Contents:
I immediately eliminate countries like China, Singapore, and Hong Kong due to the unstable political situation on the world stage.
Even opening a bank account in such countries for Russian citizens is currently causing difficulties. This is related to the fact that due to the sanctions from various countries against Russians, developed Asian nations are everywhere looking for a "Russian trace" to avoid compromising themselves.
One of my companies is engaged in parallel imports, and in the course of my work, I communicate a lot with banks and bankers from these countries. Some transfers through the countries I am referring to can take weeks or even months, and as for opening an account, if they find out you are Russian:
They immediately refuse. Rarely, but it happens, they can be rude.
They require a significant deposit (for Singapore, for example, starting from 50,000 USD) and a local co-founder.
They simply ignore you. This is how the financial center of Hong Kong operates. They won’t directly refuse you; it’s considered bad manners.
They inflate the cost of opening a company “through their contacts” from 5,000 to 7,000 USD just for paperwork and often do this with people you are unfamiliar with.
They require official guarantees from “local” entrepreneurs. This is particularly common in China and Singapore.
They check for the presence of a physical business in the country and an operational office.
In the end, to open a company:
EITHER IT CAN BE DONE AND EXPENSIVE, OR IT CAN BE DONE AND NOT IN YOUR NAME, OR IT CANNOT BE DONE AND ALSO EXPENSIVE =)
It's also expensive because you pay for every procedure that the government agencies and banks need to conduct to verify you, even before opening. This includes additional risks and, often, money down the drain. THIS IS THE CURRENT REALITY.
In this article, I want to objectively (as much as possible) examine the countries considered to be in the "second tier" of Asia. At least, we are used to thinking of them this way, but is that really the case?
For this example, I will take four countries that are currently very popular among Russian-speaking relocators, entrepreneurs, those who are transferring their assets, and opening businesses around the world:
In the end, I want to provide a general conclusion with figures so you can better understand where it is currently best to open a company for storing funds, for your goals—investing, operational activities worldwide, small local businesses, etc.
Read to the end—it should be interesting =)
Thailand. Key Points
It is not included in the offshore blacklists and opens companies for residents of the Russian Federation. Refusal for national reasons at the time of writing this article is NOT POSSIBLE.
Remote company registration is possible without the personal presence of shareholders.
Thailand has a high level of corruption among the options considered, ranking 108th in the global ranking out of 180 countries (Russia is ranked 139th).
The most common form of business for foreigners is the Limited Company (Thai Limited Company).
A minimum of 3 founders and 1 director is required, along with a legal address.
The maximum share of the company that foreigners can own is 49%.
Corporate tax ranges from 15-23%.
The interest tax is 15%.
The dividend tax is 10%.
Value Added Tax (VAT) is 7%.
The required charter capital is 60,000 USD (at least 6,000 USD must be deposited IMMEDIATELY as recommended by “locals”).
The timeframe for opening a company is 2-5 working days.
The reasonable cost for opening a company ranges from 2,500 до 5,000 USD.
The minimum annual maintenance costs are 1,000 USD.
The total cost of opening, including the contribution of charter capital, ranges from 8,500 до 11,000 USD.
Pros:
Low required charter capital
Quick registration process
Low VAT
Cons:
Lack of 100% control
Must hire a local director and have a local partner
High level of corruption
Main conclusion - here a company NEVER BELONGS TO A FOREIGNER IN FULL. It is suitable for small local cafes/restaurants/service industries/local consulting.
Indonesia. Key Points
Indonesia does not appear on the offshore blacklists and allows company registration for Russian residents. As of the time of writing, refusals for national reasons are NOT POSSIBLE.
It is possible to register a company remotely without the physical presence of shareholders.
Indonesia has the highest level of corruption among the options considered, ranking 112th out of 180 countries in the global corruption index (Russia ranks 139th).
More about opening companies in Indonesia, as this is a very popular direction right now - https://bali-legal.com/en/kitas-company-en.
Step-by-step plan for opening a company - https://bali-legal.com/en/business-bali-bez-oshibok-en.
The most common form of business for foreigners is a Public Limited Company (PT PMA)..
Minimum of 2 учредителя, юридический адрес.
Maximum foreign ownership - 100%.
Corporate tax: from 0,5%.
Interest tax: 20%.
Dividend tax: from 10%.
VAT: from 11%.
Required share capital: 700,000 USD per founder.
Rules for paying share capital: 0% must be paid at the time of registration; the company must show growth dynamics in the first 3 years of operation.
Time to open: 5-10 days.
Reasonable setup cost: from 1,200 до 2,500 USD.
Setup cost including share capital payment: from 1,200 до 2,500 USD.
Minimum annual maintenance costs: 400 USD.
Pros:
Lowest costs for opening a company.
No requirements for mandatory hiring of local employees.
Low corporate tax rate.
Quick remote setup.
Full control over your own company.
Cons:
High required share capital (not mandatory to deposit immediately).
Dividend tax is not low.
Relatively high VAT.
High level of corruption.
OSS login and password (Credentials for the activity control system).
The key takeaway - is to always keep the authorized capital under control and demonstrate its growth dynamics through the company. This approach is ideal for capital-intensive businesses (developers, construction companies, info-businesses, international consulting, etc.). It also works perfectly for any local business.
Vietnam. Key Points
Does not appear on offshore blacklists and allows company registration for Russian residents. Refusal based on nationality is NOT POSSIBLE at the time of writing.
Remote company registration without the personal presence of shareholders is NOT POSSIBLE, primarily due to the requirement to personally contribute to the authorized capital.
The average level of corruption among the considered options ranks 82nd in the world out of 180 countries (Russia ranks 139th).
The most common business form for foreigners is a Limited Liability Company (LLC)..
The company requires at least 2 founders, 1 local director (official representative), 1 local secretary, and a registered legal address.
The maximum share of the company that foreigners can own is up to 100%, with the most popular option being - up to 50%.
Corporate tax: 20%.
Interest tax: 5%.
Dividend tax: 5%.
VAT: 10%
The required authorized capital is between 11,000 до 20,000 USD, with a recommended amount of 50,000 USD.
Capital contribution rules: 30% must be paid by the time of registration, with the remainder due within 3 months of opening.
Timeframe to open: 60-180 days.
Reasonable opening cost: between 1,500 to 3,000 USD.
Total opening cost, including authorized capital contributions: from 12,500 to 53,000 USD.
Minimum annual maintenance costs 520 USD.
Pros:
No official requirement for a minimum authorized capital.
Low dividend tax.
Cons:
High cost of opening.
Extensive bureaucracy and long registration process.
Mandatory requirement to hire local representatives.
The key takeaway is that the bureaucracy is very extensive, which significantly increases the time for opening and complicates many business processes. To reduce the initial costs of setting up a company, it's recommended to open an LLC with up to 50% foreign ownership, although this effectively limits control. This approach works well for local businesses such as restaurants, cafes, hostels, and service industries.
Malaysia. Key Points
Does not appear on offshore blacklists and allows company registration for Russian residents. Refusal based on nationality is NOT POSSIBLE at the time of writing.
Remote company registration is possible without the personal presence of shareholders.
This option has the lowest level of corruption among the reviewed countries, ranking 62nd globally out of 180 countries (Russia ranks 139th).
The most common business form for foreigners is a Limited Liability Company (SDN BHD)..
Minimum requirements: 1 founder and 2 directors (Malaysian residents) and a registered legal address.
Foreign ownership: Between 50% - 100% (foreign ownership is possible (the resident controls 50%).
Corporate tax: 17 - 26%.
Interest tax: 0 до 15%.
Dividend tax: Up to 15%.
VAT: 6%.
The minimum paid-up capital for 100% foreign ownership is от 110,000 USD до 220,000 USD (depending on the type of business activity).
Capital payment rules: 100% must be paid before applying for a visa. Without the required capital, only a partnership with no more than 50% foreign ownership is possible (the resident controls 50%).
Timeframe to open: 5-15 days.
Reasonable opening cost: 3,000 to 5,000 USD.
Total opening cost (including paid-up capital): от 3,000 USD to 5,000 USD.
Minimum annual maintenance costs: 1000 USD.
Pros:
Low VAT rates.
Progressive tax rates on interest and dividends.
Quick remote registration process.
Relatively low corruption levels.
Cons:
A significant paid-up capital is required for 100% foreign ownership.
Relatively high cost of company registration
The key takeaway is a flexible system of taxes and company requirements. You can operate without any paid-up capital (in this case, you will own no more than 50% of the company) or with 100% foreign ownership and residency visas, but in this case, the investment amount must be at least $120,000 USD. This setup is suitable both for capital-intensive enterprises with funds available from the start and for local businesses.
Corruption Levels
A few words about the level of corruption in these countries, based on personal experience and the experiences of our clients.
Corruption in Southeast Asia is not a rigid barrier to business (as it works, for example, in Russia). In Russia, this barrier prevents progress beyond a certain point and ensures that the "elite" remains unchanged.
Here, what is known as "soft" corruption prevails, aimed more at mutually beneficial cooperation between the government official and the entrepreneur..
In many countries, a system of laws is deliberately created in such a way that it’s impossible to fully comply with them, as they contradict one another. This provides a “bonus” or extra income for officials.
For example, in Indonesia, if you need to open a company and engage in activities that are technically prohibited by the state, there is a "protection" system. For around $1,500–2,000 USD per year, you can run such a business "under the protection" of local authorities.
More details on prohibited activities in Indonesia https://bali-legal.com/en/legal-bali-one-en. And the continuation - https://bali-legal.com/en/legal-bali-second-en.
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Authorized Capital
In most Southeast Asian countries, the requirement to deposit authorized capital is not strictly enforced. Only Vietnam requires “money upfront.” In Thailand, authorities simply suggest depositing $6,000 to "turn a blind eye," while in Malaysia, the main point of control over authorized capital is during the issuance of visas.
If you open a company and declare a large authorized capital in Malaysia, the authorities will require proof of the deposit when issuing work visas.
Indonesia plans to adopt a similar scheme in the next two years. This should not affect remote business operations. Also, deposit confirmations can generally be bypassed (let's remember the "soft corruption" schemes), or you can deposit no more than 10% of the nominal amount (around $70,000 - $100,000).
General Conclusion
Indonesia remains a highly sought-after destination for small (local), medium, and large businesses worldwide..
Take another look at how this jurisdiction compares to others if "MINIMAL INVESTMENT FOR COMPANY ESTABLISHMENT AND BANK ACCOUNT OPENING" is important to you:
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Together, we will make life on the island comfortable.
