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Go East Young Man

Hello from Hong Kong,

Hong Kong is the epitome of east meets west. HK and Singapore are probably the two most interesting starting points for new fintech companies in Asia. Most international banks have a presence here, there is very strong rule of law, and you’d be amazed at the network of connectors in these cities.

But Hong Kong and Singapore are relatively small domestically – with 7 and 6 million people respectively. Therefore a growing need to eventually look beyond towards large emerging markets. These markets in SE Asia and North Asia are sometimes not ideal in terms of shareholder laws (see as an example: Where only 50% foreign ownership is allowed in ID or TH for certain industries, the IP can be held offshore and local nominees can be utilized.

Regionally, having the IP held in SG or HK is very common, and it’s much easier to attract investment. This is why we usually advise clients (even if they operate through a local entity in Thailand) to hold the IP and ultimate ownership through an HK or SG company.

I’ve been in Hong Kong for most of 2017 – and it feels weird being in one place, last year I had over 50 flights. I think there is great value in settling in a place, as long as all your options aren’t tied to one jurisdiction.

Things really seem to be picking up the pace in Asia and it seems like the shift of power from east to west is happening slowly but surely. It’s very tough to time macro trends as they happen over a period of years – sometimes decades. See this interview I did with Jim Rogers in Singapore for more on this topic.

I talked about Fintech and what’s happening in China. Lots of countries in the Asia Pacific are starting to wake up. We’ve been writing about SE Asian emerging markets for many years – and while we’ve seen sustained growth – we’ve just now started to see things really start to pick up.

I know a friend starting a bank in East Timor. In Cambodia, Venture Capital is just starting to pick up (I noted how in 2011 there was little to no competition for this). Fintech and to some extent eCommerce are booming and attracting investment. We’ve written at length about starting a company in Thailand (SiamStartup). Our thesis that Asia may be the best place in the world to start a business, is starting to come true.

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