Wealth
through value creation. Opportunity from solving problems. That is what
business and entrepreneurship is about, and right now we live in the best time
in the history of man to start a business. However, the opportunity to start a business
is not in the old world – Europe, the US, The West.
The
west is broken, the examples are too numerous to list, and the writing is on
the wall. Plenty of other intelligent emerging entrepreneurs and investors are
all saying the same thing: the party is over in the west. If you want to get
rich: go east young man. Guys like Jim Rogers and Marc Faber, and the infamous
Simon Black (who, for the record, is a real person – an intelligent and
authentic international investor, but orders very girly drinks at the bar…)
In
case you aren’t convinced…
Writing.
On. Wall.
You
don’t have to go down with the sinking ship. You have the ability and the
freedom to change your location, pioneer into a new, fresh economy. With a bit
of planning you can plant a flag in an emerging economy. Here are 7 that should
be on your radar.
Thailand
Thailand
is South East Asia for tourists. It is unlikely you will catch a glimpse of the
Real Thailand during your first, second, or even third trip. Indeed, many
places are like this, but Thailand has an outer shell that caters specifically
to tourists. What I’m driving at is that when you go to a place like Phuket, or
Krabi – you can have a good time, but there isn’t a good business to start
there, you probably will meet a bunch of bogan aussie tourists, and then return
home.
Overall you just won’t get
to experience the REAL Thailand.
Unlike
the other places on this list, Thailand is a place where people go mostly to
vacation, not in search of opportunity. There is plenty of business
opportunity in Thailand, you just need to know where to look, and you
absolutely have to know the right people. Thai laws surrounding business are
complicated and restrictive to foreign investment for the most part.
Company Law in Thailand |
Amity Law
However,
the laws have subtle details that allow attuned and well-connected businessmen
to succeed. For instance foreigners are restricted to 49% ownership of
companies – BUT there is a provision in the law which allows for Americans to
own a different type of company, and own %100 of a business (with other
restrictions, such as amount of shareholders and restricted business types)
through a provision in the Amity treaty – sometimes called an “Amity Company”
for short. However, you can’t own land with this company, and in almost cases
you will not be allowed to own land in a company where you are a majority
shareholder unless you have specific permission from the Board of Investment
(BOI). Navigating business law in a foreign country is not for the meek, but it
is extremely important to set up your business with a proper foundation of
incorporation.
Myanmar
Burma
is a country that is exploding with opportunity right now. Strategically
situated between China and India, Myanmar finally opened up last spring to a
wave of foreign investment. I know a person who made $50,000 his first week in
the country, he hadn’t even incorporated yet and people were literally throwing
cash at him for the services he could provide (which, by the way, he had never
done before in his life before he set foot in the country).
Myanmar
will undergo extreme growth over the next few decades as it catches up with the
rest of SE Asia. Popular plays include serviced hotels and offices, legal
services, tax services, any type of service will be in high demand. The entire
value chain is up for grabs, and almost every private equity investor I meet is
doing something in Burma, or currently searching for investment opportunities
there. If you want to see how to set up a company in Burma, see this article,
or leave a message with Jessica.
Mongolia
Bring
your jacket, its freaking cold here, but there is tons of opportunity in
Mongolia. The country is growing at over 15% per year. That is insane growth,
but its being fueled by a commodity boom. Time will tell if the country can
also shift resources to other sectors. I quite like this emerging markets
interview about the country and entrepreneurs who have gone there to set up
shop.
In
many emerging economies, it takes a leap of faith to leave the comfort of home
in search of something better. You have to be willing to live like no one else
is willing now, so you can live like no one else can, later.
Africa
Everyone
I talk to that has cash to spend on Emerging markets is going, has been, or is
considering Africa – but they aren’t sure on the timing. With 60% of the world’s
arable land, it’s an obvious choice. You have to be careful about what country
you go into, and I highly recommend that you find a local partner on the
ground. This is important in any of these locations, but Africa in particular
due to language barriers in many countries. I met some entrepreneurs the other
day who are getting funding from the Middle East to build secure car parks in
strategic locations in Ethiopia.
Paraguay
This
is a sleeper pick. You can get permanent residency in Paraguay rather easily,
and even citizenship, and the country has a large amount of cheap and fertile
farmland. Great place for many different types of flags. Less expensive than
Ecuador or Uruguay due in part to its landlocked location, Paraguay is somewhat
undeveloped – which places it in a great place for growth over the coming
years.
Particularly
when food shortages in other countries in South America, Paraguay could see its
exports rise, and farmland appreciate in value.
Sri Lanka
If
Paraguay was a sleeper pick, this is a more obvious choice. Coming off a recent
civil war which decimated the country’s economy for decades, Sri Lanka has a
need for basic services. For instance, only 10% of the people in this country
own a smart phone. Huge opportunity in Sri Lanka in almost every sector. Very
similar to Myanmar in that respect, except because Sri Lanka is not
strategically located between other emerging markets, most businesses would
likely be a play on the local market IN Sri Lanka. Due to the poor population,
you would be wise to pick a basic need first and then go up the value chain.
However it is clear that Sri Lanka needs a lot of help, and those who are able
to solve problems in this country will be rewarded with ample compensation.
Philippines
You
could easily miss this country, or visit for a short trip and immediately
dismiss it outright. However, the Philippines are where a surprising amount of
stuff goes down. There is opportunity in many different sectors, and it’s not
difficult to penetrate into the inner circle of key players who run the country
with a few connections and a little bit of money. You’ll find scuba guys on
vacation, expats, and the special type of entrepreneur building a business in
an emerging economy leveraging currency arbitrage.
These
guys have been around the block a few times and understand that there is hidden
opportunity in the Philippines that you might not catch at first glance. For
starters, in terms of value, Pinoy are perhaps the very best workers in the
entire world. You won’t find a first rate python programmer or slick designer –
but for basic human labor, there is a virtually unlimited supply. The most
popular businesses are call centers, and outsourcing centers. Dollars go very,
very far when converted into PHP.