Kuala Lumpur, 21 January 2026: The Institute for Democracy and Economic Affairs (IDEAS) today released its latest brief on ASEAN’s contemporary investment framework, titled Future Proofing Investment Regulation Across ASEAN. The report analyses the influence of recent geopolitical and economic developments on the region’s approach to investment regulation — to balance security with investment competitiveness.

For the better performing ASEAN economies, economic growth has long been supported by strong Foreign Direct Investments (FDIs) inflows driving industrialisation, technology transfer, and export-led growth. However, since 2019, the global investment landscape has shifted dramatically, driven by heightened geopolitical tensions, supply chain disruptions, and the increasing strategic importance of technology, data, and critical infrastructure. Despite these global and regional challenges, ASEAN has remained resilient, with FDI inflows growing 8.5% in 2024 to reach US$226 billion, demonstrating the bloc’s enduring appeal to investors. The brief stresses that sustainability of investor confidence will hinge on pursuing investment regulations with clear rules, transparent procedures, and strong governance capacity.

While ASEAN countries still covet FDI for economic development, globally FDI is increasingly viewed as a potential source of national security, technological, and climate-related risks. Advanced economies have responded by expanding their foreign investment screening mechanisms to safeguard strategic assets while remaining open to capital inflows. ASEAN member states now face the challenge of sustaining competitiveness and capital inflow while managing risk associated with foreign ownership, critical sector exposure, and strategic dependency.

“ASEAN is at a crossroad, the region must continue attracting investments while safeguarding national interest, technology, and climate objectives, a balance that will define its competitiveness for decades”, said Mohammad Jamil Hilmi A Ghani, lead author and PhD candidate at the S. Rajaratnam School of International Studies (RSIS), Nanyang Technological University (NTU), Singapore.

The brief examines how ASEAN governments are responding to this challenge by refining, rather than retreating from, their open investment regimes. Singapore, Vietnam, the Philippines, and Indonesia illustrate this trend, showing that market access can remain broad alongside stronger protections for sectors linked to national security.

The report highlights four different approaches from across the region:

• Singapore implemented the Significant Investments Review Act (2024), establishing Southeast Asia’s most comprehensive investment screening mechanism, centralising investment regulation whilst maintaining a pro-investment stance.
• Vietnam focused on selective market liberalisation and reducing investment barriers while introducing greater investment regulation policies to minimise risks, utilising a negative list system to streamline investment reviews.
• The Philippines liberalised foreign investment for selective industries and sectors, enacting policies and establishing the Inter-Agency Investment Promotion Coordination Committee (IIPCC) to promote foreign investment.
• Indonesia restructured its investment screening framework, replacing the negative list system with a positive list, while modernising regulations on foreign entities to reduce entry and operating barriers. But it also introduced export restrictions to push for improved investment downstreaming.

“Experiences within ASEAN show that future-proofing investment comes from raising regulatory clarity, not security overreach. Economic and strategic resilience comes from maintaining the competitive discipline of openness and being a predictable partner to global investors,” said Dr Stewart Nixon, Director of Research at IDEAS.

For more information, download the report and executive summary on our website.

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Ryan Panicker
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