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Southeast Asia continues to establish itself as an attractive market for European business expansion, driven by supply chain diversification, rising consumer demand, and ongoing trade negotiations. Opportunities span exports, manufacturing investments, and services, although prospects vary by country and sector.
Growing business interest is reflected in the findings of the EU-ASEAN Business Council and the strengthening of economic dialogue between Brussels and the region’s capitals. According to the Business Sentiment Survey published by the association in September, 78% of surveyed European business representatives expect trade and investment in ASEAN to increase over the next five years, up from 71% in 2025. The same proportion plans to expand operations in at least one market in the region, with Vietnam and Indonesia remaining the leading destinations. The survey, conducted among approximately 150 executives, also found that 61% regard ASEAN as offering the strongest economic opportunities among the emerging markets considered, including China and South Asia.
Part of this demand is driven by the restructuring of supply chains. Among companies reviewing their supply chains in response to trade uncertainty, 67% are considering ASEAN. This figure highlights the region’s potential as a manufacturing hub and a base from which to serve neighboring markets. For European suppliers of industrial equipment, components, and services, this transformation presents opportunities that need to be assessed against the specific requirements of individual projects.
On the trade front, an important development concerns the Philippines. On September 22, Reuters reported that a preliminary free trade agreement had been reached with the European Union. The terms agreed at the political level must still be translated into legal text before the agreement can be finalized. The planned elimination of more than 94% of tariffs on both sides could benefit European exports of machinery, equipment, and transport vehicles, as well as meat, dairy products, and alcoholic beverages. These trade benefits therefore remain subject to the agreement’s finalization and implementation.
Cooperation also extends to energy, finance, and technology. The 12th ASEAN-EU Business Summit identified five key areas of discussion: energy transition, financial inclusion, digital connectivity, AI-driven transformation, and health and nutrition. In these sectors, partnerships may involve equipment supplies, specialized services, and skills development, depending on local needs and market access conditions.
Malaysia provides an example of industrial transformation. The Financial Times has reported on the country’s expansion in semiconductors and data centers, supported by AI-related investments. The development of this infrastructure is placing increasing emphasis on electricity and water availability. For European companies specializing in cooling systems, energy efficiency, and water management, these developments may offer opportunities for collaboration, subject to commercial feasibility and the environmental requirements of individual projects.
For Italian businesses, an interview published by Forbes Italia on June 29 provides insights into potential market entry strategies. Singapore is identified as a suitable location for establishing corporate and financial structures and coordinating regional operations. Vietnam and Thailand, meanwhile, emerge as potential destinations for manufacturing and production diversification. The choice of operational base therefore depends on a company’s objectives: selling, manufacturing, distributing, or managing operations across multiple countries.
Expansion opportunities nevertheless come with operational challenges. According to the EU-ASEAN Business Council survey, 73% of respondents report excessive barriers to efficient supply chain operations, while 67% identify a lack of regulatory harmonization as a challenge. Companies preparing to enter the region must therefore carefully assess national regulations, potential partners, and distribution channels.
The overall outlook remains favorable for the development of new economic relationships. However, opportunities become tangible when they are linked to clearly defined markets, customers, and projects.
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