Southeast Asia Watch List for 2026
Law firms in mainland Southeast Asia and the broader ASEAN region will navigate 2026 in the shadow of intensifying great‑power competition, new trade and investment regimes, and accelerating digital and climate transitions.
Five developments stand out as especially important for firms in Vietnam, Cambodia, Thailand, Laos, Indonesia, Singapore, Malaysia, and Myanmar that want to move ahead of, rather than merely react to, these shifts.
1. Great‑Power Rivalry and ASEAN Recalibration
The first major trend is the way geopolitical competition—especially between China, the United States, and other Indo‑Pacific actors—is reshaping ASEAN’s role, internal dynamics, and regulatory environment.
Policy analysts now describe ASEAN as operating in a “spheres of influence” landscape, where China‑centric and US‑aligned economic and security initiatives overlap and sometimes collide.
The 2025 ASEAN Summit in Kuala Lumpur produced a Second Protocol to amend the ASEAN Trade in Goods Agreement (ATIGA), explicitly aimed at reducing regional trade barriers and “flexibilizing” rules in response to external economic shocks and rising protectionism elsewhere.
ASEAN’s handling of Myanmar, including the decision to bypass it for the 2026 ASEAN chair and to rely on an ad‑hoc “troika” mechanism, illustrates both the limits and the continuing importance of ASEAN‑style consensus diplomacy for regional stability.
For law firms across the region, this geopolitical recalibration has several practical implications:
Cross‑border work will be more exposed to sanctions, export controls, and national security–framed regulations, especially in technology, data, and critical infrastructure sectors.
Government affairs, public policy, and trade‑law capabilities will grow in importance as clients seek guidance on navigating overlapping regional and extra‑regional regimes.
Disputes related to treaty interpretation, investment protections, and regulatory change—in energy, infrastructure, and digital trade—are likely to increase, creating opportunities for firms with strong international arbitration and public international law practices.
Law firms that systematically track ASEAN‑level negotiations and the evolving positions of key capitals—especially Singapore, Jakarta, Bangkok, Hanoi, and Kuala Lumpur—will be better positioned to anticipate where regulatory friction, new incentives, or alignment opportunities will emerge.
2. Trade Architecture: RCEP, ATIGA 2.0, and Supply‑Chain Rerouting
The second development is the maturation of the region’s trade architecture, especially the Regional Comprehensive Economic Partnership (RCEP) and the updating of ASEAN’s core trade agreements.
RCEP, which groups ASEAN with China, Japan, South Korea, Australia, and New Zealand, is now in its third year of implementation, with intra‑RCEP trade in 2024 estimated at about 5.8 trillion USD, up 2.4% compared with pre‑implementation levels.
Intra‑ASEAN trade itself grew by more than 7% in 2024 after a dip in 2023, a trend that regional commentators link partly to the stabilizing and liberalizing effects of RCEP and updated ASEAN trade rules.
Policy experts stress that the full benefits of RCEP will depend on more systematic monitoring and implementation—particularly in tariff reduction schedules, rules of origin, services and investment liberalization, and behind‑the‑border reforms.
At the same time, multinational companies are re‑routing supply chains away from over‑concentration in China, a shift that is already visible in increased investment into Vietnam, Indonesia, Malaysia, and Thailand in manufacturing, logistics, and intermediate goods.
For law firms in the region, these developments imply at least four lines of opportunity and risk:
Trade and customs: More complex rules of origin and tariff‑phase‑out schedules under RCEP and revised ATIGA provisions will generate demand for specialized customs and trade advice, as well as litigation and dispute settlement work.
Investment structuring: Corporates will need advice on structuring cross‑border investments to optimize market access and treaty protections while managing national‑security screening, especially in sensitive sectors like semiconductors, telecommunications, defense, and data infrastructure.
Competition and state aid: As ASEAN economies open further under these frameworks, national regulators are sharpening competition and consumer‑protection regimes, prompting more merger control and conduct‑investigation work.
SME internationalization: Regional SMEs increasingly explore cross‑border expansion under RCEP preferences, seeking cost‑effective legal support in market entry, distribution, agency, and franchising arrangements.
Firms that build regional “trade corridors” practices—linking, for example, Vietnam‑Thailand‑Indonesia manufacturing chains with Singaporean financial and dispute‑resolution hubs—will be best placed to capture these flows.
3. ‘Belt and Road 2.0” and the Green Infrastructure Pivot
A third trend is the evolution of China’s Belt and Road Initiative (BRI) in Southeast Asia from sheer volume to fewer, larger, and increasingly green or “high‑quality” projects.
BRI engagement worldwide hit record highs in the first half of 2025, with around 66.2 billion USD in construction contracts and 57.1 billion USD in investments, and a sharp increase in average deal size to roughly 1.24 billion USD for investments and 783 million USD for construction.
Analysts note a strategic pivot toward energy (both fossil and renewable), mining, high‑tech manufacturing, and transport infrastructure, with green projects—such as renewables and climate‑friendly investments—accounting for an estimated 44% of BRI‑related investment in 2023.
Singapore continues to position itself as a key financial and legal hub for BRI‑related transactions, with commentators highlighting the city‑state’s role in project finance, dispute resolution, and risk management for BRI infrastructure in the wider region.
For host states in mainland Southeast Asia and maritime ASEAN, this creates a complex mix of opportunities and exposure:
Project pipelines in transport, energy, and digital infrastructure are likely to expand further in Indonesia, Vietnam, Malaysia, and potentially Cambodia and Laos, bringing significant project‑finance, construction, and regulatory work to local and regional firms.
At the same time, debt sustainability, environmental and social risk, and community‑rights issues will heighten scrutiny from multilateral institutions, civil society, and domestic regulators, elevating the role of environmental and social governance (ESG), administrative law, and public‑law litigation.
Law firms that cultivate strong project teams spanning banking, energy, construction, and public law—often in collaboration between Singapore‑based regional hubs and local firms—will be well‑placed to advise on contract negotiation, risk allocation, regulatory approvals, and dispute avoidance or resolution.
4. Digitalization, Data Regimes, and Legal Tech Acceleration
The fourth development is the rapid evolution of digital regulation and the parallel emergence of Southeast Asia’s own legal‑tech ecosystem.
Commentators on the Asia‑Pacific legal sector point to data protection, cybersecurity, and platform regulation as key growth areas for legal services, driven by rising digital adoption, cross‑border cloud and fintech deployments, and regulatory convergence pressures.
Across ASEAN, data‑localization rules, cross‑border data‑transfer regimes, and sectoral cybersecurity requirements in finance, healthcare, and critical infrastructure are proliferating, with Singapore often acting as a norm‑setter and Indonesia, Vietnam, and Thailand rapidly tightening frameworks.
A January 2026 commentary describes Southeast Asia legal tech as a “strategic opportunity” not only for regional firms but also for international players, emphasizing the cost‑effectiveness and agility of solutions designed for the region’s diverse legal environments.
For law firms in Vietnam, Cambodia, Thailand, Laos, Indonesia, Singapore, Malaysia, and Myanmar, the implications cut across both client work and internal operations:
Client advisory work will expand in areas such as: data protection and privacy compliance, including cross‑border transfers under differing national rules; cybersecurity obligations, incident response, and regulatory reporting in regulated sectors; and fintech, digital assets, and e‑payments, where licensing and compliance standards are shifting quickly.
Internally, firms will face mounting pressure to adopt legal‑tech and process‑improvement tools—document automation, AI‑assisted research, workflow and matter‑management platforms—to maintain profitability in increasingly competitive markets.
A regional cohort of legal‑tech providers is emerging that can offer more adaptive, cost‑sensitive solutions than some global platforms, especially in languages, local compliance, and integration with regional court or agency systems.
The firms that will be most successful in this environment are likely to be those that:
Treat digital‑regulatory work as a core practice, not a niche, integrating technology, privacy, and sector‑specific regulatory knowledge.
Approach legal‑tech adoption as part of broader quality and process‑management initiatives, not just isolated software purchases.
This is particularly relevant for small and midsize firms that must simultaneously manage rising compliance complexity and fee pressure.
5. Climate Stress, Energy Transition, and ESG‑Driven Finance
The fifth development is the intensifying interaction between climate risks, energy‑transition policies, and ESG‑driven capital flows shaping Southeast Asian economies and, by extension, legal demand.
Global organizations highlight Southeast Asia’s exposure to climate impacts—ranging from sea‑level rise in delta regions (notably in Vietnam, Thailand, and Myanmar) to extreme weather events affecting agriculture, fisheries, and coastal urban centers.
Policy and investment reports underscore that green investments under initiatives like the Belt and Road are rising sharply, with Chinese enterprises alone channeling over 22 billion USD into green projects in Belt and Road countries in 2023, representing roughly 44% of their total BRI investment that year.
Multilateral institutions identify Southeast Asia as a critical theatre for sustainable infrastructure, blended‑finance mechanisms, and just‑transition strategies, particularly in coal‑reliant economies such as Indonesia and, to a lesser extent, Vietnam.
For law firms in the region, the climate‑energy‑ESG nexus will generate demand in at least four areas:
Project and energy transition work: Structuring renewable‑energy projects (solar, wind, hydro), grid‑modernization initiatives, and early coal‑retirement or conversion projects will require sophisticated project‑finance, regulatory, and environmental law capabilities.
ESG‑linked finance: Banks and institutional investors are increasingly tying lending and investment conditions to ESG performance metrics, leading to more sustainability‑linked loans, green bonds, and climate‑related disclosure obligations.
Regulatory and compliance advisory: Governments in the region are progressively tightening environmental and social regulations—impact‑assessment processes, licensing conditions, reporting requirements—creating demand for compliance counseling and, in some cases, strategic litigation.
Disputes and risk management: As climate impacts intensify, disputes over land use, resettlement, environmental damage, and insurance coverage are likely to grow, particularly around large‑scale infrastructure and extractive or industrial projects.
Firms that understand both international ESG standards and local regulatory realities will be able to position themselves as indispensable partners to banks, investors, corporates, and even public agencies navigating these changes.
What will all this mean for Southeast Asian law firms in 2026?
Across these five developments, several cross‑cutting themes emerge that should shape law‑firm strategy for 2026 and beyond, at least through 2028:
Regionalization of work: Trade and investment flows are increasingly regional rather than purely global, driven by RCEP, ATIGA reforms, and supply‑chain reconfiguration, which rewards firms that can collaborate across multiple Southeast Asian jurisdictions.
Regulatory density: Fields such as trade, digital, energy, and ESG are governed by overlapping national, regional, and global norms, increasing the value of practices that integrate public‑law, regulatory, and transactional expertise.
Operational pressure: Law‑firm profitability is squeezed by rising complexity and client demand for efficiency and predictability, driving internal needs for process improvement and technology adoption alongside external market‑facing innovation.
For firms in Vietnam, Cambodia, Thailand, Laos, Indonesia, Singapore, Malaysia, and Myanmar, the question is less whether these forces will shape their markets, and more how deliberately they will respond.
Firms that merely “wait and see” risk being relegated to low‑value work as more agile competitors—from regional networks to specialized boutiques and alternative providers—capture the high‑margin mandates in trade, infrastructure, digital, and ESG.
Those that invest in targeted capabilities, smart alliances, and disciplined internal operations will be positioned not only to manage risk, but to define new market segments and client expectations.
Your Strategic Partner for 2026 and Beyond
Walker Clark LLC helps law firms in Southeast Asia convert these complex geopolitical and economic shifts into clear strategic advantages rather than unmanageable risks. Drawing on more than two decades of advising small and midsize firms in more than 90 emerging and developed markets worldwide, including intensive work in Asian jurisdictions, Walker Clark works with partners to identify the specific trade, infrastructure, digital, and ESG trends that matter most for their client base and local realities, then translate them into practical, measurable business plans. By combining rigorous external market analysis with deep diagnostics of internal performance, pricing, and process quality, Walker Clark supports firms in designing focused growth strategies, building regional alliances, and implementing technology and quality‑management improvements that strengthen resilience and profitability in 2026 and beyond.
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