In the interconnected and rapidly evolving economic landscape of Southeast Asia, a significant transformation is taking place.
At first glance, it may appear as a minor adjustment in business practices.
However, electronic invoicing – or e-invoicing – is emerging as a crucial mechanism for streamlining trade, reducing costs and enhancing economic efficiency across the ASEAN region.
According to a policy brief ‘Promoting E-Invoicing Interoperability in ASEAN: Overcoming Barriers to Trade Digitalisation’ by Manager for Digital Innovation and Sustainable Economy at Economic Research Institute for ASEAN Mahirah Mahusin and East Asia (ERIA) and ERIA Research Associate Hilmy Prilliadi, businesses operating across multiple ASEAN countries face a myriad of challenges, including navigating diverse tax regulations and managing invoicing processes – often relying on outdated paper-based or PDF formats.
Such systems are prone to errors and delays, which can lead to significant financial repercussions. E-invoicing addresses these issues by enabling the exchange of invoices electronically in standardised formats. This system automates processing, minimising manual intervention and reducing costs and errors.
In ASEAN, a region heavily reliant on trade, the importance of e-invoicing cannot be overstated. The e-invoicing market in the region has experienced steady growth, from USD500 million in 2020 to a projected USD1.5 billion by 2028, with an annual growth rate of 15 per cent between 2021 and 2028.
These figures underscore the vital role of e-invoicing in facilitating cross-border trade and advancing the digital economy.
OVERCOMING REGIONAL BARRIERS
Despite its advantages, the adoption of e-invoicing in ASEAN is not without challenges. The disparities in technology infrastructure, conflicting data governance policies, and concerns about cybersecurity pose significant obstacles.
To address these issues, ASEAN launched initiatives such as the ASEAN Digital Masterplan 2025 and Bandar Seri Begawan Roadmap. Building on these initiatives, the policy brief mentioned that the Framework for Negotiating ASEAN Digital Economy Framework Agreement (DEFA) aims to encourage e-invoicing interoperability and the creation of regulatory frameworks tailored to ASEAN member states’ needs (ASEAN, 2023). In addition, the 4th ASEAN Source: Basware, 2023; Corcentric, 2024; Singh, 2024.
Digital Ministers’ Meeting endorsed the ASEAN–EU 2024 Digital Workplan, which focuses on enhancing interregional trade exchanges by promoting interoperable e-invoicing systems (ASEAN, 2024). Collectively, these actions underline ASEAN’s commitment to leveraging e-invoicing as a tool for regional digital integration and economic growth, free from technical and regulatory impediments.
Singapore’s InvoiceNow system exemplifies the benefits of aligning with international standards. By leveraging the Pan-European Public Procurement Online (PEPPOL) framework, widely used in Europe, Singapore has facilitated greater integration between businesses across different jurisdictions.
Malaysia’s phased implementation of e-invoicing, beginning with large enterprises in 2024, demonstrates a pragmatic approach to introducing digital systems in stages. While government initiatives play an important role, the private sector, particularly small and medium enterprises (SMEs), is essential to the broader adoption of e-invoicing. Many SMEs are hesitant to transition due to concerns over costs and technical complexities.
To alleviate these concerns, ASEAN nations are offering financial support, training programmes, and simplified systems.
Singapore, for example, has implemented grants to assist businesses in adopting e-invoicing systems and provides discounts for early registration. These measures are designed to lower barriers to entry and encourage SMEs to engage in the digital economy.
ADDRESSING CYBERSECURITY CONCERNS AND ASEAN’S DIGITAL AMBITIONS
The transition to online systems heightens the importance of robust cybersecurity measures. The risks such as data breaches and inconsistent data-sharing regulations between countries can undermine trust in e-invoicing systems.
ASEAN must prioritise the development of clear, standardised protocols for data protection and governance to ensure businesses and governments can operate with confidence.
E-invoicing represents a foundational step in ASEAN’s broader digital transformation. By fostering collaboration among member states, ASEAN has the potential to establish itself as a leader in digital trade.
The projected economic benefits are significant, with potential savings estimated at USD94.55 billion for the region’s 70.6 million micro, small, and medium enterprises (MSMEs).
Aligning regional systems with international frameworks, such as those established by the World Trade Organisation, will further enhance legal clarity, attract foreign investment, and bolster ASEAN’s position in the global digital economy.
The journey towards widespread adoption of e-invoicing across ASEAN will require sustained effort and adaptability.
Tailored strategies that consider the unique circumstances of each member state are essential. Success will hinge on close collaboration among governments, businesses, and international organisations.
E-invoicing is not merely a technological upgrade; it is a strategic tool for fostering efficiency, security, and resilience in trade. By embracing this innovation, ASEAN can position itself to shape the future of commerce in an increasingly digital world. – Izah Azahari
