What You Need To Know When Investing in South East Asia?

October 23, 2013 | Valerie Wong

If you're planning on starting a business anywhere, you will need to do a good amount of research before you actually can get your new enterprise up and running. But if you're in the process of investing in another country, there are some additional things that you would need to consider. The business climate, culture and regulations will probably have some similarities to what you are used to at home, but there will also be some noticeable differences. For those who plan on investing in South East Asia, here is what you need to think about: 

Know the Country You Are Planning on Entering

Every country in the region will have its unique attributes, when it comes to the health of their economy, pro-business policies put forward by the government, the availability and quality of the local workforce, as well as the pool of consumers that you can sell your products and services to.

You will want to read up on the specific country that you are planning on investing in to find the information you need. 

Be Aware of What You Need to Do To Get Your Business Going

In an ideal world, you could just rent an office, lease retail space or build a factory, put up a sign with the name of your new business and start trading right away. However, the reality of starting a business in the region is far more complex.

You will need to fill out various forms, submit documents, wait for approval and get the necessary permits before you start carrying out your activities. This doesn't mean that you would need to spend days waiting in line at various government offices to get some official to stamp various papers. In nearly every country of the region, parts of the process can be done online. In some countries, such as Singapore, registering a new business can be done almost entirely by sitting in front of a computer and filling out online forms. Other countries would require that you, or a person representing you, appear in person at government offices to submit paperwork and fees.

The amount of time elapsed between submitting the first paper and having your business up and running will vary from one country to the next and will also depend on the specific type of business that you are setting up. For example, setting up a factory that produces chemicals will require more in terms of paperwork and permit than opening up a web design firm. 

Know the Total Costs Involved

While it may be true that operating a business in South East Asia can be less expensive than operating a similar type of enterprise in the USA or European Union countries, the cost savings may not be as deep as they would first appear to be.

Retail space in Thailand may be relatively inexpensive, but in a smaller country like Singapore, it can represent a significant amount of overhead. Same goes for hiring local staff. Salaries may be lower, but in many places employers are required to pay various fees, taxes and contributions for each person that they hire.

Corporate taxes are another issue. Again, they will be less than what you could expect in the USA, but you will generally have to pay taxes on your profits. Some places may have tax reductions or exemptions for certain categories of businesses, however. All of this means it is extremely important that you be aware of how much running your enterprise will cost you in total.

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