Indonesia ranks among the leading ASEAN markets for future European business expansion, according to the EU-ASEAN Business Council’s 2026 Business Sentiment Survey, as companies continue to see Southeast Asia as a key destination for trade, investment and supply-chain diversification. 

European businesses remain strongly committed to Southeast Asia, with Indonesia emerging as one of the region’s leading destinations for further expansion, according to the EU-ASEAN Business Sentiment Survey 2026 published on 8 September. 

The annual survey by the EU-ASEAN Business Council found that 78% of respondents expect their trade and investment in ASEAN to increase over the next five years, up from 71% in 2025. Meanwhile, 61% identified ASEAN as the region offering the strongest economic opportunities over the same period, ahead of China and South Asia.  

The survey, now in its 12th edition, assesses European business perspectives on Southeast Asia, including macroeconomic conditions, regulatory environments, regional integration and trade developments.  

Indonesia recorded particularly strong expansion interest. 

According to the survey, 57% of respondents plan to expand their operations or investments in Indonesia over the next five years, placing the country second among ASEAN markets behind Vietnam at 64%. Malaysia and Thailand followed at 49%, with Singapore at 44% and the Philippines at 43%.  

The results are particularly notable because Indonesia already has a substantial European business presence. Around 72% of survey respondents reported existing operations in Indonesia.  

At the same time, Indonesia continues to attract businesses that have not yet entered the market. Among respondents without an existing presence in the country, 32% indicated that they were considering market entry, compared with 34% for Vietnam and substantially lower shares for most other ASEAN economies. The report identifies Vietnam and Indonesia as the region's clearest markets combining established European business activity with new expansion potential.  

Economic growth and commercial opportunity remain the strongest drivers behind this expansion. Two-thirds of respondents placed economic recovery and growth opportunities among their three main reasons for expanding in ASEAN. Companies also highlighted appropriate laws and regulations, customer-base diversification and reasonable production costs as important considerations.  

Growing relevance of ASEAN for European business 

The findings reflect a broader shift in how European companies view Southeast Asia. 

Some 73% of respondents said ASEAN markets had become more important to their company's worldwide revenues during the previous two years. This share has remained at approximately the same level for four consecutive surveys, indicating that ASEAN's importance is increasingly structural rather than a short-term reaction to changes in the global economy. 

ASEAN is also becoming increasingly relevant to companies looking to diversify global supply chains. Among businesses already recalibrating or planning to recalibrate supply chains, 67% were considering ASEAN, compared with 29% considering South Asia and 24% China.  

The survey nevertheless highlights areas where further improvements could support additional investment, including regulatory predictability, the reduction of non-tariff barriers and more efficient customs procedures. 

I-EU CEPA could strengthen Indonesia's position 

For Indonesia, the findings come as economic relations with Europe enter an important new phase. 

Negotiations on the Indonesia-EU Comprehensive Economic Partnership Agreement (I-EU CEPA) were concluded in 2025, with the agreement now moving towards signing and subsequent implementation. The EU-ABC survey notes the agreement as part of a wider acceleration in bilateral trade relations between Europe and ASEAN economies.  

This broader positive direction is also reflected in EKONID's own engagement with companies operating in Indonesia. In EKONID's recent General Business Outlook Survey, progress on the I-EU CEPA was the most positively assessed domestic policy development among applicable respondents, while none assessed its impact negatively.  

The combination of strong market fundamentals, continued European expansion interest and a new trade framework could therefore further strengthen Indonesia's role in European companies' ASEAN strategies. 

For German businesses, these developments offer opportunities across a range of sectors while also increasing the importance of understanding Indonesia's regulatory environment, market structures and local business networks.