With every opportunity, a challenge
Two key factors account for why APAC has become an increasingly appealing place for MNCs to execute business. First, APAC is one of the fastest-growing regions in the world, with a consumer base of over 4 billion people. Countries like China and India are home to rapidly expanding middle classes with strong purchasing power, which they’re investing in new products – creating significant demand. Second, manufacturing in regions such as Southeast Asia is often more cost-effective than in other markets, thanks to lower costs of labor and resources, as well as business-friendly tax structures.
But as a region composed of more than 50 distinct countries, APAC presents a considerable share of complications for MNCs looking to participate in the region’s economy. While often considered a single business region, APAC is not an economic block like the European Union. When MNCs consider executing business relations in APAC, this could mean Hong Kong, Thailand, Japan, or Malaysia – all different markets with individual regulatory regimes.
Companies may struggle to navigate cultural differences, currency fluctuations, operational challenges, supply chains and varied legal structures throughout this diverse region. Thus, while most countries in APAC welcome international investment, MNCs may benefit from expertise and financial cover to approach varying legal and business environments.
Tailored risk solutions for MNCs in APAC
To help MNCs set up successful operations in APAC, Allianz Trade takes a four-pronged approach:
- Create bespoke risk solutions: We provide a range of risk mitigation products covering delayed payments, political instability and trade disruptions for multinational operations. Our tailored solutions address local regulations, including tax and compliance requirements, with flexible policies. With our customized approach to risk assessment, we can support MNCs in making informed decisions when entering new markets, trading with unfamiliar countries, or partnering with new entities.
- Leverage global footprint: With teams on every continent and in over 50 countries, we offer our customers both a deep understanding of each local market, and a global vision of their risks and opportunities profile. We also benefit from the expertise of our partners, who play a vital role by helping onboard MNC business effectively.
- Offer multi-country insurance: We offer comprehensive multi-country insurance programs under a single umbrella framework, providing a cost-effective and simple solution. By combining local and global expertise, we create customized policies that consider regional trading patterns. For example, we developed a single program for a Chinese client operating in five European countries and eight Asian countries, covering both regional and global trade needs.
- Build long-term partnerships: We pride ourselves on our long-term customer relationships based on trust, which enable us to gain a deep understanding of their unique strategies and risk appetite. Our global team includes over 70 nationalities, providing onsite guidance in multiple languages, with a worldwide presence to meet our customers on the ground. As a result of this dedicated service that adapts to political, economic and market changes, many of our clients remain with us for decades.
Embracing change to drive growth
We recognize that the only constant in business is change – a sentiment that rings especially true today, given the ongoing uncertainty around US tariffs. APAC is no exception: depending on factors such as industries affected, responses from governments and the adaptability of regional businesses, new tariffs could have a variety of consequences. Typically, tariffs can lead to a short-term disruption in trade flows, as affected countries may seek alternative markets or adjust their supply chains. Around the world, the trade war threatens to raise production costs for companies, and brings an additional layer of uncertainty in a period of low growth, persistent inflation, and diminished consumer demand.
However, in the medium to long term the APAC has shown resilience and adaptability, which has enabled it to withstand trade barriers. This can be by enhancing intraregional trade agreements, diversifying its export markets, and technological investments. The region’s growth is thus likely to continue, albeit at a moderate pace as economies adjust to new trade conditions. In this context, protecting against uncertainty with trade credit insurance is more important than ever.
To keep our finger on the pulse of these changes, our teams are in continuous conversation with customers and business partners, complementing our database of 289 million companies’ data that is easily accessible to our clients. Our economists are also publishing updated research on macroeconomic trends, including the trade war, regularly. This enables us to respond quickly to market adjustments, industry trends, changing regulations, as well as ongoing political and cultural shifts.
Delivering risk-conscious solutions to MNCs
At Allianz Trade, we provide tailored risk solutions, extensive local and global expertise, and international support to empower motivated multinational businesses to thrive in the dynamic APAC landscape. Adding the expertise of our diverse teams concerning legal, cultural and economic nuances, we’re well-equipped to help MNCs unlock the growth potential of APAC markets for sustained success.
