Our founder, Andrew Henderson, has maintained a base in Southeast Asia for years, so obviously, there must be a lot of positives, but as with any potential offshore option, there are also downsides to Southeast Asia.
This article is not intended to put you off the area or tell you that you shouldn’t live there but rather to give you an honest view of the downsides of living in Southeast Asia.
At Nomad Capitalist, we appreciate the importance of having a comprehensive understanding when making the best possible decisions for your Plan B.
Limited Social Assimilation
There are thousands of digital nomads throughout Southeast Asia, but rarely can they integrate easily into society. Although, people in this part of the world are known for being friendly and gentle.
As time goes by, priorities change. You get out of your 20s and want to connect somehow to something or somewhere. It’s hard to do that in Asia.
Malaysia is probably the best country in the region for those looking for a more Western culture. It is — in a good way — the United States of Asia due to its wide diversity and the number of people who speak English there.
You may choose not to live in a place where there are a lot of expats. Or you could live in Chiang Mai, Thailand (which might as well be the 51st state) and have a much easier time integrating into the expat society there, but that is not what everyone is looking for.
Integrating into an expat community is very different from assimilating into the local culture of a given location. And while every experience is what you make of it, it’s definitely more challenging to make friends in Southeast Asia than in other areas.
It’s not only difficult to integrate socially in Southeast Asia, but also professionally. For instance, joining in or working with people in an existing business is challenging.
That being said, starting a business, there can be very profitable. Emerging markets in Asia offer great potential payoff. Since it is harder to do business there, those who choose to stay, invest, and make it work have the chance to do very well.
However, if you are looking for a place to grow what you already have, you may want to look for opportunities where people are more open to outsiders and the business culture is more welcoming overall.
Are you looking to start or move your business overseas?
Some of the best low-tax countries for running a business include the UAE, the Bahamas, and Italy.
The Foreigner Disadvantage
Apart from not being able to assimilate into Southeast Asian society, being a foreigner anywhere in Asia makes you stand out as a target for people who have no problem taking advantage of your Westernness.
Kuala Lumpur, for instance, for all of its positives, may be one of the worst cities in the world for taxis, overcharging foreigners. Contrast that to Tbilisi, Georgia, where you will be treated more fairly.
Standing out is not always a bad thing, and there are times when you can appreciate the kindness of people in Southeast Asia, but let’s be honest: there are certain occasions when people will take advantage of the fact that you’re a foreigner. This issue, of course, is not limited to this part of the world.
Are you looking for somewhere where you can integrate into society and not worry about standing out as a foreigner?
Countries where you will find it a lot easier to integrate socially and are among the best countries in the world to live in include the likes of Ireland, Mexico, and Colombia.
Cooking customs in other parts of the world aren’t the same as in the US, and since it’s not what you’re used to, you tend not to cook as much.
While you may find yourself a beautiful apartment, most simply don’t come with adequate cooking facilities or a dishwasher.
Cooking for yourself can also be expensive simply because prices are higher in the areas where the majority of expats choose to live.
Most people aren’t going to live in a cheaper area of the city just to get lower food prices, so expat-priced food is one of the costs you sort of have to add on.
You can eat an abundance of street food for incredibly cheap prices, but sometimes, you will want more control over what’s in your food. Being able to cook for yourself may seem like a small detail, but things definitely add up.
Lackluster Banking Institutions
The poor customer service spills over into Asia’s banking institutions as well. Overall, banks are very difficult to work with in Asia.
In places like Hong Kong, banks like HSBC don’t want to open new accounts unless you live there and have millions of dollars.
Banking in Hong Kong has become an utter mess, and bankers there are the quintessential definition of paper pushes.
Even worse, little innovation is coming out of these countries’ banking institutions. Singapore is the exception, with premier banking services for wealthy entrepreneurs and investors. Although you can count on Singapore to manage your investments, it will require a lot of money.
In many Asian countries, you can’t even get a bank account. And in many, you wouldn’t want a bank account.
In most cases, you have to have specific residences or do certain things to qualify to open an account, and it’s just not that easy and really not worth it.
Europe vs. Southeast Asia
One of the biggest reasons for our founder, Mr. Henderson, leaving Southeast Asia was because he wanted to be in the middle of everything, and that meant living closer to Europe, with greater opportunities and better ease of operation.
Malaysia is still a very open place for real estate, but things are very overpriced. To find the best opportunities, you have to dig deep.
Only a few are willing to go somewhere like Cambodia, where you have to personally put your thumbprint on the deal. If that’s you, that’s fine, and there’s a lot of money to be made there if you know what you’re doing.
However, if you want a more typical lifestyle, there are plenty of places to look other than Southeast Asia.
In Europe, if you want to buy a house, you can do it on your own. The process is more straightforward, the laws are more open, and there are more protections for everyone involved.
Plus, if you run a knowledge-based business, you should probably look to a place like Europe.
Europe checks most of the boxes for what you should be looking for offshore, especially for residencies, citizenship programs, and low taxes. There are countries with taxes as low as 15%.
Also, realize that Europe does not automatically mean Belgium or France. There’s so much to Europe. There are so many places to invest.
Better Talent Value
Another benefit to working in Europe over Southeast Asia is the cost per value of the labor force.
Suppose you were to start a knowledge-based business and could only work out of one European country. In that case, there are plenty to choose from: Romania, Bulgaria, Serbia, Bosnia, Macedonia, Lithuania, Estonia, Georgia, Ukraine, and Moldova. Many countries with incredibly brilliant workforces and a strong ethic are willing to work for a fraction of the cost.
Despite these drawbacks, Southeast Asia still has plenty of opportunities to take advantage of, including the great lifestyle, low or zero tax rates, and a very international environment. Two better cities in Southeast Asia for Entrepreneurs include Kuala Lumpur, Malaysia, and Bangkok, Thailand.
Kuala Lumpur is possibly the best place to live as opposed to Singapore, where it seems like the juice isn’t worth the squeeze if you follow our global citizen sandwich.
At Nomad Capitalist, we help seven and eight-figure entrepreneurs and investors legally go where they’re treated best, whether you want to move, dramatically reduce your tax rate, or reduce your cost of living.
Whether you are considering Southeast Asia or elsewhere, when you become a Nomad Capitalist client, we will help you with the best choices for ease of immigration, tax-friendliness, quality of life, and accessibility.