Asia Business Investor Blog

Asia Franchise Exhibition

2008-10-15T14:43:00.003+08:00

The annual Franchising & Licensing Asia 2008 exhibition opens tomorrow at Suntec City in Singapore. There are expected to be over 10,000 visitors to the exhibition that are there to see first hand more than 200 exhibitors of franchise systems.

According to a report by Ecademy Asia Pacific, the annual revenue from Asia’s franchise markets are growing at over US$50 billion annually, and annual revenue will grow at over US$100 billion annually within five years. It is a major event and major franchise chains attending.

These statistics demonstrate that there is surging demand for franchises in Asia.

The improvements in per capita income in Asia are the key drivers. Franchisers do have a unique opportunity to develop business well beyond their own markets and those looking at franchising can buy into a proven system.

Quite a number of the participants are traveling to come to this annual exhibition. We will be following the exhibition and provide some audio recordings in our podcast section on the growth of asia franchise and asia franchising in general.

A Business for Sale : Five Common Mistakes

2008-09-08T11:21:00.008+08:00

Here are five key reasons businesses often fail to sell.

Lack of Exposure

Lack of exposure is usually the primary reason that businesses fail to sell, especially in Asia. Many traditional business owners continue to rely on friends and business connections to sell their business. Whilst, this way does in some cases produce a successful outcome, in others it does not work at all or it takes a very long time. Most people would not sell their house this way so selling a business should also be about attracting the most potential buyers and that requires an increase in exposure.

Newspapers are another potential trap as whilst a newspaper advertisement can reach many readers, almost all are not in the market to buy a business. They are not necessarily qualified prospects. It can take up to six months to sell a business and it is very expensive to place advertisements on a weekly or daily basis with costs potentially running into the thousands of dollars.

Web based directories are some of the best ways to optimise coverage to potential sellers as they are more cost effective and will target those buyers that are looking to buy a business. A potential buyer can simply search what is available from a website 24/7.

Several methods should be used to maximize exposure. Business brokers, social networks, web advertising as well as limited print advertising are often most effective. It is lack of exposure is perhaps the most common mistake made by sellers of businesses.

Failing to Provide Information to Potential Buyers

Withholding too much information on a business can also prevent a sale. Some sellers of business have a concern that competitors will find out information and will not provide much in the way to potential buyers to act upon. This can be quite counter-productive especially if it means that the seller loses nine out of ten of prospective buyers because there is inadequate information.

Poor Market Conditions

A recession or economic slowdown will often have an effect of putting a lot of businesses for sale simultaneously. Credit is also less available and this generally will affect both buyers and sellers of businesses. If anything, it can represent opportunity for those buyers that have plenty of cash. For sellers, it presents a real challenge, as there is no easy remedy.

Lack of Preparation for a Sale

In many cases, buyers will not proceed with a sale generally because sellers were not actually prepared for takeover. Systems, staffing, processes and financial records need to be in a state where a new owner can easily take over the running of the business. Lack of preparation can kill a deal.

Desired Price is Too Expensive
We would actually ranked price the least important factor. Mainly because it is often related to how well the seller of the business has optimised the sale of the business. Failure to optimise the business sale process will generally result in a lower price. Most business owners may think that their price is too high if the business did not sell yet it may have more to do with lack of exposure or preparation for the sale itself. Reducing price may actually be the wrong thing to do.

So if you are looking to sell your business don't think that it is only price that is important. There are several key mistakes to avoid that will greatly enhance your chance of success.

Cambodia Investment Surges for Korean Investors

2008-06-30T07:37:00.005+08:00

Korea is investing heavily in the future of Cambodia. According to figures by the Korea International Trade Association, investment in Cambodia showed a steep on-year growth of US$1.3 billion making Cambodia the second-biggest destination after China in terms of Korea's overseas investment. In particular, South Korean investment in Cambodia has increased sharply as Cambodia recorded high economic growth and achieved further political and social stability.

Beginning in the late 1990s, South Korean investors began to look at Cambodia as the country regained political and social stability. Recently, some South Korean investors who had invested in China and Vietnam have been moving into Cambodia. With this trend, South Korean investment in Cambodia has been diversified. Initially, South Korean investment was concentrated on the garment manufacturing sector but now banking, agro-industry, manufacturing, real estate development and IT sectors are the dominating fields of South Korean investment in Cambodia.

A great example of the investment optimism that is Cambodia today is Camko City. In March this year, South Korean company Yon Woo Inc., started building 42-story luxury condominium twin towers worth about US$250 million in central Phnom Penh. World City Co., of South Korea, is investing US$2 billion to build a “satellite” urban complex called Camko City on a 300-acre (121-hectare) area on the northwestern outskirts of Phnom Penh. The project, the single biggest foreign direct investment in Cambodia to date, is to include residential, commercial and public facilities, including villas, condominiums, trade and financial centers, office buildings, shopping centers, hotels, schools and hospitals The video below provides an overview of the Camko City development .

Cambodia looks to be the investment destination for Korean business and this will provide many opportunities for business in general as the country will continue to grow. Visit www.asiabusinessinvestor.com to check out or post business and investment opportunities in Cambodia today.

A Business for Sale in Asia, Selling Through the Internet

2008-06-29T21:41:00.009+08:00

Recently, one of the businesses listed on our website as a business for sale emailed us about their recent success in selling their business in the Philippines. We received an email from one of the children of the business owner we thought to share this experience with the wider community because there are some useful tips about finding buyers.

The owner of the trading business had started the company in 1976 and had developed it into a substantial family owned business specializing in home décor products. The business had fairly done well over the years and the owner had decided that they would like to see what potential buyers may be prepared to pay for the business itself. A business sale would only be considered if the price was right. The owner did not wish to engage a business broker initially as they were not yet sure that they would proceed with any sale. Instead, they chose to place an advertisement in the paper in the classified section to gauge the response. The advertisement was placed for three consecutive days in a major newspaper without providing too many specific details. After placing the advertisement, there was not even a single reply so the owner was prepared to forget the idea. One of the family mentioned posting an advertisement on the internet as this was a new option that had to be at least considered.

So with that in mind an advertisement was placed on our website www.asiabusinessinvestor.com. Within three weeks they had received two serious enquires, one from an investor in the UK and the other from China. It turns out that both interested parties were interested in making an attractive offer for the business. The Chinese investor was looking at expanding in the Philippines and the UK investor was looking on behalf of a syndicate of investors. Both potential parties made offers to the company for substantially more than they would have expected from local business investors. At the end of the day the sale occurred to the Chinese buyer as the payment and earnout terms were the most attractive.

A key lesson of selling a business here is to maximize the number of potential buyers. Traditional newspaper advertisements only showcase an advertisement for a limited period usually a single day. It is unlikely that most serious qualified buyers of a business are going to be reading the newspaper on that day and to place and advertisement in the paper over a series of weeks will cost hundreds if not thousands of dollars. Newspaper advertisements also limit the list of potential buyers from other towns or other countries and in this day and age, buyers are often international themselves. A sound strategy should be to consider both newspaper and internet advertising.

The success that this story represents demonstrates the power of the internet itself in connecting business people in general. It has been a great vote of confidence in the future of business for sale listings in Asia with the internet. A Business for sale is all about finding the most qualified buyers and the web is a valuable instrument to make that a success.

Austrade: Australia's Trade and Investment Promotion Agency

2008-06-29T17:49:00.009+08:00

Austrade or the Australian Trade Commission is a government agency tasked with promoting trade and investment with Australia. For those Australian companies looking to trade or invest in Asia and the MiddleEast it has been traditionally been a place where information can be obtained. For companies or individuals looking at investing in Australia it is sometimes used as a resource. They have a website www.austrade.com that provides some general information for both investors in Australia and Australian exporters and investors in international markets.

The website itself provides quite limited information on specific investment and business opportunities. and it is clear that to take full advantage of the services an appointment most probably be necessary. Some of the more developed trade sourcing websites of which there are many, clearly provide a easier approach for specific trade leads. For investment, our own AsiaBusinessInvestor.com actually has a more accessible list of investment opportunities that the Austrade one. Nevertheless, Austrade is providing a consultative service which is quite valuable to specific exporters or investors.

Whilst a personal service is great, one thing often remarked is that it is actually difficult for small and medium-sized businesses to obtain specific time with an Austrade representative. Not unsurprisingly, government agencies like Austrade are faced with quite a workload of small, medium and large businesses all looking at appointments with individual consultants. As with almost all the various government trade and investment agencies with limited resources, most just focus on big business and often never respond to small business. They want to facilitate trade deals in the hundreds of millions and billions. When is comes to small and medium sized business, there is less available in terms of support and it requires simply more effort and legwork on behalf of those businesses themselves.

Many of the Austrade events listed on their website are very useful in providing an opportunity to connect with each other and these are structured around major business events for particular industries. We would always recommend such events and if you are looking at potentially attending some of these events then a good resource is ConferenceBay.com. This website allows you you can pick-up significant discounts (as much as 50%) for many Austrade recommended industry events. Worth keeping in mind if you are on a budget.

Austrade also have a business program called Business Club Australia which is a free membership-based business matching program that can help create international business opportunities against the backdrop of major sporting events. Using sporting events such as the Commonwealth Games, FINA World Swimming Championships and Rugby World Cup business events have been used for networking. In many respects, Australian's love of sport is a key way to connect companies doing business in Asia. The next Business Club Australia meet is the Beijing Olympics and details are available here. No doubt if you have the time and are planning to go to Beijing, it looks worthwhile. It is a pity that these events are so infrequent.

For most small and medium-sized businesses and investors, perhaps the best thing to remember about Austrade is that whilst the services can be beneficial it has limited resources. Consider working with small business consultants, go to industry events and make the maximum use of the internet as these are going to provide greater return on investment than relying on any government agency to facilitate business.

More Economic Liberalization Ahead for Vietnam's Property Investors

2008-06-29T11:04:00.007+08:00

Speaking recently at Real Estate Investment World Asia 2008 (26-28th June 2008), Vietnam's Ambassodor Nguyen Trang Thanh has indicated that there is a more for more reforms to improve investment prospects into Vietnam's property market.

“Vietnam will make it much easier for business and investment by ensuring market rules are fully in line with demands of international economic integration and internationally-accepted practices and rules.

“We know there must be greater transparency, openness and equal opportunities for all economic sectors to be on competitive ground to participate actively and efficiently in the market.

“We’re now diversifying real estate products developed [into] houses for rent, offices and business space.

Appropriate measures will be taken to boost demand for low-income housing customers and enhance competitiveness in the domestic real estate market as compared to other markets in the region to make it more attractive to investors.

“The government, from the central down to local levels, will improve planning in land use and real estate development.

“There’ll be additional reforms in the land financing policy."

Given Vietnam's overheating property market, these reforms will make foreign investment easier and hint of much needed reforms to land financing itself. Real estate investors should take particular attention to these reforms as continued opening of Vietnam's property market should present many opportunities to the astute investor.

Beating an Investor Path to the New Mongolia

2008-06-21T17:24:00.014+08:00

Everyone is beating a path to Mongolia: the resources-hungry neighbours and former colonisers to the north and south, Russia and China, and the greatest global mining houses. There is uranium, gold, silver and especially copper and coal in vast quantities. In the southern part of the Gobi Desert, handily near the Chinese border, are two sensational deposits. They are Oyu Tolgoi, with a preliminary capacity to produce 400,000 tonnes of copper and 330,000 ounces of gold a year for 40 years, and Tavan Tolgoi, containing at least six billion tonnes of coal including 1.8million tonnes of high-grade coking coal for steel making.

Put simply, Mongolia is benefiting from the global commodity boom that has countries the world over scouring the earth for mineral resources. The billboards alongside Mongolia's pot-holed roads promote filters, pumps, diggers and drills, interspersed with ads for new series BMWs and Mercedes-Benz cars.

Economic growth, largely on the back of prospecting and mining, which provides 70 per cent of all government revenue, was up 7.5 per cent in 2007 and is at a sizzling 9.9% per cent in 2008.

After the Soviet downfall, Mongolia became an international model of pioneering liberalism for a time. The government gave back to its citizens most of the hundreds of companies inherited from the Soviet days, via vouchers they could redeem for company shares or for sheep and goats that had been unhappily collectivised. Half the population remains nomadic herders who live in circular tents knowns as gers, many of which contain satellite television sets powered by solar panels. The other half live in Ulan Bator, the coldest capital in the world during winter - mostly in Soviet-built flats, warmed centrally by a vast underground network of pipes.

The boom in Mongolia rolls on. 2007 was an extraordinary year of capital appreciation and rising prices – and the smart money is betting that 2008 may be just as spectacular.

Mongolia may seem an unlikely property investment destination, but the remote land-locked country is in the middle of a mining boom, with enormously rich mineral resources of copper, coal, and gold. This has brought in mining companies such as BHP, Rio Tinto, Ivanhoe, and Centerra Gold, as well as a large foreign diplomatic and commercial presence.

There is a severe shortage of quality housing. Ulan Bator is a Soviet-era city, ugly, badly planned. Accommodation is badly maintained, unattractive, and unsafe, and it is hard to convince expatriates to work in Ulan Bator. This has provided an opportunity for a few companies which are building modern high-quality condominium buildings.

Foreigners can freely own property in Mongolia through the Immoveable Property Ownership Certificate, which is equivalent to freehold ownership. Rising demand for accommodation from foreign experts and an extreme shortage of housing have generated very high yields. In Ulan Bator, rental income returns (yields) on high-end property are around 18%.

Prices have been rising rapidly due to rising demand. Capital appreciation has been around 15% per annum in the past three years, according to Mongolian Properties, a development company. Mongolia has low personal taxes, much tax avoidance.

Mongolia adopted a flat tax regime in January, 2007. Personal income taxes on income, including revenue from property, are imposed at the flat rate of 10% on net income over MNT 84,000 ($72). Deductions are permissible. In terms of capital gains are taxed in the same way as income. The round-trip costs of buying and selling a property are around 5.7%, including legal fees and the agent’s commission (together 3.5%) and resale tax (2%).

"It appears to be a win-win situation," says London-based investment banker, Wesley Davis, 40, who has bought a three-bedroom apartment in The Regency Residence, the largest (14-storey), off-plan residential development to be built in Ulaan Baatar. "You invest around £50,000 for a new property in a country where the economy is growing at a rate of about 8 per cent and have a year-round rental income."

That potential is evident in Mongolia's booming tourism market. In 2007, the country had 500,000 visitors; it expects more than 700,000 in 2008. While most tourists are Chinese, escaping the polluted streets of Beijing for the clean air of Ulaan Baatar, there are increasing numbers visiting from Europe and North Africa. "This is evidence of how Mongolia's profile is increasing on the world stage," says Mr Eatock. "People are coming to realise that it is a safe, stable democracy that has a lot more to offer than kilometres of remote Gobi desert."

Ulaan Baatar, with its wide squares, parks and historic buildings, is the centre of Mongolian urban life. But most tourists head straight out to the windswept steppes for outdoor pursuits such as white water rafting, dog-sledding, helicopter trips, camel-riding, horse-riding and fishing for taimen - giant (2-3 metre) prehistoric salmon.

There is also much anticipation for the 2008 Beijing Olympics, which are expected to give another huge boost to Mongolia's tourism industry, with Beijing less than an hour's flight away.

The government is keen to expand its property market and is adopting a no-holds-barred approach to the buying process. All properties in Mongolia's capital, including apartments, are sold as freehold. There are no restrictions on foreign buyers, no capital gains or income taxes and no restrictions on the repatriation of capital.

We expect to see a lot more investment opportunities from Mongolia as the economy benefits from resource rich China has an insatiable demand for Mongolia's treasure trove of resources. Visit AsiaBusinessInvestor.com to review some of the existing business and investment opportunities in Mongolia today.

Asia Business for Sale: 10 Key Steps to Prepare to Sell Your Business in Asia

2008-06-12T17:14:00.007+08:00

If you are thinking about selling your business in Asia you should take the time to prepare to ensure that you achieve the best results possible. Selling your business can take up to 12 months but some basic steps can improve your end result significantly.

Obtain a Business Valuation. One of the first things you should do is obtain a realistic idea of what your business is worth from an objective, outside source. A professional valuation will give you a basis for gauging buyer offers and will give you an idea of what you can expect to net from the sale. It will also tell you your business's market position, financial situation, strengths and weaknesses (which you can hopefully correct prior to putting it on the market).Valuations can be obtained from a number of sources, ranging from local accounting firms to regional business brokers and investment banking firms. As a rule, you should make sure the company performing your valuation has access to the most current national data regarding privately held transactions in your industry. Experience in selling firms of your type is obviously helpful as well.

Get Your Books in Order. Buyers evaluating your business generally require at least three years' worth of financial information. The more formal your statements (accountant-reviewed or -prepared vs. internally generated statements), the better the impression you' will make-and the easier the due diligence for a buyer.

Understand the True Profitability of Your Business. Most privately held businesses claim a variety of non-operational expenses. Make sure you have supporting documentation for these expenses. For example, your business may be paying for your personal automobile lease. In addition, there may be infrequent expenses you have incurred during the past three years that should be excluded in a buyer's analysis of recurring cash flow. There may be moving expenses if you've moved to a larger facility or unusual legal expenses.

Consult Your Financial Advisor. It's wise to speak to your financial advisor for help planning your financial future. Understanding your personal and corporate tax situation may also help you recognize your options with regard to deal structure.

Make a Good First Impression. Will a buyer visiting your business for the first time see order or chaos? Buyers look for companies that show well, as an orderly business is often indicative of an orderly management team and back-room operations.

Organize Your Legal Paperwork. Review your incorporation papers, permits, licensing agreements, leases, customer and vendor contracts, etc. Make sure you have them readily available, current and in order.

Consider Management Succession. If you're absolutely vital to your business, who will a buyer be able to turn to for help running the business after you leave? You should have a succession plan in place before going to market.

Know Your Reason for Selling. Buyers are always curious as to why a seller wants to exit a business. (If it's so great, why are you leaving?) Be prepared to articulate your reasons.

Put Your Advisory Team in Place. Start interviewing lawyers, and accountants who are proficient in mergers and acquisitions. Strongly consider hiring an intermediary, either a business broker or an investment banker, to represent you and help you through the selling process.

Keep Your Eye on the Ball. Don't let your business performance decline because you're too focused on the sale of your business. This will only give buyers additional negotiating power to lower their offers.

Seminars on Buying or Selling a Business in Hong Kong

2008-06-10T20:46:00.006+08:00

If you are buying a business in Hong Kong or selling one there are some events that are run regulary that may be of interest.

One of the business brokers in Hong Kong is running regular seminars for those people wishing to find out more about buying or selling a business. Hong Kong Business Intermediary Co. Ltd. (HKBI) is a Hong Kong business broker that conducts a number of seminars for small business owners.

Seminars include:

Buying a restaurant;
Selling a restaurant;
Buying a retail shop;
Buying an education centre;
Buy a Biz: Be a Boss.

We would have to declare that we have no link with HKBI nor have attended the seminar. However, it you are in Hong Kong (and you do speak Cantonese) these do look like very useful seminars for those considering buying or selling a business.

Angel Investors in Asia

2008-06-09T13:59:00.007+08:00

Angel investment in Asia is a significant source of capital raising for businesses. Investments by private high nett worth individuals represent a very high proportion of capital raising in Asia especially for early stage investment.

In many respects, it has been a traditional way of doing business in the region. For many centuries, Arab and Chinese traders were financed by wealthly merchants and guilds to take risks in establishing new trade routes and business across all of Asia and the Middle east. These networks of trade and finance were the foundation of business in Asia. Thesedays, it is a matter of very informal networking of friends, relatives and close associates that is a major source of small and medium scale investor funding.

Formal angel investment clubs of the style we see in Europe and the United States are not the norm in Asia. Angel investment clubs and associations are present in only a few countries in Asia. The networking side of business in much less formalised and this actually does create more of a challenge for entrepreneurs to raise capital in Asia. This is especially the case for new types of business which are appearing in Asia where the support network is less established. It is quite common to see entrepreneurs seeking funding travelling to Singapore from places such such as Vietnam, Thailand and from Bahrain, Pakistan and Saudi Arabia to Dubai to meet angel investors.

In Dubai, there is the Arab Business Angels Network (ABAN) which is to provide early stage seed funding for businesses to develop in the MiddleEast and North Africa. In Singapore, there is the Business Angels Network SouthEast Asia (BANSEA) Both are highly recommended for those entrepreneurs seeking to raise capital for early stage investments.

If you are seeking funding, then you need to ensure that you are prepared with your investor presentation. Angel investor associations in Asia have demanding criteria for entrepreneurs that require submission of business plans prior to having any opportunity to present in front of potential investors.

As always, professional advice is recommended and there are workshops provided to entrepreneurs in Singapore and Dubai to assist those if making a better investment presentation. If you are seeking to raise capital through angel investor associations then invest the time and resources to meet with angel investors is worth the effort, even if you may not obtain finance the process can certainly improve your business plan.

Papua New Guinea Agribusiness Investment Opportunities

2008-06-05T16:39:00.010+08:00

Papua New Guinea is an investment destination that is increasingly gaining attention from those looking for business opportunities in Asia. Rich in resources specifically mining, fisheries and agriculture, the economy has been performing strongly mainly due to the high demand for commodities. One of the areas that does show potential is agriculture.

The driving force behind commercial agriculture in Papua New Guinea has always been the export crops namely coffee, cocoa, coconut (copra), oil palm and kernels. Other export commodities include tea, cardamom, rubber, chillies and pyrethrum as well as the great number of varieties of tropical fruits and vegetables. There is considerable potential for expansion and development of many more crops for export, including the export of fresh fruit and vegetables and processed or downstream products.

Specific investment opportunities dwell in coffee, oil palm, cocoa, coconut/copra and all spice crops. The government of PNG has made some special incentives for those interested in agribusiness projects with a special tax rate of 20 per cent for agribusiness projects and tax breaks.

One of the recent sucess stories is palm oil. Several key investors have developed projects in parts of PNG that have been well suited for palm oil. With significant land available for production and a high palm oil price, producers such as New Britain Palm Oil Limited have done well in PNG. The company is currently listed on the London Stock Exchange and it is PNG's largest palm oil producer.

Other significant investment opportunities remain in PNG, but agribusiness certainly is a promising sector for astute investors.

Key Questions to Ask When Looking at a Business for Sale in Asia

2008-06-04T22:57:00.005+08:00

If you are looking at business for sale in Asia and think that the venture sounds interesting, then there are a series of key questions that you as the buyer should ask. This will make it easier to buy a business that meets your expectations. Likewise, if you are selling your business in Asia, then you should prepare answers for these questions as this will improve the chances of a successful business sale.

The first step prior to any 'detailed' exchange of information should be the preparation of a non-disclosure agreement. Your lawyer should assist you to prepare such an agreement that should ensure that both parties meet their obligations in terms of confidentiality. We would recommend that this is agreed fairly early in the process and this safeguards the seller of the business from potential competitors using the business sale for information gathering purposes.

Once, the non-disclosure agreement is in place we recommend the following questions be asked:

Why are you selling your business?
How many years have you been in business?
How many years have you been in business at the present location?
Did you create the business or did you buy it from someone else?
What is the legal structure of your business?
Do you have tax returns and financial statements that my accountant can look at?
Which bank do you do business with?
What types of insurance must your business carry?
What licenses are necessary to own and/or run this business?
How many hours did you work per week in your business?
How many employees do you have?
Do family members work in your business?
Will the family members stay after the sale?
Do you want be paid in installments or in full?
Will you stay and work for a while after the business is sold?
Do you have any long-term contracts or obligations to third-parties with the business?

Your accountant and lawyer can assist you with the questions themselves. The questions are critical whether you are looking at businesses for sale in Hong Kong or a business for sale in Indonesia or Saudi Arabia for that matter.

Vietnam: Top Destination for Retail Investment & Franchising

2008-06-04T09:25:00.010+08:00

Vietnam has moved into first place as the most attractive emerging market destination for retail investment according to global management consulting firm A.T. Kearney and will be a global hotspot for franchsing in 2009.

In the Global Retail Development Index (GDRI), a study of retail investment attractiveness carried out among 30 emerging markets, Vietnam moved up to replace India as the most attractive retail destination. "The critical factors that have powered Vietnam to the top of the index this year are rapidly growing per capita income of the Vietnamese consumer and drastically opening up of regulations for new entry. Now is the “perfect time” to get involved in Vietnam’s retail market, said Mike Moriarty, a partner with A.T. Kearney and co-leader of the GRDI.

While Vietnam 's 20-billion USD retail market pales in comparison to India or China, the absence of competition and 8 percent GDP growth make it an attractive expansion opportunity for global retailers, the study said. Moreover, Vietnamese consumers are among the youngest in Asia, with 79 million below the age of 65, and increased their consumer spending by more than 75 percent between 2000 and 2007, the firm added.

Given the excellent prospects for retailing in Vietnam, franchising holds very high promise. This is especially the case due to reforms in franchising laws that allow foreign entrants in early 2009. Before the reforms of commercial law, a franchise was regarded as a type of technology transfer or licensing agreement and was governed by Decree No 45/CP/1998. The decree tended to have a freezing effect on the establishment of franchises, imposing a maximum royalty of 5% of net sales such that parties to franchise agreements were not free to agree a higher rate of return. Lack of confidence in IP rights protection in Vietnam also contributed to the concerns of foreign franchisors.

With the new commercial legal reforms Vietnam has developed a legal foundation for all aspects of franchising. The legal framework in conjunction with the strong economic performance make Vietnam a priority market for franchisers.

Published since 2001, the GRDI assesses the retail expansion attractiveness of emerging countries based on a set of 25 variables including economic and political risk, retail market attractiveness and retail saturation levels. The other top-10 countries are Russia, China, Egypt, Morocco, Saudi Arabia, Chile, Brazil, Turkey, Mexico and Algeria.

Investment Opportunities in Kazakhstan: Central Asia's Boom Economy

2008-06-03T12:57:00.011+08:00

Thinking about new investment destinations in Asia? What about the Republic of Kazakhstan?

Kazakhstan, located between the borders of Russia and China in Central Asia, is size of the whole of Western Europe and four times the size of Texas.

It currently has double the oil reserves of the the North Sea with over 35 billion barrels and by 2015 the current projections are for oil reserves of more than 100 billion barrels. For any economy this is a pretty good situation considering the oil price has been hovering at US$135 a barrel and will probably go higher. Besides oil, it has the world's largest reserves of barite, lead, tungsten, and uranium; second largest reserves of chromite, silver, and zinc; third largest of manganese, significant deposits of copper, gold, and iron ore. Rich in natural resources, Kazakhstan has become a popular destination for the oil and mining industry since it emerged from independence from the Soviet Union.

Besides resources, there would appear to be significant tourism potential in Kazakhstan as a travel destination. Currently tourism accounts for 5% of the country's GDP and is continuing to grow mainly driven by the strong growth in international business travellers working on the significant oil and gas projects. Positioned on the historical Silk Trade route between Europe and Asia, it offers historical monuments as well as diverse landscapes, mountains, rivers and lakes. Bird watching, fishing, hunting and trekking and beach holidays on the Caspian Sea are on offer. Opportunities for tourism remain positive and Kazakstan's enterprising entrepreneurs should be quick to showcase development opportunities for the global tourism market.

One of the interesting facts about Kazakhstan is that it is where apples originate. In fact, the commercial centre of Kazakhstan, Almaty, means "Rich with Apples" in the local language. Agriculture is a significant contributor to the economy and it accounts for more than 20% of GDP. Agribusiness featuring grain and livestock production in the north and fruit and vegatable production in the south is another promising sector. Privatization and productivity improvements provide opportunities for astute investors to develop profitable operations.

The one thing clear about Kazakhstan is that it is rich in resources and tourism potential. The next few years will present many business opportunities in this dynamic market especially for those willing to go beyond the traditional investment destinations.

Business Opportunities in Dubai

2008-05-30T12:32:00.010+08:00

Business is booming in Dubai and it is the place to be at the moment for many of Asia's entrepreneurs.

In Dubai, all you can see are the signs of construction cranes and property development. The pace of development is truely phenonenal as the combination of a pro-business environment a high oil price lay the foundations for a flourishing economy.

The UAE population has grown 7.7 fold since 1975 to 4.3 million. This growth rate of 5.6 per cent is one of the highest in the world with 79 per cent of the population being expatriates. Every day up to 857 people are moving to the Emirate state, totalling some 5,000 per week. These figures are astounding!

Real estate projects in Dubai will touch $230 billion out of a total of $310 billion in development projects in the emirate over the next decade. That is a huge amount of investment by any measure. At present there are more than 47 shopping malls open or under construction, presenting a great number of retail business opportunities including franchising in Dubai.

The growth of Dubai presents excellent business opportunities for aspiring entrepreneurs. Many businesses located in Dubai talk about the problem that they are having in just meeting demand being generated from the vibrant business economy. That is something US based entrepreneurs should consider at the moment, where there is a definite economic slowdown.

We recommend that you view this YouTube video below about Dubai from an American entrepreneur, Bruce Fenton on "Dubai, The World's Fastest Growing City". It provides a great overview of Dubai's boom.

If you would like to view some of the business and franchise opportunities in Dubai or businesses seeking investment in Dubai visit our website to view the listings or listen to our interview with one of Dubai's ad agency entrepreneurs here.

Business Brokers in Singapore and Malaysia

2008-05-29T09:03:00.017+08:00

For those people looking at selling their business in Singapore or Malaysia one of the ways to potentially consider is to use a business broker. Business brokers in Singapore and Malaysia should not be confused with real estate or property agents. A business broker is specialized in the sale of businesses and the best ones are accredited to the International Business Brokers Association. The IBBA is the world's largest association of business brokers that is a non-profit association that operates for the benefit of more than 1,800 business brokerages across the globe.

The cost associated with using a business broker generally ranges from 10-15% of the final sales price which is significant. If you are to work with a business broker in Singapore and Malaysia then you should ensure that they have a good reputation for successfully completing sales of a business. A good business broker will earn their commission due to their level of professionalism and negotiation skills. Many business brokers in Singapore and Malaysia are listing businesses for sale on this website and then following through with the negotiations on behalf of sellers.

If you cannot find a business broker then you should work closely with your accountant or trusted business advisor. This can be an option if you are more comfortable using this approach.

Singapore and Malaysia are significant economies by themselves and there are an enormous number of people searching for business opportunities in these markets. There are more options than ever before to buy or sell a business. The main thing is to work with professional advisors be they accountants, lawyers or brokers as the services that they provide can be invaluable to Asia' small and medium-sized entrepreneurs.

How To Attract Investors in Asia

2008-05-28T09:29:00.003+08:00

How do I attract investors in Asia? That's a question asked by many of Asia’s entrepreneurs. Finding investors for business in Asia is tough, but it's not impossible. If you need outside investment money to start and successfully run your business or expand your existing business in Asia, you should read this article.

Investment is a key element of growth for all types of businesses, large and small. But acquiring investors can sometimes seem like an insurmountable task, leaving business owners with the idea that they will have to rely solely on their friends and family members to invest in their company.

The fact is that there are plenty of people who are willing to invest in your business, but only if they have a reasonable expectation that they will receive a return on their investment. Your job is to convince them that they will receive a return by laying a solid foundation for investment. The process of finding investors in Asia can be greatly enhanced by following the guidelines listed below.

Make Sure You Have a Business Plan

First and foremost, investors want to know that you have a plan for your business. A make-it-up-as-you-go approach simply will not be enough in many cases. A good business plan is a well-researched roadmap that spells out the goals and strategies that will be required to achieve real growth. It should also include information about your competition and market research that indicates how effective your strategies will be in the marketplace.

Investor Agreements

You should also be prepared to present potential investors with a written agreement dictating the terms of their investment and an exit strategy detailing the process for divestment.

A written investor agreement accomplishes several things. It communicates to investors that you are serious about investment and indicates that you have taken steps to prepare for it. An investor agreement also boosts investor confidence because it clearly spells out what will be expected of them should they decide to invest in your business as well as legal security for their investment. At the same time, it safeguards your rights and responsibilities by providing you with a documented agreement regarding the scope of the investment relationship.

Demonstrate a Track Record of Growth

One of the most important things you can do to attract potential investors to your business is to demonstrate a track record of growth. Investors like to invest in companies that have a proven ability to achieve bottom line growth. You need to be able to show investors that you are able to consistently set and meet your goals.

Healthy Financial Statements

Along with a track record of growth, investors will also want to see financial statements that correspond with the goals and strategies laid out in the business plan. If the numbers indicate that your company is in the midst of a financial crisis or if they don't back up the expectations you have communicated to them, investors will be reluctant to commit. It's not a bad idea to go over your financial statements with your accountant before you approach potential investors. In some cases, you might be able to take steps to make your financials more attractive for investment.

Communicate As Widely as Possible

Your success in raising money will also be influenced by the extent to which you can communicate. This does not mean that you should talk about your need for an investor to everyone. It means that you need to communicate to qualified prospects, that are also in the mode of looking for their next investment opportunity. Odds are that the investor that you need is not going to be one of your immediate friends and associates. You should try different avenues depending on your industry and the level of investment required.

You can improve your odds by listing on AsiaBusinessInvestor.com as the site is popular with investors as it allows them to easily view the various investment opportunities in the region.

Six Reasons to Consider Investing in Property or Buying a Business in Thailand

2008-05-27T16:27:00.002+08:00

Fancy buying a condo or holiday villa in Phuket? Or buying a business in one of Thailand great tourist areas? For many, Thailand offers and exciting option for investment and lifestyle change.

Here are six popular reasons why Thailand is such a popular tourist investment location.

It is a world renowned tourist destination with attractive investment opportunities in the key tourist areas of Phuket, Koh Samui, Changmai.

It has a tropical climate and beautiful beaches, mountains areas and cities teeming with culture that attract holidaymakers from across the globe

Thailand has good flight connections and is one of the cheapest places to fly to in Asia providing a strong case for continued growth of the Thai tourist economy.

Business owners that operate in Thailand’s famous tourist havens can enjoy a superb quality lifestyle that would be the envy of others.

Property investors who bought post 1999 have witnessed impressive capital growth, particularly in major cities. The rental potential is significant, due to luring growing numbers of tourists and generally positive economic fundamentals.

There is no capital gains tax for private investors and low ongoing taxes.

For further information on many of the investment opportunities and businesses for sale in Thailand visit our main website.

New Frontiers of Investment: Timor Leste (East Timor)

2008-05-24T11:17:00.006+08:00

This week we had the opportunity to meet the President of Asia's newest nation, Timor Leste (East Timor) at the Singapore Foreign Correspondent's Association Annual Gala Dinner in Singapore. Dr Jose Ramos Horta was a co-recipient of the 1996 Nobel Peace Prize and is President of this small nation.

The country with a population of only 900,000 is one of Asia's poorest, emerging into nationhood only in May 20th 2002 after a period of occupation by Indonesia. In terms of nation forming, the government is very pro-business and is looking at making rather exceptional incentives for businesses to invest in the country. The economic credentials seem to be off to a sound start due to fiscal responsibility that is not the case in other developing nations.

East Timor has untapped resources for agriculture, fisheries and tourism. It is also has world class diving and flights linking the country to Singapore (soon to be operating), Indonesia and Darwin will significantly open the market for tourism.

Fortunately, the presence of significant oil and gas revenues has laid a strong foundation for nation building. Significant investments from oil revenues are to be made in infrastructure such as roads and utilities. The presence of strong international support from Australia, Brazil, Portugal, Singapore, the Philippines and Kuwait as well as the World Bank, IMF and the UN. The government of Timor Leste is talking the language of pro-business economic development. They are proposing to reduce taxes to a level one would expect from places such as Dubai by having a tax free state! Could this potentially create a little Dubai in South East Asia? Certainly, this is something of interest to Asia's business community.

Given these incentives, Asia's entrepreneurs should explore business and investment opportunities. Some of the more immediate projects will be related to agriculture potentially coffee, palm oil and vanilla production just to mention a few. Palm oil or biofuel may be very interest projects to explore there. In terms of tourism, there would appear to be quite a few very interesting opportunities. To see more about the tourism in Timor Leste visit www.turismotimorleste.com

Shortly, we will be listing investment and business opportunites from Timor Leste on the main Asia Business Investor Website.

It looks like the world's newest nation is going in the right direction.

Selling a Family Business in Asia

2008-05-23T16:15:00.008+08:00

The majority small and medium-sized business in Asia are family owned.

At some time in the lifetime of a business, the issue may arise of whether best option may be to sell the business. This may be the case in some instances, where family members no longer have a direct interest in continuing the family business that has been in family hands for a generation or more. Children may wish to pursue different interests, be they professional careers or a different business path altogether. One of the options worth considering is whether selling the family business may be in the best interests of all concerned, especially if it aligns with the interest of the children and those that have invested their hard work over the years to see a windfall gain for the whole family.

Common pitfalls for the family business owner who is considering selling the business include several of the following:

Improper pricing of the business;

The failure to show the company to the greatest number of qualified buyers;

The inability to address the information needs and concerns of buyers;

Lastly the failure to deal with the emotional issues involved with the sale of the business.

The most common approach in most of Asia, is to ask friends and family for an idea of what the business is worth and look at potential sale to a range of contacts of friends and family. This is one approach, but it does create a multitude of problems, often leading to a result where the sale does not meet the expectations of all concerned.

Given the large number of businesses for sale in Asia, instead of trying to sell the business to a range of friends and family contacts, the business should be valued by a professional and secondly advertised as widely as possible in places such as www.asiabusinessinvestor.com where potential buyers can look at opportunities 24hrs a day over a period of weeks or months as the buying cycle is weeks and months. A business broker should be engaged if the business seller would like a professional to handle the issue.

In Singapore and Malaysia especially, there are a very large number of small family owned businesses that are for sale as families change with the generations. Whether it is a small grocery store or a large manufacturing business there is a time to sell a business and it is essential to do it well both for the business itself and most importantly for the family.

The Asian Franchising Boom

2008-05-23T12:56:00.008+08:00

Asia is undergoing a terrific boom in franchising.

The rise of the middle class in Asia and the growth of China and India has delivered more opportunities for franchising than ever in history. Consumer demand remains high for franchise offerings across Asia especially in high growth markets. The market is very receptive to franchises especially in conjunction with the boom in retail projects in Asia as well.

Here are just three key reasons to consider buying a franchise in Asia:

Lower Your Risk with a Proven Business System
It's a lot easier than starting a business from scratch. There are many complex factors involved in any small business and franchise systems provide the know-how and support for the business owner. In a 2001 survey conducted in Singapore, by the Singapore International Franchise Association, nine out of ten businesses which have franchised their operations have become more profitable. Systems alone can provide a solid basis for increased profitability which is a strong reason to consider franchising in Asia.

Asia's Consumer's Prefer Franchises
The evidence is tending to demonstrate that the retail boom in Asia has been very much a boom for franchises. The very high representation of local franchises in the Philippines, Malaysia, Korea and China to cater for consumer preferences demonstrates that there has been strong demand for franchises across the region.

The Economics
The solid economic growth in Asia represents a great opportunity for franchisers. The increase in the purchasing power of the Middle Class represents the underlying driver of franchise growth. As each economy develops, consumer demand will remain strong and franchisers will need to go where the market is going.

As always, it is a matter of choosing the right franchise. Review the listings at AsiaBusinessInvestor.com and see what is on offer.

In October this year the annual www.franchiselicenseasia.com will be on in Singapore from the 16th to the 18th of October. This event provides and opportunity to meet the various franchisers over the major event itself. It's worth going if you can make the effort.

We shall be providing some podcasts shortly with various franchisers in Asia and franchise consultants so stay tuned to listen to so interviews we will be doing on franchising in Asia.

Asia's Business Brokers

2008-05-22T21:20:00.004+08:00

If you are a business broker in Asia we would like to hear from you. We are in the process of compiling a comprehensive list of business brokers in Asia, from Egypt through to the Pacific.

At AsiaBusinessInvestor.com we are receiving a high number of requests for information about business brokers. Our website provides a listing service to connect entrepreneurs in Asia for those looking at buying or selling a business, franchising, investment partners or general business opportunities. Besides listing opportunities, we do not provide additional services that are typically provided by a full-service business broker.

Pros & Cons of Business Brokers in Asia

2008-05-22T09:54:00.004+08:00

Are business brokers in Asia worth the fees they charge? If you are buying a business or selling a business, chances are you may be dealing with business brokers. Many buyers and sellers of businesses will use a business broker to assist with the business-for-sale transaction, and there are many good reasons why that's the case.

In simple terms, business brokers act as middlemen between business buyers and sellers. But they offer much more than that.
If you are buying a business or selling a business, it helps to understand the role of business brokers in the process. Here are some of the pros and cons of using a business broker.

Advantages of Using a Business Broker

Assistance in Valuing a Business. Business brokers have extensive knowledge of what businesses are worth and can usually derive a business value that is fairly accurate. Without a business broker, it is tough for sellers to accurately place a realistic valuation on their business.

Help in Presenting the Business. Business brokers are adept at packaging up a business to show it in its best light. Without a business broker, a seller may not be able to market their business in a way that is attractive to buyers.

Confidentiality. Business brokers work in a confidential manner, keeping the sale of the business in confidence so that competitors, employees, suppliers and others are not informed that the business is for sale.

Experience in Evaluating Buyer Intent. Business brokers are able to quickly ascertain whether a potential business buyer is serious or wasting valuable time. In contrast, a seller who is not using a business broker may invest considerable time in courting a potential buyer who turns out not to be serious or qualified.

Ability to Convert Interest in Buying a Business into an Actual Sale. Business brokers know how to create competition among potential business buyers in a way that moves the sale of a business along. When sellers make an offer, the business broker can interpret the offer and even suggest changes to an offer that will make it more likely that the business sale will occur.

Service as an Intermediary. Buyers and sellers generally don't trust each other. The business broker can serve as a middleman to interpret communications and lead the buyer and seller towards compromises whenever possible.

Expertise in Business-for-Sale Transactions. Finally, the business broker knows all the minutiae required to close a business sale transaction. Typically, a buyer and seller may not understand all the nuances of getting the deal to closure, so it's good to have an experienced business broker involved who can facilitate the process.

Disadvantages of Using a Business Broker

One-Sided Interests. Remember that the business broker usually represents the seller. If you are a business buyer, the broker's interests will not be aligned with your interests. While most brokers are very helpful to buyers, buyers must keep in mind that the broker is not on the buyer's side.

The Broker Fee. Brokers will typically take 6-15% of the total business selling price as their commission. That's a hefty take, so many sellers may want to consider doing a FSBO (For Sale By Owner) sale and see whether they can sell their company without the assistance of a business broker.

Varying Levels of Competency. Finding a good business broker can be a challenge. The field is largely unregulated so, in some cases, individuals with little experience or expertise can hang up their shingle and declare themselves to be business brokers. Be careful. If you engage an incompetent business broker, it can be a complete disaster.

Incentive to Sell at Low Prices. A business broker gets paid when there is a sale, so they sometimes will underprice a business to sell it quickly. For business brokers, the difference between selling a business for $500,000 versus $600,000 is only 6% of $100,000 – or $6,000. For the seller, it's a $94,000 difference. By selling for $500,000, the broker walks away with $30,000, which he may be more than happy to do – even if it's at the expense of the seller.

In Asia, you need to ensure that you are actually dealing with a qualified business broker that you can trust. Do you homework and make sure that the business broker you decide to work with has the experience and reputation. We will shortly be listing business brokers on the main AsiaBusinessInvestor.com website. This will be a searchable directory of business brokers from China, through to Vietnam, India and UAE.

Who to Listen to When Buying a Business in Asia?

2008-05-22T08:40:00.005+08:00

When buying a business in Asia you are likely to find yourself inundated with advice from well meaning friends, family, neighbors – everyone is an expert and everyone has an opinion.

Who should you listen to when it comes time to make a decision that is going to be so fundamental as to how you spend your next few years? Perhaps it is necessary to rephrase the question to “Who should you not listen to?”

The process of buying a business can be slow, much time and energy will be exhausted in sourcing and researching suitable propositions. Whether you are looking at businesses for sale in Singapore or a business for sale in Thailand or Dubai the process takes time.

At AsiaBusinessInvestor.com we have a growing list of businesses and franchises available for sale that can serve as a starting point to allow you to connect with businesses for sale across Asia. Buyers benefit greatly from using professional advisors that have the appropriate skills, resources and experience relating to the particular industry that interests them. We will soon be providing links on the site to business brokers, lawyers and accountants that can ensure that the process of buying or selling a business is a success.

Two advisers that may be of particular assistance to a buyer of a business are your accountant and lawyer however it may be wrong to assume that the same accountant and lawyer that you have used previously have the necessary experience and expertise to guide you in this particular transaction. Making the right choice at this time is crucial as to how smoothly the transaction will proceed from this point forward.

Preferably you will be seeking advisers that have previous experience within commercial and business law, company transactions, possible tax consequences and how best to structure a business agreement. Someone who specializes will be able to add value to the deal, a true professional recognizes when advice outside their area of expertise is needed and they will know when to refer you to someone else.

Ideally you will have discussed your intention to buy a business with your accountant and lawyer prior to proceeding, and once having sourced what appears to be a suitable business it is prudent to listen to their recommendations prior to signing a conditional contract to purchase.

Your lawyer will help you understand exactly what is in the contract and what your responsibilities are should your offer be accepted by the seller. In all likelihood the conditional contract will be subject to a due diligence investigation which allows the buyer time to conduct more intensive research into the entity. It is during this process that your advisers need to be exceedingly proactive, assisting you in every way to ensure all necessary enquiries are made and answers are provided in an opportune manner.

Anyone can (and will) advise you on buying a business in Asia, nevertheless only a specialist with experience and familiarity within the industry and with the size of entity you are considering will be able to give you the expert advise you deserve. So if you are buying a business in Malaysia or buying a business in Thailand, or even buying a business in Singapore you should look beyond the well meaning opinions of friends and family, spending money on professional fees is a worthwhile investment.

Things to Consider When Buying a Business in Asia

2008-05-15T14:07:00.007+08:00

If you plan to buy an existing business in Asia, carefully analyse both the advantages and disadvantages. One advantage is that a good business history can increase the likelihood of a successful operation and ensure that finance is easier to obtain. Potential disadvantages can be overestimating the goodwill figure and a poor public image inherited from the previous owner.

As a prospective owner, you should establish the current worth of the business and its future prospects. Some important considerations are:

Vendor: Reasons for sale of the business
Sales: patterns, trends, customer base, current suppliers
Costs: fixed and variable costs, staff costs
Profits: analyse financial records, future cash flow and profitablity
Assets: identify and check all assets including intellectual property and leasing arrangements
Liabilites: outstanding debts, refunds and warranties
Purchase agreement: review carefully
Tax: detailed tax implications. Consult an accountant if required.
Legal issues: leases, business structure, foreign investment laws

For advice and protection in buying a business we suggest that you seek the services of a lawyer, accountant or business advisor.

Very shortly, AsiaBusinessInvestor.com will provide a list of support service providers on the website. Buying a business in Asia is a great way to expand your fortunes, but you should work with experts to ensure that you make the best decisions for the future.