Summary of ASEAN Framework Agreement on Services (AFAS)
In the area of Trade in Services, ASEAN formalized its integration commitment through the signing of ASEAN Framework Agreement on Services (AFAS) by the ASEAN Economic Minister (AEM) on 15 December 1995 in Bangkok, Thailand. All AFAS rules are consistent with international rules for Trade in Services as provided for under the GATS Agreement of the World Trade Organization (WTO), as the article XIV(1) of AFAS provides that “The terms and definitions and other provisions of the GATS shall be referred to and applied to matters arising under AFAS for which no specific provision has been made under it.”
Under the AFAS, numerous packages of AFAS liberalization commitments have been made, concluded and signed by ASEAN Member States since the signing of AFAS in 1995. To date, ASEAN Economic Ministers (AEM) had signed 8 protocols to implement 8 Packages of Commitments which cover a wide range of services sectors. Each member states have to make Schedules of Horizontal Commitments, general commitments which binding all sectors of Trade in Services, and Schedules of Specific Commitments, commitments which binding only specific sectors of Trade in Services. Moreover, AFAS has adopted the same four Modes of Supply as used in GATS, including (1) Mode 1: Cross-Border Supply (2) Mode 2: Consumption Abroad (3) Mode 3: Commercial Presence (4) Mode 4: Presence of Natural Person.
Summary of Horizontal Commitments & Specific Commitments
Summary of Horizontal Commitments – Limitation on Market Access
Member States | MODE 3 | MODE 4 |
Brunei | - UNBOUND | - UNBOUND except
(1) managers (2) executives (3) specialists |
Cambodia | - Investors, seeking incentives under the provision of the Law on Investment shall provide adequate and consistent training to Cambodian staff. | - UNBOUND except
(1) managers (2) executives (3) specialists |
Indonesia | - Commercial presence of the foreign service providers may be in the form of joint venture and/or representative office
(1) Limited Liability Enterprise, (2) Not more than 49% of the capital share of the Limited Liability Enterprise owned by foreign partner(s). | - Business Visitors - Intra-Corporate Transferees (1) managers (2) executives (3) specialists |
Lao PDR | - Commercial presence of foreign service suppliers can be in the form of joint venture, wholly owned by foreigner, or a branch or representative office. - Foreign investors/service suppliers in a joint venture must contribute a minimum portion 30% of the total equity investment in that venture. | - Foreigners who work in Lao PDR shall be subject to the law on Promotion and Management of Foreign Investment in the Lao PDR and the regulations on immigration. |
Malaysia | - The acquisition of assets or interests of Malaysian companies, mergers or take-overs requires approval and apply to the following:
| - UNBOUND except
(1) Senior managers, (2) Two specialists or experts per organizations
(1) Specialists or experts (2) Professionals (3) Business visitors |
Myanmar | - Commercial presence of foreign service suppliers and/or providers are permitted under these laws:
- The form of incorporation can be sole proprietorship, partnership or limited company. | - Management level is allowed to stay up to one year and may be extendable there on subject to the approval of concerned agencies. |
Philippines | - The participation of foreign investors in the governing body of any corporation engaged in activities expressly reserved to citizens of the Philippines by law shall be limited to the proportionate share of foreign capital of such entities. - All executive and managing officers must be citizens of the Philippines. | - Non-resident aliens may be admitted to the Philippines for the supply of a service after a determination of the non-availability of a person in the Philippines who is competent, able and willing, at the time of application, to perform the services for which the alien is desired. |
Singapore | - NONE | - UNBOUND except
(1) Managers (2) Executives (3) Specialists or Experts |
Thai | - Commercial presence in sectors or subsectors in this schedule is permitted only through limited liability company which is registered in Thailand or the other type of legal entity as specified in the sector-specific commitments, and will have to meet one of the following condition as indicated in the sector-specific commitments:
| - UNBOUND except
(1) Managers (2) Executives (3) Specialists or Experts |
Vietnam | - Foreign enterprises are allowed to establish commercial presence in Vietnam in the form of:
| - UNBOUND except
(1) Managers (2) Executives (3) Specialists or Experts
|
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