Starting a business in Thailand

[bendejo]

The outrage of the local people that a falang is taking food from the mouths of Thai children.  Foreigners are allowed into the country so that money can be taken from them.

The very first time I visited Pattaya I checked into my room and went for a walk.  As I was passing a beer bar I heard a gal berating a falang guy with "falang no gip munnee falang no good."  I have taken this to be the unofficial motto of LOS.

 

I have worked in kitchens at various levels when I was young.  Throwing out unsold food in large amounts is heartbreaking.  Any biz involving food opens you up to endless liabilities.  In certain US cities the various inspectors (health, building, fire dept, and others) are notorious, can close you down on a whim.  Yes, you can take it to court and be heard, but by the time it takes to get there you may have realized it was not a good idea, and if you win you cannot sue for damages from the loss you took in the months the case was pending.  I would suspect in LOS these issues are remedied by immediate cash.

 

 

[Mac Mickmanus]

12 minutes ago, bendejo said:

 

The very first time I visited Pattaya I checked into my room and went for a walk.  As I was passing a beer bar I heard a gal berating a falang guy with "falang no gip munnee falang no good."  I have taken this to be the unofficial motto of LOS.

 

That was a location , a premises , where the girls get their income from guys giving them money , its understandable that a girl working there would get annoyed when a customer wouldn't give her any money 

[FritsSikkink]

11 hours ago, Walker88 said:

If you are an owner or director of a Thai business, you do need a work permit, as well as a Non-B Business Visa.

 

If you are American, you can own 100% of the company, owing to the Treaty of Amity. If non-American, 49% is your limit.

 

You need trustworthy Thai partners and a good point-of-sales system. You need CCTV cameras for obvious reasons, including insurance.

 

You need to be on top of all supplier issues, and link orders with incoming supplies.

 

There are many licenses required for any business, so look it up depending on what sort of business you intend to run. You say 'restaurant', so that would mean alcohol, food and music license. There is also a sign tax, but if the sign contains any Thai characters, the tax is less. Good idea to get SHA+ approval, too, as you never know when the next epidemic will arrive.

 

For every non-Thai employed or who is a director, you must have at least 4 Thai employees. There is some slack granted if any employee is from an ASEAN country.

 

You need to register at DBD, provide a shareholder list, at least pretend to hold shareholder meetings, register for VAT payments, make sure your staff is on Social Security, and keep every possible receipt and record (giving copies to your accountant). To open a bank account, you will need lots of documents. Best to just ask the bank. Having more than one bank is also wise.

 

There is lots of bureaucracy, but not many legal issues if you follow the rules. Maybe you will get shaken down from time to time, but a payment usually suffices.

If you are an owner (is shareholder) you don't need a work permit, you talk nonsense.

[Walker88]

8 hours ago, FritsSikkink said:

If you are an owner (is shareholder) you don't need a work permit, you talk nonsense.

That 'nonsense' was told to me by an Immigration Officer and my Thai accounting firm.

 

Each time I go to renew my Non-B Business Visa, the IO ALWAYS asks for my Work Permit, even though I do not work and am just the owner of the company. When I first went to Imm for my Non-B, I explained the entire situation to them....I was the buyer/owner of a company, I would be the sole shareholder, and I would not be working. They then told me, "You still need a Work Permit", which is an entirely different Ministry (Labor). So off to Bang Na I went and got it.

 

Maybe you know something the Immigration Officers do not. You should head straight to Chaengwatthana and let them know.

[Walker88]

As can be seen from my above post, there are differing opinions on what is required. I suggest you ask your lawyer, because the last thing you want to do early on is violate a Thai law/requirement.

 

My Work Permit has a notation stating I am a Director. Work Permits I have seen from foreign employees of other companies lack that notation.

 

The poster who took exception to me either knows everything or suffers from Dunning-Kreuger Effect. As expert as he may be, I still suggest asking your lawyer. Everyone in a position of authority in the Thai govt told me I needed one, so there's that. Perhaps if you are entirely hands off---just the owner, maybe even residing outside of Thailand---there is a way around it, but from the OP post, it seems you will have some input into how your restaurant/business is run.

 

When the bank accounts for my business were opened, each bank needed me, as Director, to come in and sign a few dozen documents, plus I had to have a company stamp to stamp them. The banks also needed my Work permit, even though they knew full well I wasn't working.

 

Again, just be certain what you need or do not need. Lacking a necessity would cost you a lot, so if a Work Permit is not required, make sure you have an official Thai Govt document that states that.

Edited October 24, 2022 by Walker88

[Liverpool Lou]

12 minutes ago, Walker88 said:

Each time I go to renew my Non-B Business Visa, the IO ALWAYS asks for my Work Permit, even though I do not work and am just the owner of the company.

That's because a WP is required to obtain a B visa.   Many foreigners are shareholders in Thai companies but choose other visas that cover their circumstances that do not require WPs.

[Walker88]

Just now, Liverpool Lou said:

That's because a WP is required to obtain a B visa.   Many foreigners are shareholders in Thai companies but choose other visas that cover their circumstances that do not require WPs.

The OP gave me the impression he was not planning to be a silent partner, so that is why I shared my experience. Yes, if he's in Thailand on a Marriage or Retirement Visa, and never plans to get a Non-B, then he would not need to WP. In fact, legally he would have to remain 100% silent, as any input would equate to 'work'.

 

Because I own via the Treaty of Amity, which means I am sole shareholder, I was required to obtain a Non-B. I don't know the OP's nationality, but if he is from the US, he can be a 100% owner, and thus would need a Non-B.

 

I don't see why so many get their panties in a twist when posters with experience offer advice. 

[OneMoreFarang]

On 10/21/2022 at 10:49 AM, racinkc1 said:

Hypothetically, if I invested in a small restaurant/business with my Thai friend, and it started to have success, what immediate legal challenges would I be facing?

First of all, you should ask about challenges and not just legal challenges. If a well-connected person wants to create trouble then he will do that, it doesn't matter if there are legal concerns or not.

 

IMHO the short answer is: Anybody who asks this question in a forum like this shouldn't open any business in Thailand. To open a business and be successful you should know Thailand and how it works. I.e. you should have worked in a restaurant in Thailand. You should know about all levels of the business and the typical ways people run it and the ways people skim money.

If you think you can learn it by doing it and find out what you shouldn't do then that is, IMHO, a very bad idea.

 

 

[BritManToo]

40 minutes ago, OneMoreFarang said:

IMHO the short answer is: Anybody who asks this question in a forum like this shouldn't open any business in Thailand. To open a business and be successful you should know Thailand and how it works. I.e. you should have worked in a restaurant in Thailand. You should know about all levels of the business and the typical ways people run it and the ways people skim money.

If you think you can learn it by doing it and find out what you shouldn't do then that is, IMHO, a very bad idea.

IMHO white foreigners shouldn't open a business in Thailand unless they've had years of experience in running the same business successfully in their home countries. Same advice for buying their gf/wife a business, no previous experience = no investment.

 

As for skimming,

The answer is always stock control and receipts from suppliers and customers, know how much you've bought and the weight of each portion.

Edited October 24, 2022 by BritManToo

[rabas]

10 hours ago, FritsSikkink said:

If you are an owner (is shareholder) you don't need a work permit, you talk nonsense.

If you are going to work, then you need a work permit. You do not need a WP just to be a shareholder.

 

If you try to work without a WP, you will get caught as soon as you irritate someone and they report you to the labor department. Been there, done that. I paid 10,000 B for literally 3 seconds of work on a single day. I was the majority shareholder. 

[DaLa]

On 10/21/2022 at 5:05 PM, Lacessit said:

None. I do know about half a dozen people with businesses, and I've seen the cops turn up on certain days openly accepting money. 1000 baht seems to be the going rate, I don't know what that buys.

Good value in my opinion. Two visits a night, picture on phone sent to my partners phone. Initials of visit in a note book that is in a post box at the entrance. What does £2000 a year council tax in the UK buy me ? Other than a mountain of bureaucracy trying to run my business.

[Walker88]

1 hour ago, OneMoreFarang said:

 

 

IMHO the short answer is: Anybody who asks this question in a forum like this shouldn't open any business in Thailand.

 

 

Mostly I agree, but not 100%. The fellow is just starting out. He may not even know what questions to ask, and certainly doesn't want to show ignorance in front of potential partners. If he gets started by asking on a Forum, he gets some idea of issues he hasn't even considered. If he gets more serious, he will have some idea of what he should then ask a lawyer. Even a lawyer might forget to mention a thing or two, so if an issue has been raised on a Forum, the guy will remember to ask.

 

The Learning Curve has to begin somewhere.

 

There are many negative comments in this thread (not yours; yours is practical advice). There are many people who did start a business in Thailand and who have done very well. I bought a business early on in Covid time. I had never run such a business, though as a former hedge fund manager I have analyzed a thousand companies (and even govts) and kind of know what to look for.....even where fraud takes place. My business is profitable and profits are growing by the month. It's entertaining and I know I am providing gainful employment for some hard-working Thai people. I know other business owners who have done similar things, even in businesses in which they had no previous experience. Knowing other owners is good because we share both ideas and potential dangers we might have run across.

 

One major thing I have learned is that there is a massive advantage being an American, because you can own 100%. No need for a Thai partner. That alone cuts out many possible problems.

 

Navigating Thai laws and even idiosyncrasies is quite possible. Perhaps surprising to some, not all Thais are thieves just looking for an opportunity to rip off some foreigner. I bought in order to have a new challenge, as I'm already set financially. It's fun, and with the proper precautions and care, I recommend it.

Edited October 24, 2022 by Walker88

[Lucky Bones]

On 10/21/2022 at 11:51 AM, Liverpool Lou said:

It depends on what you are doing wrong.   Why should you have any "legal challenges"?

If, as a falang, you are seen to be cutting a local someone's lunch, you are in deep dodo.

[OneMoreFarang]

1 hour ago, Walker88 said:

Perhaps surprising to some, not all Thais are thieves just looking for an opportunity to rip off some foreigner.

Correct.

But then, maybe at home people would trust judges, police officers, people in government administrations, etc. And if there are problems you can go to court.

In Thailand people should think twice about this.

 

It seems another idea of (farang) investors in Thailand is to get an influential Thai partner who is well known to be able to sort out things. That is obviously a great idea - until the moment when that Thai partner maybe decides he doesn't want that farang partner anymore...

[FritsSikkink]

3 hours ago, Walker88 said:

That 'nonsense' was told to me by an Immigration Officer and my Thai accounting firm.

 

Each time I go to renew my Non-B Business Visa, the IO ALWAYS asks for my Work Permit, even though I do not work and am just the owner of the company. When I first went to Imm for my Non-B, I explained the entire situation to them....I was the buyer/owner of a company, I would be the sole shareholder, and I would not be working. They then told me, "You still need a Work Permit", which is an entirely different Ministry (Labor). So off to Bang Na I went and got it.

 

Maybe you know something the Immigration Officers do not. You should head straight to Chaengwatthana and let them know.

A work permit is needed to work. A director of a company who makes decisions is working and needs a work permit. A shareholder who only holds shares and has nothing to do with the running of a company does NOT need a work permit. As a shareholder you don't have an accounting firm for the company, a director would have. It seems you don't understand the difference.

Edited October 24, 2022 by FritsSikkink

[Misty]

On 10/24/2022 at 9:57 AM, Walker88 said:

The OP gave me the impression he was not planning to be a silent partner, so that is why I shared my experience. Yes, if he's in Thailand on a Marriage or Retirement Visa, and never plans to get a Non-B, then he would not need to WP. In fact, legally he would have to remain 100% silent, as any input would equate to 'work'.

 

Because I own via the Treaty of Amity, which means I am sole shareholder, I was required to obtain a Non-B. I don't know the OP's nationality, but if he is from the US, he can be a 100% owner, and thus would need a Non-B.

 

I don't see why so many get their panties in a twist when posters with experience offer advice. 

Even with Amity treaty companies, do you not need 3 shareholders?  I had thought this was the case, although 2 of them may only hold 1 share each, and they do not need to be Thai citizens.  Be great if you only need 1 shareholder.