ASEAN recorded a robust rebound in Foreign Direct Investment (FDI) inflows, surging by 42 percent to reach US$ 174 billion in 2021. This increase to near pre-pandemic levels reverses the decline in 2020 caused by the COVID-19 outbreak and reflects the attractiveness of the region’s economy for global investors. With a large market and strong regional integration, ASEAN remains a major FDI destination in the developing world – second only to China – and will play an important role in driving global economic recovery.

Intra-ASEAN FDI, which continue to be an important source of FDI as well as the establishment of production networks in the region, have been increasingly driven by emerging opportunities in sectors such as electric vehicles, electronics, digital economy and green technologies. Startups – in particular the unicorns – have been critical in driving these new trends and contributing to the Industry 4.0 transformation in ASEAN. At the same time, private equity and venture capital firms have been playing an increasingly active role to support the growth of start-ups, with total assets under management rising rapidly from US$36 billion in 2017 to US$66 billion in 2021.

This year’s ASEAN Investment Report focuses on investment facilitation. Over the past few years, ASEAN Member States have undertaken significant efforts to attract and retain FDI.

They are now stepping up this endeavour through the adoption of an ASEAN Investment Facilitation Framework (AIFF) in 2021, reflecting ASEAN’s continued commitment to improve ease of doing business and investment in the region. This Report highlights many of ASEAN’s investment facilitation initiatives at the national and regional levels and provides insights for foreign investors on how these initiatives could assist them in their investment decisions. The Report also highlights the initial assessment of the implementation of the AIFF.

As we continue to be confronted by global economic uncertainties, brought about by factors such as the evolving pandemic, supply chain disruptions, inflationary pressures and geo-political conflicts, it is more important than ever that ASEAN remains steadfast in its economic integration and create a conducive climate for business and investment. I hope that policymakers, businesses and stakeholders in the region will find this Report useful in informing their decisions to realise an ASEAN Community that is stable, prosperous, and more resilient.