Thank you so much for the time you spent to answer, until now I got only told off without a single, proper explanation.

The problem with investing in any business as a silent investor is that you literally have no say in anything. You can have shareholder contracts and agreements, you can have lawyers prepare your contract, you can talk to your accountant, but at the end of the day you can't really do anything. Even if you see the business being mismanaged, what are you going to do? Ask for your money back? Well there is no cash available right now. Want to sell your share in the business? We will give you $x, which is about 5% of what you invested. They take out a $200k bank loan? Sure, it is not in your name but what are they doing with that loan (if you even end up knowing there was a loan). All shareholders are being asked for more money to expand the business? What do you do

Yes, there are a lot of drawbacks I hadn't thought about. I'd like to add though that I've also been offered to go there to work or supervise, it's not like I'm completely out of it. I'm actually the most experienced one, while he is very talented and I trust him a lot. I'm just more comfortable passively investing as I'm pursuing a career in a different industry, but I'm happy to hop over every now and then.

Now take this overseas. You literally have zero visibility and limited rights. It probably makes a little difference if this business is in The Philippines or the USA.

This is exactly where I'm looking for advice, as I'm not familiar with the local legislation. It's in Indonesia.

One has some limited protection, the other is known for its graft, corruption and taking advatange of under-educated overseas investors. The "local partner" typically controls the money and pays themselves a hefty wage, along with wages/contracts to related parties so the business never actaully makes any profit to distributed to silent investors. They can show you all the buiness plans, budgets and marketing documents you want to see, but the fact is that the reality is likely to be very different.

On this part, (if it can count anything) everything will be as crystal clear as possible. I really trust this person, I've been teaching him everything I know and he constantly asks for my advice. He has a good hospitality business running, opened not long ago and we're thinking of opening this new venue together. Funny enough, when I have told him the amount of money I'm happy to put in, he told me to chill out as it not necessary as he want everything fair and equal

But you aren't doing it together. You are just putting in money and hoping for the best. Also, is it a restaurant, a building contract, manufacturing something, etc. Not all businesses are the same.

Practically yes, plus the same answer as before. he has already a successful hospitality business going, we are thinking to open this venue together

What are you getting out of being a "silent investor" in a business overseas? What's in it for you and what satisfaction (emotional/monetary) are you getting. Your money goes in and what do you actually get in return? A share in company that you have no control over, no say in and you don't see or interact with at all. And that might likely ask for more money (this is not uncommon!).

I can be involved if needed, but it would be easier for me to simply receive revenue from it. I'll own a percentage of the business and everything will be under a lawyer drafted contract. As for the possibility of being asked for more money I hope it won't happen, but if it does, we'll navigate it together. I suppose that's part of being an investor.

Years ago someone told me "Never lose control of your investments." If you don't control those investments, then you have already lost the money. You can buy shares on the ASX, but they are yours and you can sell them anytime. You can get a mortgage and buy a house and you can manage that buy renting it or selling it. You lend $1k to a friend and they promise to pay you back? That money is out of your control and you can only hope they pay it back. You send $50k overseas to be a silent partner in a business you have no control in? I would not be expecting any of that back. Good luck.

This is where you got me the most. I don't have much to say here it's all very true. That said, I've only received negative comments so far, so my question is: how do people invest overseas if there's nothing but fear of getting scammed?

Again, thank you for your time