6 Tips for US Entrepreneurs Expanding Their Business into South East Asia (InCorp)

Business Opportunities
March 8, 2023 - InCorp Global Pte Ltd

This is a thought leadership article from PrimeGlobal member firm InCorp offering tips to US entrepreneurs considering expansion into South East Asia.

If you are industry leaders and have a particular area of expertise, you can submit thought leadership content here which we will share with the PrimeGlobal community.

Tomas Svoboda, an Entrepreneurs' Organization (EO) member from the Czech Republic, is a business speaker and the founder of InCorp Vietnam (formerly Cekindo), a market entry consulting firm that also provides business process outsourcing. InCorp has helped investors and entrepreneurs expand to Asia-Pacific for over 30 years and gained the trust of over 15,000 clients across the world. Tomas shared insights from his successful journey as a foreign national starting a business in Southeast Asia.

You can do a lot in four years: learn a language, graduate from university, or even start a family. As an entrepreneur, you could even expand your business into a new region of the world to take advantage of emerging markets.

I spent the past four years starting a business consulting company from scratch in a young and developing Southeast Asian market with barely any experience. I've helped many entrepreneurs from the United States and other Western countries who want to leverage the benefits of expanding their companies into Southeast Asia, whether that's establishing a new regional headquarters office or adding manufacturing function. To help those who may be embarking on this journey, I'm sharing first-hand insights from my role as a market entry consulting firm and business outsourcing expert.

I developed my Southeast Asia business playbook through personal experience. In 2017, I came to Vietnam from the Czech Republic as chief sales officer for a fintech startup. In 2019, I started a market entry company specializing as a one-stop-solution partner to help foreign investors and international companies open and expand their businesses in Vietnam. International companies expanding to the vibrant Vietnamese market appreciate our help with market research, entity registration, and business process outsourcing.

Three years later, my company was acquired by a multinational corporation. The successful acquisition was primarily thanks to the company's stability. All diligence, including taxes, finances, licenses, and legal processes, was in order. The company was also financially healthy right from the beginning and remained profitable even through Covid-induced market closures. That made us a prime candidate for acquisition. Ensuring we were completely compliant also taught me a lot about how Westerners can successfully expand their businesses to this region.

Here are six things I learned from building a healthy, fast-growing company in Vietnam.

1. Vietnam is an incredibly attractive market

With a population of around 100 million people, Vietnam's economy is still young and developing. The country didn't open its market to the world until 1994. Now, Vietnam's consumers are a target market for American companies and investors from around the world, along with its potential for land development and manufacturing. Large companies that have established headquarters and factories in Vietnam include Samsung, Microsoft, and Unilever. Technology, education, and sustainability are key industries likely to draw investment in the near future.

2. First impressions matter

When you come to Vietnam to do business, it's crucial to surround yourself with experienced people who understand the market and its challenges. For me, the language barrier and cultural differences were obstacles that I encountered constantly. I approached problems with my Western mindset, which was neither effective nor efficient in Southeast Asia. Only after I hired our CEO, a local with international experience, did the process become much smoother.

After that, I realized I needed to hire talented people with similar perspectives to keep the company on the right track. We invested thoroughly in our people -- our department heads all had 10 to 20 years of experience.

3. Adjust cultural expectations

My most significant challenge was adjusting my expectations to the cultural differences between my home country, the Czech Republic, and Vietnam. Everything differed greatly -- from the communication style to the work environment. Because of this, when Americans want to expand their businesses here, it's crucial that they adapt to the market conditions and traditions. I've found that it's ideal when the two mindsets meet halfway.

4. Invest in great people

The primary driving force of growth in my company is the great people whom I started the company with. They are still with us today, including our very first employee. I was lucky to find the right people, who were better than me at what they do. With specialists by my side, our company rarely faced a problem that we couldn't overcome.

5. Learn about the culture

Once you determine a destination for starting your business, it's critical to research the culture. I had never visited Asia before and was met with surprise after surprise. It is now my sixth year in Vietnam, and I still learn something new about local life every day. Had I better prepared my mindset (perhaps through courses or seminars), my decision making may have been more efficient.

6. Adapt at every turn

To expand your business successfully into Southeast Asia, you need to be resourceful, stay optimistic, and trust the process. Don't leave any stone unturned, never lose hope, and always expect the unexpected.

Content by:

InCorp Global Pte Ltd

Headquartered in Singapore, InCorp Global is a leading corporate services provider, with an established regional presence across seven Asian countries, including Indonesia, India, Hong Kong, Philippines, Vietnam, and Malaysia. The group services more than 14,000 corporate clients across various industries, including asset / fund managers, as well as family offices. They are official partners with key government authorities in the region, such as Singapore’s Economic Development Board, a government agency that is tasked with bringing in foreign direct investments into Singapore.

Learn more