Sunbelt Asia

#2 Capital Creation? How so?

For example, the state enterprise privatization and recap program is expected to create US$20 billion worth of newly listed or unlisted financial capital for the Thai market till 2005.

The Housing Project for the low income masses will potentially expand aggregate output by about US$25 billion from 2003 to 2007.

The Capital Creation Scheme, in the next 6-7 years, could convert at least US$10 billion of dead capital into pledgible capital and transfer US$15 billion worth of black economy activities into the real economy.

The latest Vayupak initiative could eventually convert several US$ billion worth of dead capital held by the government and mobilize an additional several US$ billion worth of excess liquidity from the banking system. In all, it could add US$7-8 billion, or an additional 10% to the market cap of Thailand.

USD75 Billion, this is lot of money for a small country like Thailand!

Recruitment firms are excellent barometers for overeas recruitment activity - why not conduct a survey Mr Sunbelt?

Yes I agree and the well respected ones along with relocation firms here in Bangkok are very busy at this time and have been since November 2003.

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Granted. So you are looking to the "share issue", not capital contribution

Its not "me" looking. Its the Thai government. Capital contribution is connected to shares issues. However, as for voting rights or profit distribution or liquidation proceeds, that can or cannot be tied to share holdings.

I also heard that you can set up a company that is a 65/35 split.

You could do it as 90/10 as well and have the same outcome.

why am I always hearing that setting up a company to avoid land ownership rules is bad

Some people don't want to have to file tax reports every 6 months and the audit

The main reason, several lawyers don't understand preferred or ordinary shares, including one esteemed member of this forum. He told our client that their was no such law allowing two classes of shares. So much misinformation out there, no wonder it will drive most men to drink!

With all due respect to Dr. Ammar Siamwalla, two main reasons why these are the Golden Years…

1. . In the past several years, projects have been targeted either at converting dead capital into productive capital, or enabling the capital-deficient areas to form capital. These sectors include the urban poor, rural, resources, SME, and government ie: the Village Fund project, the Capital Creation Scheme; Housing Projects, One Tambon Project, SME Development Initiatives, State-Enterprise Privatization , Vayupak Mutual Fund.

All these projects are either in the process of being implemented or are still in their early years, and as they are structured for a multiple year lifespan, the impact has not exerted its full force yet. As well, these capital creation projects are substantial in size, and in their durable impact on the economy and market which will be enormous, around USD75 billion into the economy.

#2 Thailand is reforming the mass manufacturing export model with a thriving collection of local enterprises offering new “exportable” goods and services. These local economic winners are leveraging Thailand’s local skills and resources to differentiate themselves in world markets and thus exert pricing power Both the export trend and contribution of SMEs to the economy are providing encouraging signs that are not hard to decipher. First, goods exports expanded 11.3% in 2002, and despite the setback of SARS, it grew a respectable 11.8% in 1H2003 and 16.6 % in 2H2003. In December exports were up 31%! It looks to grow 15% this year even with the Bird Flu. SMEs now account for about 40% of exports and, more importantly, SME exports expanded at a faster rate than those from the mass-manufacturing sector.

These factors support a long upswing, I see the Thai economy, which only started to speed up in 2002, continuing to grow swiftly until at least 2007-08. GDP growth should be at least 7% this year and possibly 10% next year. This is why the multi-national firms are expanding their staff in Thailand and the energy is in the air.

My Thai wife and I have been to Panama on vacation. In her and my opinion, many similarities between the two countries....

Climate, plantations, cheap taxis, cheap movie tickets, more woman than men.

They sell lots of Rolexes In Panama thought they are real :-)

On the other hand, lots of differences as well…

Very expensive medicine, groceries, telephone service, car rentals

Food is far superior in Thailand. They love salt in Panama. The Chicken soup with plantains isn't bad though.

High crime rate…unfortunately it’s common to be mugged.

Much higher violence. Higher drug trade.

Thailand beaches are much more beautiful.

Panama night life is not in the same league.

Land and houses are VERY expensive compared to Thailand.

You think the people in Thailand have bad motives, you haven’t seen anything yet Gringo! :-)

Preferred shares and ordinary shares issued must have the same par value. If the Thai owns less than 60% of the shares no matter if they are preferred or ordinary shares and the company was set up to own land, this would raise the red flag.

But here it seems to be a special breed, especially to the naive farang who sees a big smile and a hears a big promise and is put at ease.

Yes, I agree... this I've seen happen. I've even seen it up close and personal. Too close, I might add :-)

But live and learn.

As for your personal feelings on Thais in general. Yes I've heard this before and even have experienced it. Still the violence here is a lot less than LA and pick up the paper in LA, you'll find just as much deception, if not more. I have found though many Thais though to be good people. Several times by accident, I've drop money on the street and Thais pointed out I had done so.

As for the bubble, there is established economic theory on the nature of long economic cycle swings – whether driven by asset-credit expansion or by real gains in productivity and productive wealth. Thailand is not passing through a pure asset and credit bubble driven by a pure monetary phenomenon, in my view. I believe Thailand is creating real productive wealth through capital creation. It is starting to reap productivity gains from the newly created productive wealth, niche winners in non-mass manufacturing, and greater economic efficiency through government reforms. The super economic cycle created by Khun Thaksin is a real and very strong business cycle, in my view. You cannot rule out sporadic overheating in the asset markets, this is a byproduct rather than a source of the strong upswing. Thailand is in the golden years at least until 2008 in my opinion. Time will tell, if I'm right.

I do mind SunbeltAsia changing to the Thai way of doing business by lying and telling untruths to consumers.

Dutchy... Care to meet with me? Our office # is 02-642-0213 I know what I'm talking about when I say the Multi-national firms are moving people here at a record pace. The relocation firms we work with are flat out non stop busy as the large firms are expanding, at least for the past two months, this is even with the Bird Flu. They were affected last year with SARS, but not now.

To say I'm lying and telling untruths is very serious allegations. I for one am up to the challenge to prove what I state, and introduce you to people that work with these firms. I did not state that some people are not leaving. I stated others are replacing them, so how did I lie, when it’s fact? Just because what I say is different than your opinion? That’s not what a Forum is all about!

The way, I see it. It’s easy to hide behind a computer and call someone a liar. I'm not hiding and I am even willing to meet you to prove a different side of the story. Sure I could be wrong in the long term but in the short term, the large firms are moving their managers in.

My belief is Thailand is changing… some people would like to believe that the economy will be hurt because of the bird flu and midnight closings of bars. In the big picture it simply won’t. It may have a temporary blimp but in the worse case scenario you still are looking at 6% growth this year. Thailand lets face it, does have an excellent infrastructure and low cost over many other SE Asia countries. They did have the best performing stock market in the World last year for a reason. Again thats my belief but I’m putting my mouth where my money is. I’m expanding as well by going into two more ventures on Sukhumvit. I for one believe in the future Thailand and I know other companies do as well.

By the way, a good economy does not help Sunbelt Asia... believe or not. A recession is better for the business brokerage as people are laid off and are looking for security. They then decide to become the Boss. Twenty years I've been in this industry and more business transfers take place when the economy turns down and buyers become more motivated as they want to buy low. Good times and no one wants to leave their job as they have big bonuses. I for one, don't worry about it, cycles come and go. It’s the big picture I look at.

Greg Lange

02-642-0213

Check it in and you'll find the odds are good, it will have a cracked screen, when you pick it back up. At least it happen to me once and my only time. :-)

how can wiring money from outside the country give you a better exchange rate than inside thailand?

They don't covert the dollars till they reach Thailand. Your bank in Thailand then calls you and gives you the rate which at least in my experience has been much higher than the rate quoted for exchanging one hundred dollar bills. That rate more than offsets the wiring fee charged by your bank.

Location is important, near tourist area or University is the best. We have seven Internet Cafes you can acquire as the owners are selling because of human reasons... partnership disputes, health, relocation. The average cafe makes around 20-50K per month net. Easy to verify as they have the Smart card system and its all computerized. Risk in laws seem to change from time to time in reference to kids under 16 years old playing and hours you can be open. No effect on tourist zones for the laws yet.

We reco to form a Limited company and put the assets in them. We have 5 in house lawyers who can help you on this stage. Only 3,900 Baht for Legal.

She only needs to obtain a Business Registration Certificate from the Department of Business Development of the Ministry of Commerce.

To open a Sole Proprietor acct at a bank...

Original certificate of registration

Application for registration of a business certified by Registry of Business (ROB)

Sole-proprietor’s identity card

Keep in mind, your rights to any repayment of the assets ( unless you have a loan agreement in writing but still good luck) or profits of this "company" is zero.

type of visa can I apply for at the Thai Embassy and how much will it cost.

Non-immigrant visa

single entry

2,000 Baht or USD 50.00

multiple entry for use within one year

5,000 Baht or USD$ 125.00

Also, can my boyfriend get a multiple entry visa even though he dosen't have a work visa, but is a director of our company?

Multiple entry without a work permit is hard to obtain in SE Asia. If the MD writes a letter to sponsor him with all the forms, he should get at least a 90 day single entry.

48 hour week and 13 official Holidays per year is the norm.

pay transfer fees and 'mid rate'. not recommended

"Mid rate" is a higher exchange rate. Transfer fees depends on the bank thats sending but most charge around $31.00. If you are wiring $500 then you are better bringing cash. Around $5,000+ then better to wire.

Exactly Doctor. Can't see one new law that will ultimately effect having a business here if you can't go that route.Various legal strategies work for most every case here, no matter your situation ie: You can't drive straight one km because the road is blocked.

" Go left one soi then right one km then right one soi. " The direction given had the same end result and it was legal. You just need a lawyer that thinks and does not take short cuts. You'll find many cases like this in Thai law.

Swift at least at the Bank of Ayudhya. They give our clients the "mid-rate"

Fred,

Heres the best advice I can give you.

Call your friends or your parents and go back home and get a job there. Save up and then come back in a year or so. Perhaps take some night courses on teaching English.

Thailand is a beautiful and a great place to live if you have money or skills. If you don't, you will find its rather heartless. It will chew you up and it simply put, it won't be a pretty site.

Not the answer you may want to hear and may seem heartless on my advice. I sincerely feel though its the best advice. The timing is not right now. I understand English is not your Mother tongue but the Thai students will appreciate when you get a higher degree for teaching.

Regards

Greg

You don't need any land paper to form a company now. This would come much later.

If you are forming a company to acquire land and do not have a business. Anything more than 39% ownership of the company shares owned by a foreigner will raise a red flag. The Thai government can and have in the past confiscated the land if they investigate and find the company was formed simply to own land.

Even if you own 39% of the shares, you can be the Managing Director and bind the company. Our legal fees to form a company are 3,900 Baht plus VAT.

Although there are no minimum capital requirements, the amount of the capital should be respectable enough and adequate for the intended business operation.

In order to set up a limited company in Thailand, the following procedures should be followed:

A. Corporate Name Reservation

The name to be reserved must not be the same or close to that of other companies. Certain names are not allowed and therefore the name reservation guidelines of the Commercial Registration Department in the Ministry of Commerce should be observed. The approved corporate name is valid for 30 days. No extension is allowed

B. File a Memorandum of Association

A Memorandum of Association to be filed with the Commercial Registration Department must include the name of the company that has been successfully reserved, the province where the company will be located, its business objectives, the capital to be registered, and the names of the seven promoters. The capital information must include the number of shares and the par value. At the formation step, the authorized capital, although partly paid, must all be issued.

The Memorandum registration fee is 50 baht per 100,000 baht of registered capital. The minimum fee is 500 baht, the maximum 25,000 baht.

C. Convene a Statutory Meeting

Once the share structure has been defined, a statutory meeting is called during which the articles of incorporation and bylaws are approved, the Board of Directors is elected and an auditor appointed. A minimum of 25 percent of the par value of each subscribed share must be paid.

D. Registration

Within three months of the date of the Statutory Meeting, the directors must submit the application to establish the company. Company registration fees are 500 baht per 100,000 baht of registered capital. The minimum fee is 5,000 baht; the maximum is 250,000 baht.

E. Tax Registration

Businesses liable for income tax must obtain a tax I.D. card and number for the company from the Revenue Department within 60 days of incorporation or the start of operations. Business operators earning more than 600,000 baht per annum must register for VAT within 30 days of the date they reach 600,000 baht in sales.

Be aware you have Auditing Requirements and Standards. Audited financial statements of juristic entities must be certified by an authorized auditor and submitted to the Revenue Department and to the Commercial Registrar for each accounting year.

Auditing standards conforming to international auditing standards are, to the greater extent, recognized and practiced by authorized auditors in Thailand.

Is that complicated and when do I need to start applying for Businees Visa?

May 30th and if you have your paperwork in order, it won't be complicated for us.

ANd what is your fee for renewal/changing Visa?

7,200 Baht plus VAT. That is to get the new visa and also to turn it into a one year visa,with no additional fee, if you would like to do so ( that is if your company qualifies). If you don't qualify ( 4 Thai employees, 2 million capital, salary for your nationality) then our staff assist you to get the one year MULTI-ENTRY permit. In that case you simply leave 5 minutes every 90 days and don't have the above requirements. This is the law now but it can change as we all know in any country at anytime.

Looking forward to helping you when you need our help.

[email protected]

www.sunbeltasia.com

For many Thailand is still a wonderland. Yes people are leaving like any country but many more are arriving in Thailand to take their place. Many who are working for big multi-nationals (who are relocating top mgrs to Thailand).... right now at a record pace, I will add.

We sponsor potential clients if they are looking at business opportunities in Thailand. They don’t need to make the commitment that will actually acquire a business but are sincere in pursuing the possible idea. If we feel they are serious, we provide a cover letter, our vat papers, and shareholder paperwork and by-laws which are certified originals (Some Consulates require the certification by the Thai government) to assist them obtain the one year multi-entry visa.

I understand some Consulates in Europe will do it from a company sponsoring them in Europe as well ( going on their behalf to start a company )

Our fee is 9,500 Baht for the work permit. So you would have some savings there. On renewal its 5,000 Baht.

By the way, we just lowered our fees on company set-up. Its now only 3,900 Baht. We found we can make a small profit at that level. No lawyer or consultant comes close to that rate. More important, you’ll get accurate advice.

www.sunbeltasia.com

Excellent Post Steve.

As for wages… McDonalds pays 22 baht per hour. Starbucks pays 28 Baht per hour. They do that on the hourly so the employee won’t be calling in “sick” as much.

At Subway, we pay 6,000 Baht monthly for the sandwich artists to 10,000 for assistant mgr. The manager gets 12,000 Baht and General mgr gets 35,000 Baht. We pay monthly to find in our opinion better candidates and treat them as adults. Most do not take advantage of talking sick leave that is not really the case but probably 10% of the employees do from time to time. We have found though in these cases they catch flack from their co-workers as they appreciate the system and don’t want it changed.

In a typical restaurant, the typical waiter/waitress gets 5,100 to 6,000 per month. Some get the entire 10% service fee to the kitchen staff and dining room help and other restaurants pay a portion or none at all.