Some Challenges of Doing Business in Asia
Despite the economic impact on the global economy caused by the pandemic, Asia especially the central and southeastern parts have remained an attractive market for a lot of business owners looking to expand and establish their business within the region. But entering such a vibrant economy doesn’t always guarantee a smooth sail, there are still challenges that are inevitable. You can’t avoid them, but you surely can prepare for them. So here are some challenges of doing business in Asia to watch out for.
Ownership Restrictions in “SOME” Countries
Certain countries in the Asian region are strictly imposing rules and regulations for foreign business entering their market. While there are countries like Cambodia, China, Hong Kong, Malaysia, Singapore, and Vietnam that allow full foreign ownership of businesses, there still are countries that won’t let this happen. Some countries like Thailand, Indonesia, and the Philippines either allow it for all industries or only for certain sectors.
Minimum Capital Requirements
There are certain jurisdictions where a minimum capital is not required for businesses, which sounds good for business owners. But this doesn’t go both ways as it is only exclusive for local businesses and not for foreign brands. Countries like Cambodia require a higher capital for foreign businesses starting from a grand, and a much higher requirement for other countries.
Local directors are required (in some but not all countries)
The need for local directors varies from country to country, take Malaysia and Singapore for example, these countries require local directors to be appointed. While situations like this happen in the mentioned countries, Cambodia is one of those countries in Asia that allows either foreign or local directors for businesses as long as they already have a local tax ID.
Having a physical office is a must
Jurisdictions all around Asia require businesses to at least have some type of office presence. And having a registered address is a statutory requirement for some countries. This may range from just having a registered office to having a physical presence that can be subject to inspection by local authorities.
These are just some of the many challenges you as a foreign business owner may face the moment you try to enter the Asian region. And preparing for them might increase your chances of finally establishing your own business in this challenging yet exciting market.