It’s more than just tourism and hospitality
In the past few decades, Southeast Asia has played host to a significant number of expats from the east to the west.
According to some estimates, there are 500,000 to one million expats in Thailand alone.
Over a quarter of residents in Singapore, the financial powerhouse in the region, are expats.
The Malaysian capital city of Kuala Lumpur has been regarded among the friendliest cities in Asia for expats.
This is not a one-way street. Thousands of citizens from countries like Thailand, Malaysia and Vietnam have migrated to countries like the United States and the United Kingdom in search of opportunities.
The expat populations on both sides have unique needs that traditional businesses may not be able to fulfil.
For example, online health portals that enable customers to book health checkups are not exactly new. However, expats have a tough time ensuring the well-being of their old parents back in their home country.
OurHealthMate is a startup targeted solely at Indian expats in countries like Singapore where they can book health checkups and keep tabs on the health of their parents back home in India.
This service addresses a problem unique to expats that is not rectified by traditional health and wellness startups.
For instance, take Dee Money, a mobile app startup that enables easy remittances from Thailand abroad. This is quite popular among expats in Thailand to send money to their families back home.
Traditionally, remittances are carried out through banks that require the sender to be a citizen, a long-term non-immigrant, or a permanent resident. This is where the company brings in an easy on-boarding service by providing a single-document-registration process.
Remitting money home can be incredibly bureaucratic, and the startup offers a seamless mobile app based process that enables customers to connect their bank accounts with the app or use the unique QR code for this purpose.
In addition to such startups with a niche targeting, there are also a number of online community startups targeting expat communities from specific countries and regions of the world.
These startups have enabled new immigrants to transition to their new lives much more smoothly than their predecessors.
As evident, there is an incredible opportunity here in solving problems that uniquely impact expats in Asia or elsewhere.
But, there are also challenges that come with regulations in international commerce.
How do you go about identifying the problems and finding the right solutions? Here are a few tips.
Assessing the size of the market
One of the biggest challenges with operating a startup targeting expats is that you do not have complete control over your customer base.
The best example here is the case of expats from countries like Syria and Iran who were banned from the United States earlier under the Trump regime.
This regime also caused a steady decline in the number of expats from other countries like India, China, Philippines and Vietnam.
If you are an American startup targeting one of these niche expat communities, your business may quickly turn volatile due to such external factors.
It is a good idea then to target communities that have enjoyed a steady presence in the host countries.
This could be Indian and Chinese communities in Singapore, or tourists in Thailand — countries like Singapore and Thailand rely heavily on expats for their economy and are thus more unlikely to change policies impacting their cash cows.
Navigating the regulations
If you are a startup targeting Chinese expats in Malaysia, should you incorporate in Malaysia or China?
Also, if your business is a sort of a marketplace that brings users from two different countries together, how do you go about doing this without having to be physically present in both countries?
There are tons of regulations that every country has with respect to money moving out.
This creates barriers that can affect your startup.
For instance, using online ad networks in your incorporated country could be cheaper than advertising outside since that could incur additional taxes depending on your location.
Each business is unique, and regulations differ based on where you are located, and which nationalities you want to target.
It is a good idea to hire an international tax consultant to advise you on the regulations before you decide to incorporate.
Depending on your offering, your startup may experience challenges in finding the right talent.
For instance, a niche Thailand startup targeting Chinese expats might need to hire workers who not only possess expertise in the industry you operate in but also proficient in Mandarin.
This automatically brings down the size of your talent pool, and also potentially increase hiring costs.
You may, of course, look at contract workers from abroad or open satellite offices in the target country.
However, there is no denying the fact that these are less-than-ideal alternatives and may present new challenges.
Building a startup targeting expats is not that easy.
But these challenges also create a barrier to entry that helps you build a captive market that increases your probability of success.
It is a good idea to consider all the technical and legal challenges of operating your startup before going ahead and incorporating your business.
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