Doing Business in Asia: 5 Mistakes Every Foreigner Makes

How to Do Business in Asia

American entrepreneur Matthew stood before a room filled with potential Japanese partners. Having successfully expanded his tech startup across Europe, he was eager to tap into the thriving Asian market too.

He prepared meticulously, studying market trends and adapting a pitch that had won over investors back home. But as soon as he passed out his business cards to his potential investors, the once-warm atmosphere in the room grew cold.

Little did Matthew know, his casual one-handed gesture of passing out business cards – so common in the West – was a faux-pas in the Japanese business culture. He should’ve used both hands to do so, as a symbol of respect and sincerity.

Although it might seem like a minor misstep, doing business in Asia isn’t merely about numbers and strategies. It’s something that requires an understanding of the subtle nuances of culture, etiquette and tradition.

In this article, we’ll tell you how you can do business in Asia successfully. And although there are guidelines that will apply to all of the countries in the continent, it’s worth keeping in mind that a lot of variance also exists, especially when it comes to cultural differences and specific business opportunities.

So, whether you’re a seasoned entrepreneur like Matthew or you are just starting on your investment or business journey in Asia, here are the top 5 mistakes that foreigners make when doing business in Asia, and practical advice on how to avoid them.



The Asian continent is home to over 4 billion inhabitants, and naturally, you’ll find a large degree of variance between its dozens of countries. Mumbai is a completely different place than Shanghai.

Mistake #1: Ignoring Cultural Differences

Eager to just get started? Not so fast; don’t underestimate the importance of cultural nuance.

Ignoring the subtle yet significant nuances of cultural differences can lead to embarrassment and plenty of misunderstandings. But, most importantly, it can also lead to missed business opportunities.

Whether it’s the way business cards are exchanged or the importance of formal titles, the guidance per country will differ and it’s simply too much ground to cover here. That said, here are three bits of advice we have for you:

  • Read up on the local business etiquette. Understand the local customs, such as bowing in Japan, or addressing the most senior people first and always with their formal title, (e.g., Director or Mayor, not Mr. or Ms.). Attending cultural training workshops is a handy way of speeding up the learning process and, most often, learning from the locals themselves. Otherwise, the internet is full of videos and articles on the particulars of business etiquette, including audiobooks and podcasts.
  • Know and respect religious beliefs. Being aware of religious occasions and customs, especially those that may affect doing business, is paramount. Research the predominant religions and how they’re practiced in the country or the region that’s of interest to you to avoid misunderstandings.
  • Seek local guidance. Seek out destination experts, ‘fixers,’ and cultural consultants to get up close and personal with a new country. It’s best to physically travel to the location and get personal guidance; no amount of reading or video watching can outweigh actual experiences. You could even ask them to set up mock business situations for you to put your cultural knowledge to the test.


Mistake #2: Choosing the Wrong Country

Many people think that investing in Asia is straightforward, but how could it be when the continent is home to 48 countries?

With dozens of countries to choose from and without insider knowledge about all of them, people seeking business opportunities often choose the wrong country to invest in.

Don’t want to experience financial loss? Then understanding the local market dynamics is essential, as different countries in Asia have varying economic landscapes, regulations, and consumer behaviors.

There is a wide range of economic development throughout Asia as well. There are the emerging markets to consider, like Malaysia and Vietnam, as opposed to the more developed ones like Singapore and Hong Kong.

For example, you might have chosen to open your business in Vietnam without understanding that a service-based business like yours might do much better in Singapore or Hong Kong. Then, you have to redo the whole opening up of a business again in a different place, wasting time and resources.

Do your homework to avoid making this mistake.


  • Research the market. Just as you researched the cultural norms and religious customs, it’s vital that you understand the economic landscape of a place. Check to see what the temperature of the market is; is it an emerging one? Or perhaps it’s a frontier market altogether? Analyze all industry and consumer data and trend insight reports that you can get your hands on. Some of those reports will cost you – and it will be well worth the investment.
  • Identify strategic locations. You can go into choosing an Asian business location blind-folded or, worse, led by emotion. Whichever location you choose must tick all of the boxes when it comes to your business needs. Consider factors such as infrastructure, tax systems, and business-friendliness, among others. For example, a manufacturing-based business will need the infrastructure to ship your products and a tax system that benefits those who produce goods.
  • Evaluate risks and opportunities. You don’t know what you don’t know. But you surely should conduct a thorough risk assessment before you jump into doing business in the Asian country of your choice. How’s the stability of the political environment? What about the tax system? You can’t afford to be blindsided by things that you could have predicted because the facts were staring you right in the face. Similarly, you need to know what opportunities for growth there are. You wouldn’t want to see your growth curves flatten out a few years into your business.
World Average Age Map

Comparing different markets is crucial. Don’t make the common mistake of visiting somewhere as a tourist, and deciding to invest based on those experiences alone.

Mistake #3: Underestimating Time to Market

Entrepreneurs, particularly those with limited foreign market experience, can be quick to jump the gun and assume that whatever works in America or in Europe will automatically translate to anywhere in Asia. That couldn’t be further from the truth.

Your market entry strategy needs to be bullet-proof before you start making any substantial investments. Just the economic and cultural differences alone will be plenty to contend with. Take your time to figure it all out and you’ll be spared from making really costly mistakes.

Imagine this: you want to expand your ride-share app into Asia and want to do it fast. You skip most of the research and launch with the same marketing message and the same aggressive pricing you used in the West.

… And it flops massively. That’s because you didn’t consider the fact that in a society that values community over the individual (as in the West), people perceived your pricing as a threat to their own family members, and the matter of private transport as something stuck-up and unpalatable.

Here’s how you can avoid similar blunders.


  • Invest in market research or collaborate with local experts. Consider good-old focus groups, conduct surveys, or collaborate with local research agencies to get all of the market intel that you’ll need to go to market. Engage local marketing and business development experts to align your strategies with local market dynamics.
  • Adopt a tailor-made approach. It goes without saying, but you should customize your business model to suit the local market. Consider factors like pricing (can the people afford to pay the same as they do in America? Or perhaps you need to launch a more basic version of your product/service to bring the price down?), packaging, and even marketing. The more homework you do beforehand, the smoother your launch will be.
  • Be patient. Good things take time. Understand that it will take time for you to fully grasp a market and adapt your products or services to it before you launch. Test the market with pilot projects if the stakes are particularly high.

Mistake #4: Neglecting Regulatory Differences

Sure, there are the cultural concerns that you can avoid by doing plenty of research when it comes to market acceptance, but another huge mistake that a lot of business people unfortunately make is neglecting the regulatory environment.

Sometimes, it’s due to making sweeping generalizations, thinking that the entire continent of Asia has the same regulations or, at least, very similar ones. That couldn’t be further from the truth as each of the countries in Asia has a unique regulatory environment. And failing to recognize that will cost time and money



Dealing with government offices is frustrating – particularly in emerging markets. Reading guides on the internet often won’t help you navigate local bureaucracy either. It’s often nuanced and more complicated than it seems at face-value.

For example, a health supplement company from America might have been highly successful with their products in the West and they thought they could simply replicate their entire process over in China.

However, they underestimated the time to market. The regulatory environment meant that instead of being regulated as food (like it is in the USA), health supplements are regulated as if they’re medicine over in China, and a long approval process needs to take place.

Before entering a new-to-you market, all of the legal and regulatory considerations need to be made, ensuring there are no compliance issues, legal disputes, or even financial penalties.


  • Understand intellectual property laws. Have a lawyer handy, but also be a little versed in it all yourself to ensure that you can monitor and enforce your rights proactively. Register trademarks and patents in a timely fashion.
  • Comply with all labor laws. Familiarize yourself with local labor laws, including wages, working hours, and termination procedures. Provide contracts and all rightly earned benefits. Be meticulous. Government officials are always overly-eager to punish ‘unsuspecting’ foreigners for even the smallest infractions.
  • Invest in proper legal counsel. Don’t go at it alone. Engage a reputable legal professional to ensure full compliance with all local laws.

Mistake #5: Failing to Build Local Connections

In the end, your business success hinges on who you know. That’s not just true in Asia – it’s true in the whole world.

Ignoring the importance of building local relationships and connections can hinder business growth and success. So, take your networking seriously and your relationship-building even more seriously.

Consider the fact that many Asian business professionals spend the majority of their working hours networking and building those relationships with business partners. It’s of paramount importance in this continent.

So, how do you do it? Here’s a quick cheat-sheet.

  • Invest time and money in networking. Is it annoying to attend yet another conference? Sure. But attending local events and joining industry-specific associations is exactly how you can propel your business forward in Asia. Don’t shun away from trade shows and business forums, if those are relevant to your business too.
  • Build local partnerships and leverage local talent. Collaborate with local businesses to gain trust and credibility. Consider joint ventures or strategic alliances as a quicker way to grow your business and your bottom line. Hire and empower local managers and staff who understand the market, have a local network already, and can connect with local stakeholders better than you.
  • Be genuine. Even if you can’t find a lot of time to spend on networking, what little time you might spend, show interest. Spend time in the country you’ve chosen to invest in, let the culture seep into you, and show genuine interest in the community too. Why not run a few social responsibility initiatives too?

How to Do Business in Asia

Doing business in Asia is an exciting and rewarding venture but it isn’t without challenges.

You might be yearning to just get started, we’d advise you plan carefully, exhibit cultural sensitivity, and think strategically before taking any action.

Avoid the 5 most common mistakes we’ve outlined above and implement our strategies to avoid them. Needless to say, you’ll still make mistakes – possibly different ones – but learn from them and do your best to adapt and move on.

If you do this, we’re sure you’ll be able to navigate the Asian market of your choice with confidence and success.

And, if you ever need guidance about doing business in Asia, we here at InvestAsian are always here to help.


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