Singapore, Vietnam, Thailand, Malaysia and Indonesia have emerged as the most attractive destinations, even though the reasons vary by sector. With a relatively younger workforce, Vietnam has attracted strong interest from manufacturers, while Malaysia has remained a common choice for electrical and electronics manufacturing activities. Indonesia has also seen rising attention from businesses associated with natural resources and processing activities.
Even in Singapore, where GBA enterprises already have the largest footprint, respondents intend to commit an average of 23 percent in extra resources to accelerate their business development in the country, especially in areas, such as financing and establishing regional offices.
Chu said the trend should not be interpreted as a withdrawal from the mainland. “For many companies, the reason for doing so was to increase resilience by branching out rather than replacing existing operations,” he said. “They are not leaving China. They are spreading activity across more locations.”
Execution challenges remain
Despite the strong appetite for expansion, the research shows that execution remains demanding. The most frequently cited challenge is finding suitable local partners, followed by cultural and language differences and difficulties in securing specialist talent.
Chu said these issues often become clearer once companies move from planning to implementation. Chu said: “Entering a new market means adapting to a different business environment. Talent shortages are not limited to one region. They are a global issue.”
He said Hong Kong plays a role as middleman by helping companies manage these challenges through business matching and professional support. “Bringing companies together is only the first step. What matters is whether those links lead to real commercial outcomes. That depends on follow-through and access to professional services.”
Chu said Hong Kong’s function has changed over time. The city is no longer viewed solely as a trading hub for goods, but also as a base for financial, legal and logistics services that support companies as they expand overseas.
Chu said Hong Kong’s role has evolved over time, and China’s accession to the World Trade Organisation in 2001 is one of the milestones. While the city remains a hub for trade in goods, it also works as a “super connector” that brings together markets, capital and professional services. And Hong Kong also adds value through financial, legal and logistics support that helps companies turn cross-border contacts into workable commercial operations as they expand overseas.
Banks strengthen advisory capabilities to navigate ASEAN growth
UOB’s long-standing presence across ASEAN enables it to advise clients based on the nuances of each local market rather than treating the region as a single, uniform entity. Every market has its own currency, regulatory environment, business culture and expectations, and companies often express concerns about language barriers, compliance requirements, and access to talent. Local insights, she noted, are therefore essential in helping clients navigate these challenges effectively.
Many firms start by testing new markets through sales or procurement before committing capital. Zheng said this gradual approach requires support at different stages, from initial exploration to trade finance, working capital and, in some cases, acquisitions. “Banking support today goes far beyond account opening. Clients need help with liquidity management, currency exposure and cross-border funding.”
UOB’s foreign direct investment expertise also plays a role as companies deepen their foothold in ASEAN. Since 2011, the FDI Advisory Unit has helped nearly 5,000 companies invest in the region, including 2,400 Chinese enterprises—over 90% expanding into ASEAN. Drawing on its regional network and sector insights, the bank advises on investment approaches, helps clients assess regulatory considerations and support efficient capital deployment across borders. Since 2020, these efforts have facilitated more than HKD 190 billion in Chinese investment into Southeast Asia, creating over 140,000 jobs across ASEAN. “This strengthens Hong Kong’s connectivity with ASEAN by helping clients move forward with greater confidence as they pursue strategic opportunities,” she said.
Calculated risk
Geopolitical considerations form part of the decision-making process, but Zheng said they should be seen alongside other risks. “No market is risk-free,” she said. “Geopolitical tensions are one of several risk factors, including market, foreign exchange and partner risks.”
Rather than avoiding risk, companies are being encouraged to assess it carefully. Zheng emphasised that thorough due diligence is essential before entering any new market. “Firms need to understand different scenarios and determine whether they are resilient enough to withstand potential shifts in conditions,” she said.
UOB works closely with clients alongside trade bodies to provide insights, market intelligence and business connections they need through their expansion journey across ASEAN. “Our role is to help clients build a clearer picture and navigate the complexities of each market,” Zheng added. “Expansion is a calculated move—and we are here to support them at every step.”
Demand for ESG-linked finance increases
The research shows rising interest in environmental, social and governance (ESG) investment. Almost all respondents said they planned to maintain or increase ESG spending over the next two years, with the average intended level of investment almost doubling from the previous year.
Zheng said demand for ESG-linked financing has broadened as supply chains place greater requirements on vendors. Organisations that already have sustainability plans in place, while others may face tighter cost constraints but still feel rising pressure from customers and business partners to align with evolving ESG standards.
This has led to increased interest in transition finance, where companies move step by step towards lower emissions rather than making an immediate shift. Zheng said not every business can become green overnight, and sustainability efforts must remain practical. Banks need a deep understanding of each client’s operations before structuring financing, as a standard loan may not suit every organisation. Financing solutions have to align with how a company actually runs, she explained.
Zheng added that Hong Kong’s ecosystem helps enable this process, supported by professional firms and industry bodies that offer ESG reporting, verification and advisory services. This, in turn, helps banks assess whether green loans meet recognised standards and gives greater confidence that sustainability efforts are credible and aligned with long-term goals.
Hong Kong remains a strategic hub for regional growth
Both agreed that Hong Kong continues to serve as a strategic hub for companies managing regional expansion. Many firms use the city as a sales centre, treasury hub or investment holding location, supported by its financial infrastructure and renminbi capabilities.
Zheng said this remains relevant even as other regional centres seek to attract investment. Hong Kong offers familiarity for firms from Mainland China and operates a system that many international companies already use, she said.
Looking ahead, Zheng emphasised that expansion into ASEAN should be treated as a long-term strategy rather than a short-term response to global uncertainty. Progress is driven by understanding risk, preparing thoroughly and making decisions that align with each organisation’s operations and goals.
“Companies that succeed are those willing to plan carefully, commit resources and stay focused on building something that endures,” she said.
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