How Should European Investors Structure Investments in Southeast Asia? Six Lessons Learned on the Ground

By Sergey Vakhnenko — CEO, Dominart Real Estate GmbH | Building Wellness & Longevity Ventures in Bangkok

How should European investors structure an investment in Thailand or Southeast Asia?

After more than 30 years structuring cross-border real estate investments across Germany, Austria and Switzerland—and now building businesses in Bangkok—my answer is surprisingly consistent.

Start with the investment structure, not the investment opportunity.

Many investors spend months analysing the market, demand, projected returns and competition.

Far fewer spend the same amount of time designing the legal, ownership and tax framework that will ultimately determine whether those returns can actually be realised.

In Southeast Asia, that difference matters.

More than most European investors initially expect.

Over the past year, I've spoken with entrepreneurs, private investors and family offices exploring Thailand, Vietnam and other Southeast Asian markets.

Almost every complex discussion eventually arrives at the same conclusion:

The business opportunity is rarely the biggest risk. The investment structure is.

The legal, tax and ownership logic that works perfectly in Frankfurt, Vienna or Zurich cannot simply be copied into Bangkok, Ho Chi Minh City or Jakarta.

In my experience, the most expensive mistakes happen long before operations begin.

They happen when investors treat structuring as legal paperwork instead of part of their investment strategy.

Here are the six principles I now consider non-negotiable before any capital moves.

1. Start with Ownership—Not the Business Plan

One of the first questions international investors ask is:

"Can I own 100% of my business?"

In much of Europe, the answer is usually yes.

Across many Southeast Asian jurisdictions, the answer is often, "It depends."

Thailand's Foreign Business Act, for example, restricts majority foreign ownership in many service businesses unless the investment qualifies for BOI promotion or another approved legal framework.

That isn't simply a legal detail.

It influences the business model itself.

Ownership rules determine which activities your company can perform, which licences are required, whether technology or medical services should sit inside the operating company and how different assets should be held.

I've seen entire business models redesigned because ownership was discussed too late.

Start there.

Everything else becomes easier.

2. Separate Operations from Intellectual Property

One principle has become increasingly important across every international project I work on.

The company operating the business should rarely own its most valuable intellectual property.

A local operating company should manage employees, customers and day-to-day operations.

A separate holding company should own the brand, proprietary methodologies, technology platforms, operating standards and other intellectual property.

This is not tax engineering.

It is risk management.

The operating company carries commercial, regulatory and operational risk.

Your intellectual property should not.

For investors, this separation also creates transparency by distinguishing operational value from long-term enterprise value.

3. Don't Rely on Equity Alone

Many European investors instinctively finance projects almost entirely through equity.

In Southeast Asia, that approach is often unnecessarily restrictive.

Depending on the jurisdiction, dividends may require audited profits, statutory reserves and proportional distributions before cash can be returned to investors.

A carefully structured combination of equity and shareholder loans can often provide greater flexibility, while remaining compliant with local regulations and tax rules.

Thailand, for example, applies debt-to-equity considerations for certain BOI-promoted businesses.

The exact structure depends on the project.

But the principle remains consistent.

Investor protection is created not only through ownership—but through the design of the investment instruments themselves.

4. Document Every Dollar Before It Enters Thailand

This is one of the most overlooked aspects of foreign investment.

Every significant inbound foreign transfer into Thailand generates a Foreign Exchange Transaction record with the receiving bank.

Many investors barely notice it.

Years later, when they wish to repatriate capital, repay shareholder loans or distribute investment proceeds, that document becomes one of the most important papers in the entire transaction.

Successful exits often begin with disciplined entries.

Money should never cross borders without a clearly documented legal purpose.

5. Design the Tax Structure Before You Invest

Headline returns rarely reflect what investors actually keep.

The real calculation begins after corporate tax, withholding tax, double taxation treaties and the investor's home-country tax rules have all been considered.

Two investors participating in the same project can generate significantly different net returns simply because they entered through different holding structures.

Sometimes the most important investment decision is not where the project is located.

It is where the investor is located.

Or more precisely—

which jurisdiction ultimately owns the investment.

Tax planning should never begin after the investment has closed.

It should begin before the first term sheet is signed.

6. Choose Advisors Before You Choose Partners

One pattern has repeated itself throughout my career.

International investors often spend months evaluating local operating partners.

Yet they spend surprisingly little time selecting their legal, tax and regulatory advisors.

In practice, I have found the opposite sequence produces far better outcomes.

The right advisors help investors avoid poor partnerships.

The wrong advisors rarely help recover from them.

Especially in unfamiliar jurisdictions, experienced local advisors are not a cost.

They are part of the investment itself.

One Observation That Changed My Own Thinking

After three decades working in European real estate—and now building businesses in Southeast Asia—I no longer see investment structuring as a legal exercise.

I see it as one of the most valuable forms of risk management an investor can have.

Markets evolve.

Governments change.

Regulations are updated.

Business models adapt.

A well-designed investment structure gives investors the flexibility to navigate all four.

In the end, successful investing in Southeast Asia is not simply about finding the right opportunity.

It is about creating a structure that allows that opportunity to survive uncertainty, scale internationally and generate long-term value.

Because investment returns do not begin with the asset.

They begin with the structure behind the asset.

What lessons have your cross-border investments taught you?