Thailand remains a top destination in Southeast Asia for European companies looking to expand their operations and navigate ongoing global economic uncertainties, according to a recent survey by the EU-Asean Business Council (EU-ABC).
Asean has been identified as “the region offering the best economic opportunities for European businesses,” surpassing India and China for the third consecutive year in the EU-Asean Business Sentiment Survey released by the EU-ABC on Wednesday.
The survey highlighted that “European confidence in Asean has remained resilient amidst global trade uncertainties.” Many companies see the region as increasingly vital to their global revenues, with plans to expand in key Southeast Asian markets such as Vietnam, Indonesia, Malaysia, and Thailand, despite possible US tariffs of 19-20% in these countries.
Approximately 70% of survey respondents expect their trade and investments in Southeast Asia to grow over the next five years, with 56% identifying the region as offering the most significant economic opportunities within that timeframe.
On the subject of supply chain adjustment due to US tariffs, 13% of respondents are considering relocating their operations. The survey found Southeast Asia to be the top choice for relocation, followed by India, Europe, and China.
While optimism remains, concerns about global trade uncertainties are also rising, with fewer respondents anticipating increased trade and investment in the short term across the region.
There is also increasing frustration with the slow progress of ASEAN’s regional integration efforts and a perceived lack of engagement from European institutions.
Chris Humphrey, executive director of the EU-ABC, stated that while European companies remain committed to expanding within Asean, achieving the full potential of regional growth depends on faster efforts to reduce barriers and deepen integration.
“Asean is still seen as the most promising region for growth,” he noted. “However, European businesses express frustration over the sluggish pace of regional integration. Non-tariff measures, regulatory inconsistencies, and persistent bottlenecks continue to add costs and complexity, hindering the realization of Asean’s market potential.”
Humphrey emphasized that, without addressing these barriers, the region risks falling short of its goal to become a genuinely unified, single market.
Furthermore, nearly 80% of respondents believe European companies are at a disadvantage compared to competitors from Japan, China, Australia, New Zealand, and India, all of which benefit from region-to-region or bilateral free trade agreements (FTAs) with ASEAN.
He stressed that “the EU must intensify its engagement to remain competitive, with a region-to-region FTA now regarded as a strategic necessity.”
As global trade realignments persist, he added, Asean must accelerate integration, and Europe must prioritize engagement to secure its role in the region’s growth trajectory.