Sunbelt

http://www.bangkokpost.net/News/08Jul2003_news07.html

Bangkok Post says only “Fear of teen abuse shuts down `Ragnarok' " which will be for two months between 10 pm to 6 am.  According to this paper, the adult areas of Internet Cafes should not be affected but you never know about any new laws.  If hours were shorten, the girls would just get up earlier to write about the buffalo needing tennis shoes.

K. Stopper,

Yes this you can do! Checked with three lawyers in our firm and they all said " Yes. This is ok"

That’s a very Good business.  We just had three Indians in my office for a closing on some real estate. Two were brothers and one son was all tailors. The brothers started over 40 years and owe their wealth to the American GI's. The Chinese use to own the Tailor shops but the GI's needed someone to speak with English. The Chinese would have the Indians speak English and measure them. The Indians then had the idea, we can do this ourselves. Soon the Chinese were the ones measuring and the bosses were the Indians. That’s how they got started. The rest is history.

No Tailor shop in that area right now in our portfolio. But will have our staff make some calls.

K. Sev,

Apology accepted. Thank you.

Could you be so kind to edit your response as you now know what my response was referring to. How he could GET a work permit and why the title was important.

Thanking you in advance for the edit.

Regards,

Nui

I agree the more funds you have in reserve the better you are.

However the big advantage in investing in an existing business and the consensus of business professionals clearly support this that 70% of people investing in a existing business are winners versus the 20% that win starting a business one up.  The reason is simple.

The cash register ringing starts from day one. You know already what your expenses are rather than having any nasty surprises and delays from contractors, suppliers. You have a good indication on how the business model is already working rather than surmising on an business plan with a start-up. You have trained employees in place; the weeding of unproductive employees has already happen in most cases.

The other big advantage of investing in a existing business is you are looking at 10-15 or more businesses and picking out the best one. When you are starting up a business, you can only guess if it will be successful. Looking at existing businesses you're not going to pick the one with the least # of customers! With a start up you can only guess with educated research, what will happen with that one business.

Cash flow on start ups will usually be a problem as when you open the doors, you realize you still have to get the word out about your great product.

With an existing business, the dirty work has been done. Inflows from day one are coming in.

On franchises the odds are also high of being successful. Some studies show 72% and a couple states its closer to 92% that are still in business after 10 years. The reason for this is you are emulating a successful business model. The Franchisor won't grant you a franchise unless you will follow their system and you have capital reserves.

To sum it up… if you want the highest odds. Invest in an existing business or franchise. You have a positive expectation.

Starting up a business, double what ever investment you need. As you are looking at negative odds with start-ups and cash reserves is #1 reason for failure. If your business is not working after 6 months and the handwriting is on the wall. With your capital reserves you can change gears and go in a different direction. Don’t have an ego. It’s all about survival and seeing what works. If that means hiring a business manager then do it. The name of this game is making money.

2 million is more like $48,000.

Too have 2 million registered capital, you could put up 25% in paid up capital the first year (500,000). The managing director then could take a shareholders loan for 1.5 million Baht to make up the difference. The director would need to pay interest on that loan every month.

Another way is if you have software you developed that also could be valued at a certain price to offset the difference in the paid up capital.

The problem lies in an investment of 500,000 Baht. Owning an existing business you would be looking at a return of 200,000 Baht per year. Starting a business up would be a huge gamble with such limited funds.

On an investment of 1 million, as a rule of thumb, you would be buying at a multiple of 2.5 earnings. No guarantees and certainly depends on your skills as a owner, etc..but the rule of thumb would be a return of 400,000 Baht. Most foreigners could live a modest life in Thailand. Some even could live like a King, just depends on your personality.

May 2002

http://www.thaivisa.com/518.0.html

When did this law get past down to the Labor Department officers and they were aware of them? We started getting more than one work permit for clients on just 2 million registered capital  around February 2003

Dear K. Roger,

"That the Employee has to Register at the Tax Office and

show that he/she is paying Income Tax on the 35,000

- 45,000 Salary (How much would the Tax be?)"

I was wrong. Its 30,000 income per month for a single person.

The tax on 30,000 Baht is 18,000 Baht. When you would renew your work permit, the Labor Dept would check if you are paying taxes  

"AND the Company must have 2 Million Baht (is that correct?)

in the Bank to obtain a Work Permit for EACH Foreigner"

Not with the new laws. This link expains.

http://www.thaivisa.com/317.0.html

To be eligible, foreigners must DO ONE of the following: Note. it says ONE of the following...

- Serve workplaces with registered capital of at least two million baht. One foreigner can be hired for every two million baht of capital.

- Serve workplaces which have paid taxes of at least five million baht in the past three years. One foreigner can be hired for every five million baht in tax.

- Serve export firms which bring in foreign currency of at least three million baht a year. One foreigner can be hired for every three million baht in income, up to a maximum of three foreigners.

- Serve workplaces which employ no more than five foreign workers, where the firm observes a ratio of 50 Thai workers for every one foreigner.

- Pay at least 18,000 baht in personal income tax in the past year.

Foreigners who have not worked here before must produce documents from potential employers confirming they will be paid at least 30,000 baht if they are single and 45,000 baht each if they are married.

"If so, do you just have your boss write a letter and then go apply for your permit?

I know people that work on the QT, but to get a permit and work on the books would save some running to get your tourist visa renewed."

I just reread the full original question. The poster ask about getting a permit two times. We STRONGLY advocate NOT to work without a work permit. To say we do...sevinnow, has me a tad concerned!

"Okay, so that's 2mill. baht per. person as an investment for each farang in a bussiness to get a type B visa/ work permit.

That would allow us to legelly make money over there."

The NEW rules are friendlier. You can get two or three work permits on  just one 2 million baht registered company. The Managing Director has to write a letter he will pay you 35,000 baht per month. The foreign employee will need to pay 18,000 Baht tax per year. If the officer knows the new law and most do, you do NOT need 4  Thais for every foreigner. You still have the requirement of 4 Thais to one foreigner on the one year visa.  However, for a one year multi-entry visa, you do NOT have that requirement.  

“If we invest that in a Thai business does the taxes go up for the Thai people who own it?”

The flat corporation tax is 30%. Does not matter how many people work for you. However you as the employer would have the extra cost of supporting a foreigner when you could PERHAPS use several Thais at a lower salary and get the same skills. I said " perhaps!" all depends on the talent needed

And sooner or later they end up in the "Monkey House" because an "old friend" reported them to immigration for working without the work permit.

Sunbelt encouraging people to work without the correct visa in place.......sponser or not ..you are out of order!

WHERE does it say in my post" NOT to get a work permit? "

The question was

Can you work legally without being an owner, in a pub?

My response was...

YES. I know of many. They are called the General Manager, Director of Development, Landlord, Director of Food and Beverage. Just never call them a “waiter” :-)

Lets try this again...

The question is "can you work LEGALLY without being an owner in a pub?

The answer is yes. I NEVER said not to get a work permit so sevinnow you're out of order!  In fact thats why they are called "General Manager, Director of Development, Landlord, Director of Food and Beverage." For their WORK PERMIT! If they are not getting a work permit, what does it matter what they are called?

In the future please read CAREFULLY what is written. Thank you.

So if I were to obtain a letter from a Thai business owner who runs a bungalow/Bar/Restaurant.

Requesting that I be allowed a type B visa to help run the business, that could get me a type B? Do they have to put up any money for employeeing me or is it possiable to say that I would be working for trade of room and board.

They would have to state they are employing you for minimum 35,000 Baht per month. If married 45,000 Baht.

You are not actually changing from an “O" to a " B" The "O" expires in a year then you apply for the "B"

Why not do the "B" the first time?

The reason is your company has not been set up yet. The applicant is simply exploring the idea of owning a business. If he decides to own one. Then he forms the company and can apply for a work permit.

Without forming the company, who else from another company would give the applicant a letter stating they are looking to employ the person at a set salary? This is needed for the "B" visa and is not the requirement for the "O" visa. We've had many cases like this and the Consulates give the "O" multi entry visas. Even when asking for a non-immigrant visa. They stamp "O" and you have no problem getting the work permit because it’s a “O”.

The bottom line the "O" visa saves you the trouble and expense of forming a company before you decide that’s 100% you want to do.  The other advantage is in your home country you can apply for it without coming to Thailand and setting up a company first. You've eliminated an extra trip to the border and getting just 3 months versus one year multi entry.

If you have a limited company already then of course you would simply apply for the “B”

Can you work LEGALLY without being an owner, in a pub?

YES. I know of many. They are called the General Manager, Director of Development, Landlord, Director of Food and Beverage. Just never call them a “waiter” :-)

You do not need a "B" visa in your passport for a work permit. You also can have a “O" visa for the work permit.

"O" is for other. Yes O can be for supporting your family, can also be for retirement but it’s also for looking at business opportunities before you set up a company.

When the “O" non immigrant visa expires then if you want a new work permit, you must apply for a "B" non immigrant visa to keep your work permit alive. However that can be even one year down the road.

What problem is that then? You simply apply for the “B" visa then. Why would you need an expensive lawyer?

Some landlords ask for key money so they can get money without the Land Bureau knowing about it. This way they evade paying tax on that amt.

Many businesses we transfer don't have key money. Others however do require it especially in prime locations. Just depends on a case by case.

As for you not knowing about key money? How our firm does the business transfer, it would be impossible. The lease is in your name in 100% of the cases with asset purchase. The old lease is torn up.

Only in 25 million baht transactions or over have we ever done share transfers and nothing happens with the lease. It stays with the corporation that you are now becoming the owner of. Still you would know the key money that’s been paid.

What the current lease is in the seller’s name… really means nothing, in almost all cases in the end. The old contract with the seller is torn up and a new lease is put in your name or your company’s name by the Landlord of the building. This is almost always the condition the buyer puts in the offer to purchase the business and is given a three year rental term plus the right of renewal for an additional 3 years. This is considered a long term contract in Bangkok.

Right of renewal is better language in the contract for the Lessee than just a option.

If you are looking to obtain a lease in certain prime and famous areas, it may be only 1 year with the option to renew for an additional year. The contract rolls forward every year but you could be out in just 2 years. That’s what the family (Landlord) had asked for and the owners if they want to have a business at that location, have no option but to comply.  In reality if don’t want to, someone else will! There is a big shortage of space in these areas. Have any owners ever had a problem in say Patpong? Not that I know of, I understand they roll over like clockwork. But what has happen in the past is no guarantee it won’t change one day! I know one bar owner where he has a lease since 1964 and the Landlord still refuse to grant anything longer than a one year renewal.

Still 3 years plus 3 years for the right to renew is a good contract and is usually the best you can get. We’ve had clients get up to 15 years with five 3 year terms but they are very rare! With Land, 30 years is no problem.

The reason why three years for retail is considered long term is more than 3 years has to be registered with the Land Bureau then the landlord has to pay 1.5 months out of the year in tax. Hence the 3 year is quite famous for no registration with the Land Bureau. Also the Landlord now has the chance to increase the rent 15- 20% every three years.  Compare this to the Western World where the normal lease length is 5+5+5 and a rent increase of 12-15% every 5 years.  This means in the West the average rent goes up 32% in 15 years while in Asia it can be over 100%. This also does not take account the key money or tea money, Asia is famous for.

So on the surface it looks like the landlord in Thailand is getting quite rich! He however still is not at the 1/100 (rent to selling price of a building) in the West. It’s more like 1/200 so at that ratio, rent is still cheap here.   However many people shopping for land and buildings to own in Bangkok exclaim “It’s cheaper in downtown London” and it is! Real estate in Bangkok and Phuket is quite expensive. It is even expected to increase an additional 25% this year. Its supply and demand at work!

By the way,  the USA rent cost to the fast food gross sales is  9 -11% and here you will be surprised to know many of the food courts in the Malls charge 30% of the gross or even higher for rent! You might with tough negotiations get 22 -25%.

Have any idea anybody makes money in the malls if your rent cost is a high percentage of your gross sales in food?

It’s not Food cost! The raw material is 28% -32% in the West and in Asia its 25% -40% (depending on import food)

The key difference is payroll. In the West, expect labor to be 30- 34% of the gross. Here it’s around 6% -10%.

That’s how the cash flow/ profit on average (profit after all expenses except for depreciation, tax and owners salary) is 20 -30 % in Thailand and in the West its 10- 15 %.

Which locations make the most baht? The retail store in the prime areas usually does better. The locations are hard to come by but if you can get it, don’t fletch, they are worth the Kings Ransom. People won’t walk far in Bangkok to get to you!  

In my opinion, two other ingredients are required to owning a winning business. Good management and also look for a business with a good track record if you have limited experience. These in my opinion are the three ingredients to owning a winning business…. location, management and track record.

900 Baht per Sq.m. for Suk Soi 4 to 6

Suk 23 franchisee went with Silom instead. Maybe another one will go there. I don’t think so though.

Location is everything. 3 reasons why Subway did not succeed in "97" 1. Location ( two were in strictly Thai areas and the other on Suk 26 was average at best)2. Menus in English only 3. "97" crisis

The brand awareness is way more popular now and lets face the sandwiches are delicious!

We have one listing this morning, the rent is just 27,000 Baht for 32 Sq.m. and is steps away from there. The service business is generating 3.6 million gross. Labor is 60,000 Baht for six employees. Net profit is 2.4 million. For sale for 2.1 million Baht. Been in business 6 years.

Best of luck Geroreilly!

Woke up one morning, a couple months ago, and decided to get in the sandwich industry as well. Our firm has been representing Subway franchisees and after a lot of research realize their is a need here for healthy fast food.

As a result, Subway will be coming to Bangkok. I just completed my training in Brisbane and will be the Managing Director for six locations. One location that will be opening in July is on Sukhumvit Between Soi 4 and Soi 6. Another Subway franchisee is opening in the Patpong area also July 1st. The other 4 locations will be in Phuket, Pattaya and tourist areas of Bangkok. The location at Nana will be open 24 hours.

It's about time for a good sandwich in Bangkok. In the States their are now more than 1,000 Subway restaurants than McDonalds!

This again may be true. But I only have to register for VAT within 30 days AFTER I achieve THB 600,000. By then I will have recruited an accountant who will take care of it!

That is of course according to The Ministry Of Foreign Affairs

In order to get a work permit, you must file for the VAT first. You also must file for the work permit within 90 days of company registration if you're the managing director or you'll need to start all over again [/b]

are you saying that under the Treaty of Amity for Americans, these are the only restricted occupations?

Yes

Yes

By the way on the 6 restrictions for Americans, this was the USA's idea not Thailands.

Under the Amity, the USA in return gives Thais the chance to own a business in the USA under the E-2 visa. One of the reasons why the third largest population of Thais can be found not in Thailand but in the USA.

Only the following business activities are excluded from protection under the treaty.

communications  

transportation  

fiduciary functions

banking involving depository functions

exploiting natural resources or land  

domestic trading in indigenous agricultural products

Tour Guide is not one of the restricted businesses. You simply become the Managing Director.

Per your request...

Government fees are

Duty stamp 210 Baht

Step 1 Government registration 1,000 Baht

Duty stamp for cap registration 800 Baht

Capital registration 10,000 Baht

Tax ID and Corp ID is 100 Baht

VAt 1,000 Baht

Work Permit 3,000 Baht

"B' or "O" visa is 1690 Baht

Total Government Fees is 17,800

Our Legal fees our Lawyer charges is

Company registration 7,500 Baht

company stamp 500 Baht

Tax Id and Corp ID 3,000 Baht

VAT 3,000 Baht

Work Permit 9,500

"O" or "B" Visa 7,200 Baht

Total Legal Fees is 30,700

Total cost with Government Fees is 48,500 Baht

Hours for a Lawyer who has been doing it for 15 years.

Company registration 3 hours

Waiting in line 2 - 8+ hours

Corp ID and Personal ID 1 hour

Waiting in line 5 hours+

Vat 2 hours

Waiting in line 1 hour

Work Permit Preparation 2-3 hours

Waiting in line up to 5 hours+.

B or O Visa prep 1 hour

Meetings with Client 3 hours+

Travel time 6 hours+

30 hours+ equals less than 1,000 Baht an hour. Then you have secretary, assistant, telephone, rent, etc etc. That’s why we know it’s a loss leader for our firm and understand why others must charge much more ( 100,000 Baht+)  or reluctant to do it at all.    

For someone who has never done it before but is getting help from a knowledgeable source, will surmise it will be around 180 -200 hours. (You’ll find you are always missing something and no one had told you. Back to get that step done, wait in line another 5 hours and find you’re missing another step. Back again and another 5 hours. Another time the forms are handed back. Somebody will tell you one thing, then you're told something else. You get the idea.)

Please keep track of how many hours it takes you. I’m curious how close I come to the 180 hours. I sincerely wish you luck but want you to know the adventure and frustration that lies ahead so you don’t get turned off to Thailand. I'm rooting for you as well as our bread and butter is in business transfer not company legalwork. If  you find a easier way, let us know. Just remember, You may want to bang your head on the door but smile. You're in Thailand!  

By the way, you'll find the monthly Thai accountant here will run 4,000+ Baht a month. English speaking 8,000 + per month. The annual audit will be 20,000+

Dr_Pat_Pong,

Actually the e-mail was from a person in  Los Angeles, Calif. who was told he needed a letter from the Department of Employment about an work permit for a "B" visa and blue stamps. So even the USA can be tough.  

I heard of another situation in Italy with them asking for orginal blue stamps for the visa. Anybody else hear of this? Think it boils down to a case by case situation how tough they want to make your life.