEAN integration is important to helping their companies do business in the region, yet the majority of respondents (63%) do not have, or are not sure if they have, an ASEAN regional strategy based on ASEAN integration goals. This data reveals that although ASEAN integration is important to U.S. companies in Cambodia, many are not making specific plans to utilize ASEAN integration policies. The ASEAN Free Trade Agreement with Japan can be utilized by the highest percentage of respondents in Cambodia (38%). The ASEAN FTA with India received the highest importance rating (100%), although only 13% of respondents could utilize it. In general, the ASEAN FTAs cannot be utilized by a majority of respondents. Good business climate 93% of respondents in Cambodia report that their expatriate employees are generally satisfied with their assignments. Space at international schools does not appear to be an overwhelming problem, with only 25% of respondents predicting that finding space at these schools will be a problem in the next 1-3 years. 100% of respondents reported that the government of Cambodia is not actively pursuing solutions to correct any space constraint issues that the international education institutions may have. Corruption continues to be the top concern for Cambodia, with 81% expressing dissatisfaction, although 75% of respondents expressed satisfaction with the government and political system. Sentiment towards the U.S. is a major strength for Cambodia as well, receiving a 75% satisfaction rating. 17

APPENDICES APPENDIX A: Sample Profile Table A-1: Workforce and Turnover Survey Year 2010 2011 2012 Scope of Responsibility Only one country 82% 78% 81% Multiple countries 18% 22% 19% Size of Current Workforce in Region Company s Past Year Turnover in Cambodia (USD) Below 50 employees 62% 33% 19% 50 to <500 employees 25% 44% 56% 500 to <1000 employees 6% 17% 6% 1000 to <1500 employees 0% 0% 13% 1500 to <2000 employees 0% 6% 0% 2000 employees or above 0% 0% 6% Below $1 million 31% 22% 19% $1 to <$50 million 62% 61% 50% $50 to <$100 million 0% 11% 19% $100 to <$500 million 6% 6% 13% $500 to <$1 billion 0% 0% 0% $1 billion or above 0% 0% 0% Past Year s Turnover As Percentage of Company s Global Turnover Below 5% 29% 39% 38% 5 to <25% 29% 6% 13% 25 to <50% 14% 6% 6% 50 to <75% 0% 0% 0% 75 to <100% 0% 0% 6% 100% 29% 50% 38% 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 2010 2011 2012 Below 5% 29% 28% 25% 5 to less than 25% 29% 6% 19% 25 to less than 50% 14% 6% 13% 50 to less than 75% 0% 11% 0% 75 to less than 100% 0% 11% 0% 100% 29% 39% 44% Vietnam 25% 20% 13% Cambodia 17% 13% 13% Indonesia 25% 0% 0% Laos 8% 13% 13% Malaysia 0% 0% 0% Thailand 8% 27% 13% Philippines 0% 0% 0% Singapore 17% 27% 6% Brunei 0% Myanmar 0% 18

Table A-3: Primary Responsibility Primary Activity 2010 2011 2012 Services Accounting 0% 0% 0% Architecture and Engineering Services 0% 0% 0% Banking 6% 6% 13% Consulting 12% 19% 6% Education 0% 0% 0% Healthcare 12% 6% 6% HR Services 6% 6% 0% Insurance Brokers 6% 0% 0% Legal 12% 0% 6% Marketing & Communications Services 6% 0% 0% Other Financial Services 6% 6% 0% Software, IT, Telecommunications Services 6% 0% 0% Transportation & Logistics 12% 0% 13% Wholesale & Retail 0% 6% 6% Business Process Outsourcing/ Shares 0% 6% 0% Services Other 0% 0% 6% Total Services 84% 55% 56% Manufacturing Consumer Goods 6% 0% 19% Electronics 0% 0% 0% Food & Food Products 0% 12% 0% Oil & Petrochemical 0% 6% 0% Pharmaceuticals/Medical 0% 0% 0% Machinery & Equipment 0% 6% 0% Other 0% 6% 0% Total Manufacturing 6% 30% 19% Other 12% 12% 25% 19

APPENDIX B: Local Factors Impacting Business Table B-1: Satisfaction with factors Total Extremely Extremely Total Satisfied Neutral Dissatisfied Satisfied Satisfied Dissatisfied Dissatisfied Infrastructure 31 0 31 25 31 13 44 Availability of raw materials 13 0 13 50 19 0 19 Availability of low cost labor 69 19 50 25 6 0 6 Availability of trained personnel 19 0 19 31 31 19 50 Office lease costs 56 13 44 31 13 0 13 Housing costs 44 6 38 31 19 0 19 Laws & regulations 25 0 25 31 25 19 44 Corruption 0 0 0 19 50 31 81 Local protectionism 31 6 25 38 6 6 13 Tax structure 31 0 31 50 13 6 19 Personal security 56 0 56 25 19 0 19 Stable government and political system 75 25 50 25 0 0 0 New business incentives by 25 0 25 63 6 6 13 government Sentiment towards the U.S. 75 19 56 13 0 0 0 Free movement of goods within the 56 6 50 38 6 0 6 region Ease of moving products through customs 25 6 19 31 19 19 38 Table B-2: Satisfaction with local government institutions Total Satisfied Extremely Satisfied Satisfied Neutral Dissatisfied Extremely Dissatisfied Total Dissatisfied Agency to promote/develop investment 19 0 19 25 19 6 25 Customs 19 0 19 25 31 13 44 Immigration 50 0 50 31 6 0 6 Taxation/Revenue 13 0 13 31 38 13 50 Central Bank 19 6 13 38 6 0 6 Ministry of Finance 19 0 19 38 25 6 31 Percentages may not add to 100 because Not Applicable and Don t Know were possible responses. 20

APPENDIX C: Expansion in ASEAN over the Next Two Years Table C-1: Top 3 Reasons for ASEAN Expansion Year of Survey 2010 2011 2012 Reasons for Expansion Economic recovery 64% 50% 0% Potential for business growth 100% 92% 0% Increasing market share 45% 42% 50% Reasonable production cost 9% 8% 0% Diversity of customer base 18% 25% 50% Lack of growth in current market/countries 9% 8% 0% Availability of trained personnel/efficient manpower 9% 25% 0% Availability of raw materials 0% 8% 0% High level of personal security 0% 0% 0% Low level of corruption 0% 0% 0% Adequate laws and regulations to protect business 9% 0% 0% Adequate laws and regulations to encourage foreign investment 18% 0% 0% Stable government and political system 55% 8% 0% Low level of local protectionism 18% 8% 0% Weak competition in market/countries 0% 17% 0% Other 0% 0% 0% Empty boxes indicate that no comparative data is available for those years. In 2012, data was tabulated to add up to 100%. Table C-2: Top Reasons for ASEAN Importance over Next Two Years Year of Survey 2010 2011 2012 Reason Economic recovery 85% 77% 0% Limited growth opportunities in other regions 31% 46% 8% Improvement in Infrastructure 77% 62% 0% Increased availability of trained personnel 31% 31% 8% Favorable government policies 46% 38% 0% Stable political conditions 15% 23% 50% Change in business strategy 15% 15% 33% Other 8% 8% 0% Empty boxes indicate that no comparative data is available for those years. In 2012, data was tabulated to add up to 100%. 21