Nomad Capitalist Chapter 13: The Final Frontier - Frontier Market Business and Why Late Is Too Late

Henderson is walking through Siem Reap, Cambodia. He is not heading to Angkor Wat like every other tourist. He is going to the Sofitel Hotel to hear the story of a French expat who became a millionaire selling cakes.

The story goes like this. Arnaud Curtat was a pastry chef in Bangkok. He moved to Cambodia with his Thai wife. She started a tiny fruit and cake stand for about $250 a month in rent. The fruits were a hit. The cakes sold out. Within a year, Arnaud quit his hotel job and joined her. They called it The Blue Pumpkin.

Fruits turned into bread. Bread turned into ice cream. One tiny storefront became nine locations. Then supermarkets across Siem Reap. Then Phnom Penh. After ten years, Arnaud sold half his stake for around $1 million. A couple who came to Cambodia with nothing but baking skills built a food empire.

Now compare that to opening a bakery in California. You need certifications. Special equipment. Hours of classes. Three-letter agencies breathing down your neck. Ordinances about everything from advertising to hiring. In Cambodia, you rent a space, hang a sign, and start baking.

That is the core message of this chapter. Frontier markets are wide open for people willing to show up and do the work.

Three Types of Markets

Henderson breaks the world into three categories. Developed markets, emerging markets, and frontier markets.

Developed markets are the usual suspects. United States, Western Europe, Australia, Japan, Singapore. These places have high income, good infrastructure, mature financial systems. They also have slow growth, high taxes, enormous bureaucracy, and birth rates below replacement. The middle class is shrinking. Government is expanding. Starting a business means jumping through hoops for years before you make a dollar.

Emerging markets are one step below. Brazil, Russia, India, China, Mexico, Turkey, South Africa. These countries are growing fast. Expanding middle class. Improving standards of living. But they are often already saturated with competitors. The easy money has been made.

Frontier markets are the real opportunity. Cambodia, Laos, Georgia, Montenegro, Macedonia, Bulgaria. These places are just starting to develop. Smaller markets. Higher volatility. Fewer regulations. Less competition. And governments that actually want you there.

I grew up in a post-Soviet country. I saw firsthand what happens when a frontier economy starts opening up. The people who showed up early and started simple businesses made serious money. The ones who waited until things were “safe” found that all the good positions were taken.

Why Frontier Markets Are Worth the Risk

Henderson lists several benefits. Let me walk through the ones that matter most.

Long-Term Growth

Imagine getting into Thailand in 1970. Between 1970 and 1990, Thailand’s GNP quadrupled. Per capita income tripled. Growth peaked at 13.6% in 1988. That was the time to be there.

Henderson says Phnom Penh today is the Bangkok of thirty years ago. The same growth trajectory. The same untapped potential. If you can see where things are heading and get there early, the returns are enormous. Not just on your business. On the country itself.

Higher Returns

His friend runs a property fund in Cambodia. Conservative blue-chip properties. Rental yields of 10-15% unleveraged. Compare that to the UK or US where you might get low single digits. Or Switzerland, where returns are even worse.

The risk keeps other investors away. That means less competition and higher yields for the people who show up.

Diversification That Actually Works

Cambodia has not had a recession in over 20 years. Growth has stayed above 7-8% every year for a decade. The Asian Financial Crisis of the 1990s? Missed it. The tech bubble of the early 2000s? Did not notice. The 2008 Global Financial Crisis? Barely a scratch. Even the 2020 pandemic had minimal impact.

Frontier markets are often isolated from the global financial system. That isolation, which most investors see as a weakness, is actually a strength. Your Cambodian property fund does not care what the S&P 500 is doing.

Almost No Competition

In the West, business is all about finding a niche. Every market is saturated. Every idea has ten competitors. In frontier markets, basic services often do not exist yet. No pharmacy chain. No high-end furniture store. No delivery service for cosmetics. You are not competing with established players. You are creating the market.

Costs Are Tiny

Office space in the Philippines averages $21 per square meter. Manufacturing wages in Vietnam are $107 a month. In Laos, as low as $45 a month. You can start a real business with $5,000 to $15,000. Compare that to the hundreds of thousands you need to open anything in a developed country.

Henderson says every business he has started began with a small amount of money and a basic concept. No million-dollar investments on a hunch. Small bets with almost immediate cash flow. That is the frontier market way.

How to Pick the Right Market

Henderson does not just say “go to Cambodia.” He gives a framework for evaluating frontier markets. Here is what to look for.

The Fundamentals

Low per capita GDP. But not just low. You want a country where institutions and the workforce are transforming. Room to grow plus the will to grow.

High population growth. The West is getting older. Frontier markets are getting younger. Young people buy things. Old people… less so.

Good enough health indicators. Life expectancy tells you a lot about a country’s trajectory.

Urbanization. Bigger cities mean economies of scale. More workers. More customers.

Widespread tech usage. How many people have mobile phones? Is e-commerce growing? These numbers predict the future better than any economic report.

Ease of doing business. The World Bank has an index for this. Check it before you commit.

Culture Matters

This part surprised me. Henderson says culture is a fundamental that most people ignore. In the West, successful businesspeople are often viewed as greedy villains. The “evil one percent.” That cultural attitude makes hiring harder and doing business less enjoyable.

In places like Uganda, China, Vietnam, entrepreneurship is respected. People want to work. They take jobs seriously. They do not demand holiday pay and union representation on day one. Henderson says if an American and a Venezuelan apply for the same freelance job at the same rate, he hires the Venezuelan. Not because of quality. Because of attitude.

Harsh? Maybe. But as someone who has worked with developers from all over the world for twenty years, I can tell you the hunger to succeed is real in developing countries. It is not about paying people less. It is about finding people who care about doing great work.

Countries to Watch

Henderson gives a list. Let me summarize the highlights.

In Southeast Asia: Cambodia is the standout. Laos is the final frontier. Vietnam has 92 million people and a growing startup scene. Indonesia has Bali becoming “Silicon Bali.” Malaysia has Penang for startups.

In Eastern Europe: Estonia is the leader. First flat tax in the region in 1994. Zero corporate tax on reinvested profits. Tallinn is where Skype was born. Georgia is Henderson’s favorite. Everything is easy there. Low fees, 15% tax, young government officials who actually want to help. Montenegro is open and eager. Macedonia copied Estonia’s tax model at half the rate. Bulgaria and Romania give you EU access at 10% flat tax.

For getting residency through business: Belgium gives you residence for starting a small business. Bulgaria gives residence if you hire ten people. Lithuania if you hire three. Colombia if you invest just $20,000 in a company. Singapore and Hong Kong have programs but they are expensive and strict.

The Risks Are Real

Henderson does not pretend frontier markets are easy. If you want to trade stocks in Mongolia, you need to physically go there and open a brokerage account. Finding contractors who meet international standards is hard. Even buying groceries you recognize can be a challenge.

His tips for reducing risk:

Be on the ground. You cannot scout opportunities from your couch. Henderson’s friend started his property fund by riding a motorbike around Cambodian neighborhoods, writing down phone numbers from “for sale” signs. Deals were sealed with cash payments and fingerprints at the local town hall. That is how frontier markets work.

Find a local partner. Overpay your lawyer. Seriously. Henderson says a well-paid local lawyer becomes your fixer. They introduce you to real estate agents, developers, government officials. They help you hire people. They filter out bad deals. Worth every extra dollar.

Adapt to local culture. Do not show up expecting everything to work like it does at home. Find the balance between what you bring and what the local market needs.

Stay under the radar. Just because there are fewer rules does not mean there are no rules. Run a quiet business. Grow over time. Do not be flashy or confrontational with the government.

The Singapore Ice Cream Story

Henderson closes with a story that perfectly captures the whole chapter.

Five years before writing this, he was in Singapore looking at their EntrePass residency program. Someone told him that Singapore officials loved restaurant businesses. Henderson asked, half joking, if an ice cream shop would work. The answer: they would love it.

He did not do it. About a year later, Singapore changed the rules. No more small business plans for EntrePass. They only want big businesses now. The opportunity was there, and then it was gone.

That is the whole point. Frontier markets are frontier because the window is limited. The opportunities exist today. Tomorrow, the rules change. The market gets crowded. The costs go up. The government gets stricter. By the time something is no longer risky, it is too late.

Key Takeaway

Henderson’s big idea is simple. The best time to invest in a frontier market is when it still feels risky. When your friends think you are crazy. When the infrastructure is rough and the process is messy. That is when the returns are highest and the competition is lowest.

If you wait until the roads are paved, the banks are polished, and the Starbucks has opened, you are too late. The early movers already own the best properties, built the dominant brands, and locked in the relationships that matter.

From my own experience, I watched this happen in Eastern Europe after the Soviet Union collapsed. The people who moved fast in the 1990s, even with terrible infrastructure and real risk, built wealth that lasted decades. The ones who waited for things to stabilize found that stability came with competition, regulation, and much smaller returns.

Henderson is not saying frontier markets are for everyone. If you are risk-averse and the idea of paying cash for property in a Cambodian town hall gives you anxiety, he suggests investment funds. Let someone else handle the boots-on-the-ground work.

But if you have some appetite for adventure and either risk capital or youth on your side, the frontier is calling. Just do not wait too long to answer.

Book: Nomad Capitalist by Andrew Henderson | ISBN: 9798461831486

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Part of the Nomad Capitalist series