Monday, June 30, 2008
Cambodia Investment Surges for Korean Investors
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.
Labels: cambodia, cambodia business opportunities, cambodia investment, cambodia investors, korean investment in Cambodia, Korean investors
Sunday, June 29, 2008
A Business for Sale in Asia, Selling Through the Internet
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.
Labels: asia business for sale, business for sale
Austrade: Australia's Trade and Investment Promotion Agency
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.
Labels: Austrade, Australian Trade Commission, Business Club Australia, ConferenceBay.com
More Economic Liberalization Ahead for Vietnam's Property Investors
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.
Labels: vietnam economic liberalization, vietnam property, vietnam property investment, vietnam property investors, vietnam realestate
Saturday, June 21, 2008
Beating an Investor Path to the New Mongolia
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.
Labels: mongolia, mongolia investor, mongolia property investment
Thursday, June 12, 2008
Asia Business for Sale: 10 Key Steps to Prepare to Sell Your Business in Asia
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.
Labels: asia business for sale
Tuesday, June 10, 2008
Seminars on Buying or Selling a Business in Hong Kong
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.
Labels: asia business brokers, asia business for sale, hong kong business broker, hong kong business for sale, hong kong businesses for sale
Monday, June 9, 2008
Angel Investors in Asia
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.
Labels: ABAN, angel investment, angel investor, Arab Business Angels Network, asia angel investor, BANSEA, Business Angels Network SouthEast Asia
Thursday, June 5, 2008
Papua New Guinea Agribusiness Investment Opportunities
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.
Labels: agribusiness, agriculture, business opportunities, investment, palm oil, papua new guinea investment, png, png investment
Wednesday, June 4, 2008
Key Questions to Ask When Looking at a Business for Sale in Asia
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.
Labels: asia, asia business for sale, businesses for sale, hong kong business for sale, indonesia business for sale, saudi arabia business for sale, selling your business
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