Global supply risks

Keeping Up with Government Incentives & Policies that Impact Global Business Services

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Government policies, laws and incentives can have a significant impact on business. They not only affect a company’s bottom line in terms of taxes and other costs, but can also impact availability of talent, data security, IP protection and overall ease of doing business.

Are you carefully monitoring changes in policies and new incentive programs in your global locations? Take a look at these five APAC countries and some of their latest policies and incentive programs.

China

To deal with a slump in economic growth, China’s cabinet unveiled new measures to boost employment, offering more flexible tax breaks to companies to hire the jobless, preferential loans and incentives for farmers and new graduates. The government stated that companies are likely to get tax breaks for employing people who have been out of work for more than six months, rather than more than one year as was previously the case. More preferential loans will be given to people who want to set up their own businesses and the process will be simplified, while banks will be encouraged to lend to small firms. Companies will get priority in bids for large-scale projects if they create lots of jobs.

Vietnam

Vietnam has eased visa and work permits needed for foreigners. Vietnamese officials have introduced measures to simplify administrative procedures involving foreign workers in the country, including relaxing work permit and visa requirements for them. They are also considering two proposals especially for workers from Southeast Asia, either removing work permit requirements or keeping them to a minimum. With the relaxed visa norms, MNCs situated in Vietnam will find it easier to bring in expats.

India

In a move to encourage development in rural cities of India, the government launched the India BPO Promotion Scheme (IBPS), which promotes BPO/ITeS operations across the country. Top BPO firms in the country welcome the program since it provides helpful incentives, such as a roughly US$1500 government subsidy per seat, to set up operations in Tier 3 and 4 locations. As many as 78 companies have expressed interest in setting up their BPO operations in the specified 190 locations totaling 125,000 seats. The IBPS is just one example of the Indian government efforts to stimulate the economy; others include the ‘Make in India’ scheme and the ‘Digital India‘ program.

Dubai

Dubai announced to spend US$600M on technology-specific education for students in the city by 2016. By introducing technology related skills development in schools, including whiteboards, interactive displays and projectors, video collaboration, and distance learning, the government aims to improve the quality of its entry-level workforce, which will in turn improve Dubai’s attractiveness as a more favorable destination for doing business.

Indonesia

After several international investment disputes were brought to the arbitration courts, the Indonesian government announced that they will begin easing the requirements faced by foreign investors. Also, several existing investment agreements with a number of countries will soon be revised, bringing more certainty not only to foreign companies doing business in Indonesia but also to the government. With the revision of the investment treaties, foreign investors would be better protected and would receive fair treatment.

Though the primary drivers of these promotive measures are to increase employment or economic performance in the respective countries, they also come with many treats for the companies who are willing to invest in there as well.  To effectively leverage these opportunities, companies should get in touch with the respective authorities, get more information on the benefits and weigh the opportunities to their advantage. Maintaining cordial relationships for the government and monitoring the progress of any development plans will also go a long way in leveraging the aids and profits arising out of policy relaxations or special grants.

Proactive monitoring of your global locations on an ongoing basis is critical to ensure that you’re not missing out on benefits and opportunities.