APAC Investment Outlook 2025: Opportunities Abound—But So Do Corruption Risks

Southeast Asia, one of the most dynamic and rapidly evolving regions in the world, has quickly become a global hub for innovation, and is poised to see even more growth as US and Chinese companies continue to invest in the region’s local economies.

Yet President Trump’s promised tariffs and trade war with China will impact the region and—coupled with persistent challenges around fraud and corruption—could jeopardize this growth. Here’s what to know about the region’s investment opportunities and challenges in the year ahead.

Technology Investments Pick Up

Expect to see Southeast Asia become the site of even greater strategic and economic investment, especially among tech companies.

The region has seen considerable capital inflows in tech infrastructure and training of late. In 2024, for example, Google announced a new $1 billion data center and cloud region investment in Thailand, while Microsoft announced a $2.2 billion investment in Malaysia’s digital transformation to support artificial intelligence (AI) and cloud infrastructure. Other major US tech companies are getting in on the action: NVIDIA announced a new research and development center in Vietnam, and Amazon is investing another $9 billion in cloud infrastructure in Singapore.

These US investments are making headlines, but Chinese companies continue to plant seeds throughout the region. Tech giant Huawei is helping to make Thailand a digital hub with major data center investments, and last year Tencent announced a $500 million cloud investment in Indonesia. Chinese companies are also pursuing large-scale mergers and acquisitions in these countries: TikTok and Indonesia’s Tokopedia closed a major merger in early 2024, for instance.

As President Trump takes office, the specter of high tariffs and a trade war with China will likely send US companies looking for safer business opportunities in Southeast Asia. Yet the Association of Southeast Asian Nations is also China’s largest trading partner, so competing Chinese and US investment—particularly amid broader geopolitical tensions—could see proxy economic battles shape the region.

Fraud and Corruption Continue to Cloud the Business Landscape

Though the Southeast Asian tech sector has seen a successful post-pandemic recovery, not all industries have been so fortunate. Staple sectors such as oil and gas faced headwinds due to the global clean energy transition, whereas manufacturing experienced increased raw material and input costs and supply chain disruptions. Consequently, major fraud and corruption have come to the fore in the wake of attempts to hide pandemic-era financial losses.

The founder of a Singapore oil trading company was sentenced to nearly two decades in prison for fraud in November, for instance, while an embezzlement scandal by the Stark Corporation became one of Thailand’s largest corporate frauds in recent memory. A Thai renewable energy company was mired in controversy over procurement fraud last summer. And in a shocking example, Vietnamese real estate mogul Truong My Lan was sentenced to death for $27 billion in misappropriated funds and $12 billion in embezzlement from Saigon Commercial Bank, the country’s fifth biggest lender.

The reality is that corruption remains a serious risk for businesses operating in the region. Political power remains concentrated with influential families—such as the Marcos family in the Philippines or Shinawatra family in Thailand—that retain control over the state. Their influence over the levers of government continues to raise concerns about nepotism and weakening democratic processes—both of which could jeopardize business and investment.

Choose Partners Wisely

With stiff competition for skilled labor and a history of corruption in the region, limited transparency and accountability in business will often lead to fraud.

In fact, companies with mediocre post-pandemic performance may be attempting to pose as high performers through financial statement fraud with the goal of attracting investments or even an acquisition. That’s not all: These businesses may misrepresent their environmental, social, and governance practices or ratings to better attract US companies that prioritize these principles when selecting suppliers or partners.

Such fraudulent practices are a ticking time bomb without thorough due diligence—even for the most well-known global companies—and integrity due diligence (in addition to standard financial and legal due diligence) from an independent third party can help investors make informed decisions.

Finally, ensuring alignment with the investor’s corporate governance best practices, along with values and ethics, should be top of mind in the year ahead.