Once you have take the decision to move for good, you won't be able to do it right away, and this is a good thing! This period of time is key. In our humble opinion it is a good thing not to rush it but take at LEAST 6 month to do some preliminary work, maybe a trip if you can, in order to stack all the odds in your favor. You’ll have a lot to go through. Once again (I think I’ll harp on it all along my posts), don’t expect things to be easier abroad. We see a LOT of people coming and failing every year in Siem Reap and in Cambodia in general because they come unprepared, believing doing business in a developing country will be easy. If you have only one thing to remember from my posts it would be this simple advice.
Based on our experience, preliminary work to expatriate divides in main 3 parts:
-Research about the country/countries you identified
-Market research, project preparation
Those topics being extremely important, they will be treated separately on 3 different posts. This one is about the first point, Studying your targeted country.
You may already have a country in mind for your project, it is great if you do; it is already a big step in the process. But it doesn’t exonerate you from digging a bit deeper. You may have a shortlist or a region in mind. In all cases, the job will be the same, only you’ll have to duplicate it to all the countries you are considering.
At that point, two things are important to look into:
-How’s doing business as a foreigner?
-How’s life as a foreigner?
Countries are very different from one to another when it comes to welcoming foreign entrepreneurs. Some are very welcoming; some others are way more restrictive. Here are some key factors you want to check:
Can you own a company as a foreigner?
Depending on the country and your project, you can expect 3 categories of answers to this questions: “No” (a pure ban on foreigners to invest/run a business, usually in some very specific industries), “Yes but” (In most cases the restriction will consist in you needing to partner with a local), “Yes”, some countries apply the same rules to foreigners and nationals, it can be the case for all industries or only selected ones for which the country needs to import knowledge and investments.
If the answer is “Yes but”, you may want to go deeper and check how serious are the restrictions. For instance, the “partnership” is the most common barrier to open a company, you will need a local partner who will own 51% of the shares of the company. Of course, in a most cases, almost all cases, the local will not bring a penny to the company. This is very often considered as a formality, which specialized lawyers will do for you with someone you’ll never meet. To my knowledge, that’s still the case in many countries (still, check the costs of the lawyer, you may have surprises); but not all of them. In Thailand, for instance, depending on the kind of business you want to open, your partner will need to go and explain to a commission your business plan and answer specific questions, so if he’s a fake partner, he better be well trained. Controls are more and more frequent and some countries put some measures to prevent the partner from being a fake one, for example, some administrative tasks may need to be done by your local partner only.
Always keep in mind; your partner will own 51% of the shares, so even if it remains only on the paper, that still can be a sword of Damocles over your head. Legislations evolve and can put you in strange situation.
Are there any other barriers, doing business as a foreigner?
Those can vary a lot; Cambodia is quite welcoming so I don’t have many examples in mind, but I know some countries will require a minimum capital to deposit in order to register your company, it can be several tens of thousand dollars.
Corruption can also be taken into consideration at that point, although you want to look a bit deeper than just sayings you heard from someone who knows a guy whose sister in law’s father went on a 10 days tour in the country 12 years ago. Cambodia, for example is said to be very corrupted, and maybe it is at some levels, but in 3 years, we never paid any bribe. I believe that, even in a country where corruption exists, that is your choice more than the general context. You can always take the shortcuts; don’t do things the proper way and pay people not to bother. I strongly recommend not going in that path; that may avoid the hassle of some paperwork, or save some time, but it usually backfires. Once you’ve started, it is hard to get out of this circle. We have many examples I may talk about in a dedicated post. If you do things by the books, chances someone comes to ask for money are way thinner.
How’s life as a foreigner?
We tend to forget it when we live in our own country, but living as a foreigner is not always easy as we wish it would be. You may be exposed to unpleasant situations, with the immigration system, or the population.
Staying in a foreign country requires visas, work permits etc. they can be easy to obtain or a real pain. Requirements differ from one country to another and can sometimes be a hassle.
Once you are settled, you may have obligations as an alien, like checking in at the immigration police every quarter and/or every time you leave or enter the country. I’m not taking any judgment on those legislations, they are sovereign countries and do what they think is best for them, but it may have an impact on how you feel once living there.
We are very lucky to feel very welcome in Cambodia and have never faced any racist comments. Western and especially French are very appreciated, even more when they create jobs. But it is not the case everywhere, some countries seem to be culturally much more opened to foreigners than others, and facing negative vibe from local must be a hard thing to handle on the long haul.
You can search for other information too; a few that cross my mind are:
What is the expat community like?
I know, you don’t go abroad to stay with people from your own country of similar ones, but depending on the cultural distance of the country you would like to expatriate to, it can add some comfort. Whether you like the idea or not, an overwhelming majority of foreigners hang out mainly with other foreigners. I believe this is nothing but natural. The reasons are simple, first you have much more in common, second, it is much easier, and makes you feel a bit home. We have Cambodian friends, but our closest ones are also expats and to be honest having a big expat community around us makes our life more comfortable.
The expat community varies a lot from one place to another, the number of people changes, their occupation, their age, their mentality etc. if the community is big enough, you’ll most likely meet people you will get along with, but if the expat community is tiny, it could be a good idea to take a look at who they are. But of course, that depends on what you are looking for, and where you are going. If you are expatriating from UK to the US or Australia, that may not be relevant.
What is the cost of living?
That’s a big thing to take into consideration too; especially as an entrepreneur, that can give a “go” or a “no-go” to your project. Living in S-E Asia is quite cheap, if you live the local way; but more expensive (still less than Europe) if you live a western way of life. Check for example apartment rentals, costs of food etc.
How accessible is the country?
South East Asia and Cambodia in particular are great examples of this. Some neighbor countries have complete different accessibility. To come to Cambodia, plane tickets are usually $100 to $200 more expensive than Thailand, Singapore or Vietnam, and the trip takes about 3/4hours longer (No direct flight to Europe). In addition, contrary to those countries, Cambodia has no visa-waving programs for western countries so even for a one-week stay, a visa ($35 per person) is required. That can refrain friends or family from coming or reduce the frequency of you traveling back home.
What is the country's economical, political context?
If you are thinking of going to a developing country, checking those things may be particularly interesting.
In regards to economic metrics, you can dig into: GDP growth, average salary, tourism evolution (in terms of numbers and behavior if possible, relevant only if your activity is linked, of course), age pyramid etc. Basically, everything you can find and makes sense for your project. More than the current picture, the evolution will tell you a lot about the country.
When it comes to politics, stability is what you want to look for, of course, you can't figure what will happen in the future, but it always feels safer to invest in a stable country than one where coups happen every other year.
You may find this kind of information on specialized websites, by contacting local consulting agencies, on forums, expat groups on Facebook, contacting business owners you’ve met during a prior trip, don't be afraid of bothering people, if they are too busy, or just don't want to answer your email they just won't. All means are good to increase your chances of success.