The automotive parts market in Nigeria

The Nigerian automotive industry appears to be an interesting market, as our research on the automotive parts market shows that the market size is worth USD 4.4bn or more.

The total vehicles in operation in Nigeria is currently estimated at 12.7 million, and Nigerian drivers spend an average of USD 350 on automotive parts per year.

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What is the mood among German companies in Iran? What measures have companies taken to respond to the new situation resulting from the reinstatement of US sanctions?

As could be expected, the mood among German companies is not good. Many of them waited throughout last year to see if there would be any movements on the political level. After this had not happened by November 5, the second stage of US sanctions, most of them have reduced their Iran business to a minimum and withdrew the German executives.

At the same time, hardly any German company has completely given up its engagement in Iran. They are all waiting to intensify business as the political environment improves.

Read the complete interview here. 

Foreign nationals can now get a business e-visa for one year with multiple entries subject to the number of days of the visit and registration requirements. Previously the visa permitted expatriates only two entries for a period of 60 days.

The notification by the Ministry of Home Affairs also states that nationals of all countries who are eligible for grant of e-visa can visit India on business e-visa for a continuous period of 180 days per visit.

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The growing young population together with economic growth on the continent lead to a growing labour force and cities which lead to a significant increase in middle class. Furthermore, the continent is pushing towards manufacturing and automation as this sector remains as the continent weakest link. Also, constant rise in foreign direct investment over the past decades is further boosting the economy not only in financial terms but as well in terms of knowledge, expertise and technology. 

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The interview tackles challenging issues in Russian immigration law, as well as the primary differences between Russian and German labour laws.

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German investment in the ten member states of the Association of Southeast Asian Nations (ASEAN) has been increasing steadily and has the potential to grow further in the coming years.

Several major German brands have already established offices or production facilities in Indonesia. Adidas, Airbus, BASF, Bayer, BMW, Daimler, Bosch, Siemens and ThyssenKrupp are among the major German brands with a presence in Indonesia. Several others have recently established offices or facilities or are on the verge of doing so. In particular, German companies are attracted to Special Economic Zones in Indonesia, which offer the perfect infrastructure for foreign business to set up in the country.

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When starting a new business venture in China, it is vital to embed internal control mechanisms within the company’s governance structure. The corporate governance structure of a wholly foreign-owned enterprise (WFOE) in China is made up of an executive director or alternately several directors constituting a board, one or several supervisor(s), and an authorized representative of the shareholder(s).

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China introduced the biggest changes to its individual income tax (IIT) system since at least 2011 with the passing of a new IIT law in 2018. The new law brought forward a host of changes to individual taxation in China, including by revising tax brackets, expanding deductibles, and altering residency rules for foreign workers. ​

In this Issue:

• What You Need to Know About the IIT Reform
• The IIT Reform’s Impact on Expatriates
• How to Calculate and Pay IIT for Your Employees
• IIT Calculation Methods for Lump-sum Annual Bonuses

View the complete report here. 

In which provinces are you working mainly at the moment?

The majority of our clients’ sales offices is located in Shanghai, from where our Chinese partner company also operates. Around half of the inquiries relate to assignments in Shanghai or the adjacent Yangtze Delta. Other important locations for European companies are the Pearl River Delta, the regions around Beijing and Tianjin, and Jiangsu – they are manufacturing hotspots.

Read the complete interview here. 

Several German companies have already established a business presence in Brunei. Heidelberg Cement has been present since 2000 supplies 65 percent of the construction market in Brunei. ThyssenKrupp is currently engaged in the construction of a major fertilizer plant in Brunei to support local efforts to diversify the economy. Siemens which is involved in Brunei since 1972, is currently studying the government’s effort towards and is to make large investments in the coming years.

Read the complete article here.

What opportunities arise for German companies from the Chinese initiative “One Belt, One Road”?

Launched in 2013 by President Xi Jinping, the Belt and Road Initiative already includes over 60 countries in Asia, Europe and Africa. Their gross domestic product adds up to around 21 trillion dollars or nearly 35 percent of global economic output. Around 4.4 billion people are encompassed – that is 60 percent of the world’s population. In about ten years, China wants to more than double its trading volume from 1.1 trillion dollars today to 2.5 trillion dollars. The new Silk Road is thus the largest geostrategic project of our century.

Read the complete interview here. 

Industry related economic sanctions include an arms and military embargo, restrictions for certain areas of oil production, dual-use goods and financial services. The US sanctions are partly broader than the EU sanctions and in particular additionally refer to areas such as metal construction, mining or engineering. With regard to Crimea, the US sanctions prohibit import, export and business activities completely. The EU sanctions prohibit import and tourism services, restrict investment in certain areas and prohibit the delivery of certain listed goods. 

Read the complete article here. 

While the Foreign Account Tax Compliance Act (FATCA) has stoked fears that this position may soon change – primarily because the act has caused some Hong Kong banks to turn away American corporations and individuals – Hong Kong remains the biggest source of foreign direct investment (FDI) into China, making up US$9601 billion of a total US$12846 billion from January to December 2018.

View the complete report here. 

Kenya has developed as hub for exhibitions and conferences during the past years and serves as gateway to a vital region. But also the neighbouring country are hosting various types of trade fairs from small niche events with less than 100 visitors to big exhibitions with thousands of visitors. 

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Opportunities Get out of Sight

Media coverage of the Russian economy is dominated by sanctions and the quarrels surrounding Nord Stream 2. To what extent are these topics important in the daily business of your clients?

The media‘s interest in the sanction topic and the diplomatic dispute over the major pipeline project is understandable. However, it is easily overlooked that much of the European business in Russia is not directly affected by the sanctions and can continue to operate. Other factors shape the business climate in Russia at least as significantly as the reciprocal sanctions: the decline in the rouble exchange rate since 2014 and the pursuit of an import substitution policy by the Russian government.

Read the complete interview here. 

What economic development do you expect for 2019 in Russia?

Our view does not differ significantly from the assessment of the Russian government. There should be growth of approx. 1.5 percent in 2019. That is better than what we saw in 2015 and 2016. However, higher economic growth would be desirable for Russia to catch up internationally.

The Russian government has been promoting export heavily for some time. How do you see the potential for this?

With the devaluation of the rouble in 2014 and 2015, the competitiveness of the Russian economy has risen. As a result, European companies are now exporting from Russia, for example in the automobile industry. This is a new and so far still small development. If the rouble does not appreciate and this trend continues, then industrial exports can make up a growing share of the Russian economy.

Read the complete interview here. 

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Dr. Frank Schauff is the CEO of the Association of European Businesses (AEB), representing the interests of the European economy in the Russian Federation. The membership organization was set up in 1995 at the initiative of various European companies and embassies as well as the Head of Delegation of the European Union in the Russian Federation. 

Hiring costs in IT and auto manufacturing

Information technology (IT) and auto manufacturing are the two most prominent sectors in India’s organized economy – they receive the bulk of foreign investment and are the biggest employers. The IT sector in India accounts for 67 percent of the global outsourcing market. While the overall manufacturing sector constitutes about 17 percent of India’s economy, automotive manufacturing is the largest contributor at 22 percent of the manufacturing GDP and seven percent of India’s overall GDP.

Read the complete article here. 

Investors in Vietnam are often surprised to learn that their biggest hiring challenge comes during the selection process for mid-level management. Mid-level managers in Vietnam play a crucial role in functions such as staffing, dispute resolution, and employee retention. Foreign companies are often ill-equipped to manage these challenges on their own and can find the costs of increasing turnover and labour discounting to be a significant constraint on time and resources.

Read the complete article here. 

ASEAN BRIEFING

A weekly round up of news affecting foreign investors throughout Asia by Dezan Shira & Associates.

Import Procedures in ASEAN
The article briefly explains the import procedures in Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Thailand, and Vietnam.

INDIA BRIEFING
India Mandates BIS Certification for Import of IT and Electronic Products
Importing electronics and information technology (IT) products without Bureau of Indian Standards (BIS) registration is now prohibited in India.

The country is tightening quality controls for electronic products to curb the rising import of cheap electronic items, in particular from China, and boost local manufacturing under its Make in India program.

RUSSIA BRIEFING
Russia Swaps US Dollar for Chinese RMB; Holds 25 Percent of Global Reserves
Russia is making a strategic shift in its reserves towards holding fewer dollars and more assets in other currencies, especially the RMB and Euro.

On the trade aspect, this makes sense, Russian trade with the US is close to zero, while with China it has been expanding fast – there are suggestions of it hitting US$200 billion in five years – a 20 percent increase year-on-year, every year from now.

VIETNAM BRIEFING
Vietnam Hikes Minimum Wages by 5.3 Percent in 2019
Vietnam’s National Wage Council has increased the minimum wage by an average of 5.3 percent in 2019.

The hike, which is the lowest compared to previous years, will increase the minimum wage in the four regions by US$7-9 per month.

In 2018, the increase was 6.5 percent, while in 2017 the minimum wage was hiked by 7.3 percent.

The article focuses on contesting penalties imposed by immigration authorities. The article examines specific aspects of jurisdiction in disputes with immigration authorities if the company is to be held liable.

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Minimum wages in China continue to grow. Through the first 11 months of 2018, 15 provinces, directly-controlled municipalities, and autonomous regions have increased their minimum wages: Beijing, Guangdong, Guangxi, Hainan, Henan, Jiangsu, Jiangxi, Liaoning, Shandong, Shanghai, Shenzhen, Sichuan, Tibet, Xinjiang, and Yunnan. One more region – Chongqing – has already announced its wage increase for 2019.

Last year – a politically important one – 20 out of the 31 regions in mainland China increased their minimum wages. In 2016, only nine regions increased their wages, while 19 did so in 2015.

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Efforts by the German firms can be supported by strong partners – leaving all the work to these partners is however not enough.  Interestingly, factors such as adapting products to local needs, lobbying the German or Nigerian government, as well as attending Nigeria focused trade shows did not have a significant impact.

Read the complete article here.