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Here Are The Most Dangerous Risks For Large Companies In Asia

October 31, 2018

Via Wikimedia Commons.

Asian economies are still poised to grow in the coming decades. The 10-member ASEAN in particular is expected to attract serious amounts of foreign investment and venture capital as the region’s technological footprint deepens. If this isn’t motivation enough for multinationals to start scouting for new office space and maybe a factory in an economic zone, middle class lifestyles and rising incomes will open vast opportunities previously unheard of.

But there’s always a downside when doing business in markets where local regulations and the rule of law aren’t as entrenched as in the West. (Singapore is the exception here.) For decades, boutique security providers like Adsum Risk Consulting (ARC) have assisted companies large and small when navigating the pitfalls of  the Asian business environment. ARC believes these are the greatest threats to any organization’s bottom line and reputation.


Most countries in Southeast Asia are still saddled with mediocre-to-poor competitiveness, which is a stark contrast to the region’s low labor costs. Though some business processes might be on par with global standards, this isn’t the norm everywhere. In fact, multinationals who want to enter specific markets must anticipate public officials either stonewalling their efforts or soliciting bribes. It isn’t out of the ordinary to jump through administrative hoops or having to enlist well connected middlemen.


It’s an unfortunate fact of life that sensitive information and financial data are prime targets for hackers. As connectivity transforms how business is done across the region the incidence of cybercrime is not surprisingly on the rise. Large organizations in particular are susceptible to being cased by hackers who either want compromising material or low hanging fruit for ransomware. It’s now imperative that every employee and affiliate should share the burden of enterprise-wide security.


A particular risk investors and multinational businesses must be careful of are the very partners entrusted with launching operations in a country. It’s not enough to establish a working relationship just because the partner or their associates were recommended by friends or have “track records.” It’s very common in many parts of Asia for anointed middlemen or proxies to be frauds with criminal intentions. That, or they make themselves out to be something they’re not.


Investors looking for opportunities in Southeast Asia need to do their homework. Unfortunately, this isn’t the norm either. Whether it’s acquiring property or outsourcing a business process there must be constant awareness of the dangers these investments might run into. If the plan involves launching a joint venture or a regional office there needs to be a crisis management strategy in place for both in-country executives and their staff.

IP Theft

Whether it’s a global retail brand or a manufacturer shifting operations to an emerging market, there’s always a risk their goods aren’t just stolen but counterfeited and reverse engineered. Intellectual Property (IP) theft is endemic across Asia, where dismal enforcement and outdated laws encourage this type of activity. If companies have no access to law enforcement or any local representation, fighting business partners and counterfeiters who steal IP is almost impossible.

With partners like ARC, whose consultants have decades of experience behind them, broad and comprehensive solutions are available to deter the worst that can happen. For investigations, ARC has expertise in due-diligence and fraud. This means its consultants know how to check addresses and find out if a prospect is lying about their credentials. In a business environment where things aren’t what they seem, ARC is an ideal tool for protecting a company’s reputation.

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