If you are looking to get involved in the teak business, as well you should be, you have several options ahead of you. You can go to the home of teak in southeast Asia, where the world’s most valuable, old growth teak exists. You can travel across the ocean to the western cape of Africa and try your hand at obtaining a teak parcel in Benin or the Ivory Coast. Your third and final option would be to catch a plane south of the border, to Central or South America.
Now, investing in southeast Asia may seem like the most attractive of those three options, and this would be true, if it were actually possible to invest in any of that teak. Recent government bans on felling old-growth teak, as well as bans on allowing foreigners to invest, have all but closed this door as an investment opportunity. Africa may seem like a good option as well, until you encounter all of the red tape you’ll have to cut through to become a teak owner. This is if you can even find a legitimate teak investment option in Africa (a prospect easier said than done). This leaves you finally with Latin America, where teak is for sale and easily available. Latin America really is the world’s most investor-friendly region for teak investment. Read on to find out exactly what makes it the ideal region of the world for your next teak investment.
Go Where Businesses (Not Governments) Own the Teak
The reason that Latin America is the best region in the world for a teak investment is simple: teak is owned privately here. It is for sale. It is easy to acquire.
Other regions of the world where teak is grown, such as Africa, have the majority of the teak owned by the government. This makes it incredibly difficult to make an investment in teak in these countries. If you can find teak that is for sale, you will then need to jump through an incredible amount of needless and redundant government red tape. Not to mention, there is the issue of trust. Can you really trust a foreign government to uphold its end of the bargain? If you invest in a private corporation, and they try to double cross you, there are courts, both domestic and international, that you can take your claims to. If you enter into an investment with a foreign government, and they double cross you, they are the courts, and you’d better believe you’ll see no justice there.
Returning to the aspect of availability, much foreign teak is not even up for purchase. For example, the four countries where teak grows naturally, India, Laos Thailand and Myanmar, all have quotas or even outright bans on the felling of natural, old-growth teak, and similar restrictions on the logging of plantation teak. In addition, there are regulations on the exportation of that teak, meaning that even if you were able to log some, you may not be able to get it out of that country. Some of these governments even have laws, such as Myanmar’s SEE Law, which specifically forbid foreigners from being able to invest in teak within their borders.
Finally, we come to Latin America, where teak is primarily owned not by governments, but by corporations and by small holder enterprises. This makes an investment into teak in Latin America one of the most transparent and simple processes in the world. Everything is clean and legal, and there is not excessive red tape or back door handshakes with government officials to worry about. In addition, because all of the teak in Latin America is plantation, as opposed to old growth teak, the owners are free to cut it and sell it as they please, without government regulations interfering.
Owners of World Teak Supply
Forestry and Agriculture Organization of the United States of America, 2010
Basically, if you’re looking for an easy, clear, legal process to become an owner of teak, then Latin America is where you want to go.
Get Residency While You’re at it
Now that we’ve explained how the governments of Latin America don’t involve themselves when it comes to investing in teak in these countries, lets now talk about how the governments of Latin America do involve themselves when it comes to foreigners buying teak in their countries.
One way governments like to involve themselves in the process of foreigners buying teak within their borders is by creating generous and easy to access residency programs for the foreigners investing in their nations. These programs are all of course 100% voluntary, so don’t have any worries there. But once you explore a few of them, you will realize that you don’t need any kind of coaxing to want to involve yourself in them.
The Friendly Nations Visa is a program towards permanent residency in Panama that can be secured through the purchase of a plot of teak. With your initial investment in teak (which can be as low as approximately $15,000) you will be well on your way to receiving permanent residency in the tropical nation of Panama. After presenting a few choice documents, such as a copy of your ID and a list of your dependents, the final step is to actually apply for and obtain the residency. This will require approximately $4,500 in legal fees. All in all, permanent residency in Panama, as well as a high-return low-risk plot of teak, can be yours for approximately a mere $20,000. This makes the Friendly Nations Visa one of the cheapest permanent residency programs in the entire world.
Teak is one of the most lucrative and low risk investment options that exist in the world today. It is surprisingly stable, and insulated from the types of market fluctuations that make other investments little more than calculated gambles. Teak has shown strong and stable growth for decades.
If you are interested in investing in this amazing wood, there are a few regions of the world to do so in, but none is as simple and investor-friendly as Latin America. Whether it’s the fact that, unlike the rest of the world, the majority of teak in Latin America is owned privately, or it’s the generous residency programs available, Latin America truly is the most investor friendly market for teak in the world. Visit Teak Hardwoods to learn more about your options for investment in this valuable asset class.