german business network (gbn) - ey 1 september 14, 2017 german business network (gbn) webcast –...

September 14, 2017

German Business Network (GBN)Webcast – ASEAN and Iran:Update on current developments

German Business Network (GBN)

GBN Webcast - ASEAN and Iran: Update on current developments (c) 2017 EYGM Ltd.

and

Thomas WirtzThomas 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.

Mun Wai CheongMun 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 2015.

Masoud MohammadpourMasoud 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.

Dirk NolteDirk is a Tax Senior Manager. He has significant experience in delivering cross-border 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 2016.

Tino BollerTino 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.

Your hosts today


Dirk EgbersPartnerGlobal Leader of the German Business Network (GBN)

Phone: +49 211 9352 18500Mobile: +49 160 939 18500Mail: [email protected]

Thomas WirtzExecutive DirectorEMEIA TAS Japan Inbound Leader & ASEAN key contact


Mun Wai CheongDirectorEMEIA Leader ASEAN Business Network & ASEAN key contact


Dirk NolteSenior ManagerInternational Tax Services

Phone: +49 30 25471 16718 Mobile: +49 160 939 16718Mail: [email protected]

Masoud MohammadpourPartnerTransaction Advisory Services

Mobile: +98 912 823 8074

Tino BollerPartnerInternational Tax Services


Agenda


I. Why rediscover ASEAN?Mun Wai Cheong

II. ASEAN’s investment landscapeThomas Wirtz

III. Iran at a glanceMasoud Mohammadpour

IV. Investing in IranTino Boller

V. About EY IranDirk Nolte

VI. Q & A/Wrap-Up

I. Why rediscover ASEAN?


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

The story you already know


Sizeable GDP► US$2.5t► GDP growth► 5.2% CAGR (2005–15)

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 (2005–14)

Stable deal activity► US$87b► Average annual deal value

(2011–16)

The NEW story you need to know1 – High investment interest


The percentage of companies expecting to increase trade and investment in ASEAN in the next five years

The NEW story you need to know1 – 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 (2016-20) in line with their population growth.

The NEW story you need to know 2 – Large infrastructure spend


xxx► xxx

The NEW story you need to know 2 – Large infrastructure spend – ASEAN’s key infrastructure projects


Investment considerations


3. Market or customers► Market growth rate and

competitive landscape► Proximity to customers

2. Regulatory and others► Potential hurdles relating to

obtaining the necessary licenses

► Current and anticipated government regulatory policy and potential complications

1. Market access – leveraging free trade agreements (FTA)Upfront strategic planning to qualify for FTA preferential access and drive profitability in target markets

7. Human resources► Availability of local workforce –

skills, experience and education

► Location attractiveness for expatriates

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

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

6. Tax incentives► Business model and legal

entity structure that fits the tax environment

► Appropriate incentives to complement the business model

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


II. ASEAN’s investment landscape


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


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%).

Source of ASEAN FDI inflow by economy, 2015

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 industry, 2015

Who are ASEAN’s key trading partners?


xxx► xxx

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.

ASEAN deal landscapeM&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.

ASEAN deal performance


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

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.

III. Iran at a glance


Iran at a glanceFundamentals


4th largestOil reserves in world

2nd LargestGas reserves in the world

18th largestEconomy in the world by purchasing power parity

Largest Car manufacturer in the Middle east

Iran’s vision

2020Constructive and integrative priorities

1. Development as the highest priority2. Maintenance of stability in the security zone3. Expansion and deepening of relations with a greater number

of countries and international organisations4. Avoiding disputes and crises unless they relate to vital

interest

14 & 770% PopulationBelow the age of 30 and literacy rate of 80%

14 Special economic zones and 7 industrial zones

► Privatisation of 20% of state-

owned enterprises (SOEs)

each year

► Reforms in the financial and

banking sectors

► Restructuring of Iran’s

indirect subsidy system

relating to key staples such

as petroleum products and

electricity.

► An efficient allocation and

management of oil revenues,

with the transfer of 30% to

38% of such income to the

National Development Fund

Strategic 5 year planIran at a glance

Iran at a glanceSix fundamental platforms are expected to drive growth


Abundant resources

10.6% of the world’s crude oil reserves (158bn barrels)

34 tr cubic m of gas reserves, 1st in zinc reserves and 9th in iron reserves

Strong Consumer

demand79m total population, 47% of the population is between 20 to 45 years of age

Access to 400-600mn consumers

Depth in financial services

480 listed securities on Tehran Stock Exchange 30 banks 28 insurance companies

Industrial infrastructure

7 free trade zones and 14 special economic zonesSelf sufficient industrial sector with road connectivity and established utilities

ModernisationMobile users comprise 85% of the population 47m internet users Government’s focus on privatisation

Robust infrastructure

10,407km of railway infrastructure and 198,866km of road infrastructure

40 airports

Iran at a glanceThere are a number of attractive verticals of opportunity


4 to 5 year growth outlook

Sect

or s

ize

(con

trib

utio

n to

GD

P 20

14)

Medium High0%

20%

Oil & gas

Restaurants and hotels

Manufacturing

Agriculture

Construction

Transport and communication

Power and utilities

Pharmaceuticals: 12.2%Automotive: 12.5%

Low growth attributable to concentration of domestic players

Mature sectors with a stable growth

Financial services

Retail and consumer products

Healthcare

IV. Investing in Iran


Investing in IranTop 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

Investing in IranRecent experiences


► Direct investments (equity transactions)PharmaceuticalHome applianceAutomotiveOil and gas

► BOT contractsAirports expansion

► Oil and Gas JVs11 local E&P companies approved by NIOC29 foreign companies approved by NIOC

► Sell side assistance► Forming JV with current representatives or distributors► Setting up companies

V. About EY Iran


About EY IranAt a glance


Operating since July 2017 Tax services

50 team membersEY PARS

INIRAN

Advisory services

Office opening on 11 October 2017 M&A services

VI.Q & A/Wrap-Up


Thank you!

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© 2017 EYGM LimitedAll 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.

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german business network (gbn) - ey 1 september 14, 2017 german business network (gbn) webcast –...

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