The four Asian Tigers — Hong Kong, Singapore, South Korea, and Taiwan — are some of the most vibrant and growing economies in the world. Named after the ferocious beasts native to East Asia, these economies are marked by rapid industrialization, high development, and annual economic growth exceeding 70% between the 1960s and 1990s. Sometimes referred to as the Asian Miracle, these countries each hold opportunities for companies interested in global expansion to unique, thriving economies.
A Brief History of the Asian Tigers
The story of the Asian Tigers’ transformation begins after World War II. Following the devastation of Japanese rule, these countries began to rebuild their infrastructures in order to compensate for the devastation left by the war. Local governments pushed industrialization, which capitalized on local strengths and export-based economies. As income rose, new consumer and entrepreneurial classes developed, and the economies expanded beyond industrialization. These markets currently have some of the highest incomes per capita with advanced technological economies that no one would have expected in the 1950’s.
Each of these four economies benefits from an excellent location near some of the most populous cities in the world. The four Asian Tigers all boast a well-developed infrastructure, including excellent export logistics, making them ideal economies for companies expanding into East Asia.
Hong Kong
Hong Kong has the most aggressive free-trade policies of the four Asian Tigers. These policies have no import tariffs and only charge excise duties on four commodities: hard alcohol, tobacco, hydrocarbon oil, and methyl alcohol. Additionally, Hong Kong has a strong culture of civil law, a sophisticated infrastructure, and strong finance and marketing sectors. Hiring talent from the city can be a benefit to any company as it boasts a highly skilled labor pool. However, companies need to be aware of the challenges Hong Kong businesses face when dealing with the region’s aging workforce.
Because it is considered a special administrative region of China, Hong Kong is in a unique position that allows it to act autonomously in terms of economic and social systems but is subject to China’s political system. Companies that choose to do business in Hong Kong can use it as a point-of-entry to get into mainland China’s developing market.
Work visas in Hong Kong are nearly as open as their free-market in order to simplify hiring for companies in the area. To obtain a visa, an employee needs a job offer that is “commensurate with the prevailing market rate,” a job that is not easily done by a local, and technical qualifications or proven experience in a field.
Singapore
Before World War II, Singapore was already a regional trading epicenter. After gaining independence in 1959, Singapore’s ruling party focused on economic development by encouraging foreign investment. Today, the government focuses its efforts toward business and growth in two ways: eliminating superfluous regulation and incentivizing development. They have a “no red tape” policy regarding incorporation, tax forms, and visa applications, making Singapore one of the easiest places to do business. In addition, the government invests heavily in the private sector, offering incentives for businesses, which has fueled a massive drive for start-ups to enter the market.
While Singapore’s growth was initially built on access to resources in nearby countries, the future lies in the information sector. In 2001, the government undertook a plan to court tech companies and liberalize the financial sector to allow for more investment in these growing industries. This makes way for more companies looking to take advantage of the economic stability Singapore prides itself on.
Citizens of many countries do not need to apply for a visa for business before arriving in the country, simplifying the visa application process for Singapore. However, those individuals do need to apply for a work permit and provide proof of a job offer and credentials in order to work in the country.
South Korea
There are numerous reasons to look at expanding into South Korea. The government heavily promotes foreign investment in the country by offering tax incentives and grants to foreign companies that can make contributions to the economy. They also help companies find and pay for industrial sites and help to cover start-up costs. Likewise, free-trade zones decrease regulation and simplify bureaucratic processes.
South Korea has a well-developed infrastructure, making it one of the most affluent countries in Asia. Positioned between China and Japan, the country benefits from being surrounded by more than 60 cities with at least one million people in each city. South Korea is currently working on several free-trade agreements, giving businesses in the country free access to markets around the world.
Home to leading brands like Samsung, South Korea is one of the most tech-savvy countries in the world. In addition to exporting high-quality products from some of the most recognizable names in the industry, South Korea has structured its tech industry to allow startups and global leaders to collaborate and test new disruptive technologies before releasing them to the global marketplace.
Despite its welcoming economy, South Korea still has a complicated immigration and visa system. Visas are divided into categories and to work in the country, individuals will need a letter of recommendation from the government as well as a job offer in place before applying for the visa category that fits their needs. For entrepreneurs and businesses looking to take part in South Korea’s economy, visas are distributed using a points system based on an individual’s qualifications and potential to benefit the country.
Taiwan
Taiwan’s rapid industrialization initially focused on heavy industries, such as the manufacturing of steel, electronics, and petrochemical. After competition from China began ramping up in the 1970’s, Taiwan’s government pushed the economy toward high-skilled manufacturing. Currently, Taiwan is a manufacturing hub, often focused on producing parts, or intermediate goods, that are incorporated into final products elsewhere.
Intermediate goods make up 70% of Taiwan’s exports, and the country produces 94% of all motherboards and notebook computers used in the world. High-skilled manufacturing industries drive the export economy, especially in electronics and machinery. Businesses that are looking to build products at a low cost and in a stable market should consider manufacturing work in Taiwan.
Obtaining a work visa for Taiwan begins with an employment offer, after which the employing company must apply at the Ministry of Labor in order to onboard employees. Taiwan works hard to ensure that workers can enter the country freely in order to help bolster the local economy.
The four Asian Tigers have experienced rapid economic growth that no one thought possible, and have proven that their economies are able to weather economic storms well. Each one offers unique opportunities for companies looking to bring their business into a thriving, stable economy for global expansion.
Trust the experts at Velocity Global to help your business capitalize on the strength and stability of the four Asian Tiger economies. Give us a call today to see how we can help you expand into these markets or into any of the over 185 countries we support.
