Business Difficulties As A Farang

[twix38]

Seems to me as we enter high season that many of the lower/middle end business operators (go-go, beer bar, small niche business, some restaurants etc) are having a particularly tough time to earn enough after costs, salaries and sundry expenses.

It has long been apparent to me that most business options here are usually non starters and establishments often change name and ownership to the next mug punter, but I am now of the opinion that even reasonable business have their work cut out breaking even or turning a worthwhile profit in Pattaya (and in Thailand).

The reasons are many and include over supply in certain areas and lower visitor numbers. Owners thinking they can do a business that they have little or no experience in and would never try at home. The totally unfair and unequal treatment of foreigners in every sphere of life and business life (corruption, rules on minimum tax paid and earning requirements linked to Business visa, costs, language and cultural barriers etc).

I just want to advise people that in my opinion you must think very hard before investing your time and hard earnt money into a business opportunity here. Then kick it into touch, if you need to make a profit.

The macro political and increasing zenophobic attitude and the rules and regulations make opportunties a poor bet.

Keep funds principally in your local currency and generate an income from an asset abroad (like renting out your home in UK or wherever). There are rules and requirements for everything here and they are seldom clear or worthwhile for a foreigner.

Unless you have a Tor Tor 3 (given only on property purchases) then you cannot even take your money home with you. (50k Baht maximum permitted out of country).

This is just touching the surface. It is Thailand and so it is up to them. It is up to you, if you take the risk. My advice is generally don't even give it a second thought. 7 out of 10 fail completely. 9 out of 10 are dissapointed and regret the decision.

This is Thailand and not Farangland. It is sooooooo far tilted in favour of Thai's that when you think you know the rules and laws and the Foreign Business Act and how to deal with the requirements and corruption. You still don't because things change. Some rules get enforced and some don't - until later that is when you never expected to be caught out.

If I had to set up a scam to relieve foreigners of money, I would give them hope and then slowly remove their opportunities with the kind of laws, amendments, visa rules (and amendments), FBA and amendments and none enforcement and then enforcement....and well, I'd name my scam franchise "Thailand. The land of smiles"

There are exceptions. Do you feel lucky?

I estimate 1 or let's say possibly 2 in 10 foreign buisnesses really succeed and have a content and a profitable owner who does not regret his decision. The rest (the other 8 or 9 ) do regret or lie to themselves and others. Then sell to the next mug punter.

Edited December 3, 2007 by twix38

[sweetchariot]

Sounds like you are a tad bitter - were you one of the 7 out of 10, or 9 out of 10?

I know many guys with successful businesses here, but they invested a proper sum to buy a reasonable business. It's mainly the guys who think they can spend a few hundred thousand on a crappy beer bar, and live comfortably for the rest of their life, who are the ones disappointed/ failing.

[soundman]

Some good threads here on SME business in Thailand.

Soundman.

[twix38]

No, I have never had a business here, although I know a few owners (not beer bars, but medium specialised business) and I can see the difficulties and the hurdles and requirements and the empty places and dead places and lack of customers.

I did not just say it was all a Thai fault, I mentioned other factors too. The tipping point factors of a successfull business are the extras added by "Thailand. The land of smiles" franchise though.

As far as good businesses go where a proper business plan and large investment has been made. These do have a better track record and success rate, but still not good enough for the risks and are totally unacceptable with the grossly uneven playing field a foreigner is asked to play on. Most do not or cannot commit this amount of funds and of course the risk is also much greater as the investment increases. Not something I would ever entertain, however you want to view the franchise. I choose to conclude it is not in a foreigners best interest as a general principle of wealth creation or protection.

Trouble is that many of the real killers in business are not apparent at the start. I am thinking of rule changes, visa problems, spouse problems (they have rather a vested interest in many cases because of Thai law/language etc), non - enforcement to later change, corruption, culture differences, and more

hey! it's just not a smart idea for the average Joe. END.

I am lucky enough to be an observer only and this is my general conclusion.

Too many issues and risks on both a macro and a micro level. Risk/reward if you have to make a profit is just not favourable on starting out. Hence, why take such a big and unfair risk on??

Edited December 3, 2007 by twix38

[soundman]

hey! it's just not a smart idea for the average Joe. END.

It is not a very smart idea for the "average joe" to get into business anywhere, let alone Thailand.

Statistics in most western countries show that that on average 80% of small business go bust within five years. Same statistics show that 5% succeed in the long term & 95% are relegated to professional careers, service or labour jobs.

So the argument I put forward is why would it be any different in Thailand?

95/5 rule is universal - 1 in twenty will do well, three in twenty will get by, another three in twenty will struggle & the rest belly up within eighteen months.

Soundman.

[twix38]

Yes, I know the failure rates for new business is dire everywhere.

My point is that in Thailand normal start-up business difficulties are further compounded and in very many ways make it even more likely to fail. A foreigner has extra requirements which frankly abound in many different forms, requirements and changes which further hamper his abilty to succeed and which he must additionally contend with/pay for/accept.

When was the last time a rule or law was changed that benefited a foreigner? Especially in business or to invest here?? Most of any rule changes are either smoke and mirrors or making it harder for foreigners.

I also noted some usual problems of business that exist here and added the Thailand effect on top

Your average Joe does come here and try, that's the exact and critical problem.

My aim was to warn him that although it may actually look easier/cheaper than at home. This is a falsehood.

It may well be cheap in comparision, but it is actually harder to succeed than the odds even you quote and stacked very much against him specifically because he is a foreigner. It is also not fully or readily apparent at first, or convieniently made workable with both clear and enforced rules.

I can't say I like any situation where I start a 100 yard race some 20 yards behind the locals and I am having to run mine uphill. I may still succeed, but the chances just got a whole lot less likely and the sums of money and repercussions involved can be crucifying. DON'T DO IT is my general advice and if you do, then make sure you know exactly what you are doing and letting yourself in for and that I think you are a fool - generally speaking.

Best of luck and keep smiling.

hey! it's just not a smart idea for the average Joe. END.

It is not a very smart idea for the "average joe" to get into business anywhere, let alone Thailand.

Statistics in most western countries show that that on average 80% of small business go bust within five years. Same statistics show that 5% succeed in the long term & 95% are relegated to professional careers, service or labour jobs.

So the argument I put forward is why would it be any different in Thailand?

95/5 rule is universal - 1 in twenty will do well, three in twenty will get by, another three in twenty will struggle & the rest belly up within eighteen months.

Soundman.

Edited December 3, 2007 by twix38

[bino]

(50k Baht maximum permitted out of country).

This isn't exactly correct.

50 K is the maximum cash / legal tender that you can take out of Thailand. However, you can wire transfer larger amounts without difficulty.

[twix38]

ok, well I may be wrong, but I think legally there is a form of exchange control rules here that limit the amount of Baht leaving Thailand to 50,000 Baht without paperwork (Tor Tor 3). I don't know if itis only for cash.

My understanding is legally this is the limit to take out of the country without paperwork showing it was remitted originally from overseas (TT3)

I have heard of larger amounts being difficult and needing TT3 or not actually legal, even if it can possibly be done by wire/TT or not.

The actual point remains, that it is not straightforward and therefore it is, as I correctly stated, yet another issue to bear in mind if you thought to bring in your savings to Thailand.

Thanks and maybe somebody else knows for certain if this is just for cash and how much can be wired out etc?

(50k Baht maximum permitted out of country).

This isn't exactly correct.

50 K is the maximum cash / legal tender that you can take out of Thailand. However, you can wire transfer larger amounts without difficulty.

Edited December 3, 2007 by twix38

[plasticpig]

(50k Baht maximum permitted out of country).

This isn't exactly correct.

50 K is the maximum cash / legal tender that you can take out of Thailand. However, you can wire transfer larger amounts without difficulty.

So when was the last time you transfered 10 milion baht out of thailand.

with out any questions.

Please tell

[monty]

I'm maybe fortunate to live here quite a long time, and to know the country along with its pitfalls and advantages quite well.

In general, I kind of have to disagree with the general consensus that doing successful business is harder over here then it is in the West.

I might be going out on a limb here, but I reckon that for a person with a few years under his belt in Thailand, and having a bit of brains, doing business actually is easier over here compared to the West.

For starters, general costs are much lower over here, and depending on your line of business profit margins can be quite high.

Most people tell me the paperwork is madness, but I feel it is soo much easier and cheaper here then it was back home.

Licenses are so cheap here, selling of alcohol, cigarettes, food come to a couple of thousand Baht per year!

People complain over getting busted because they do not have the proper licenses (copyrights) to play music in their place. A license costing maybe only 5000 Baht/year, and which would cost maybe 20 fold or more then that in Europe...

Most if not all problems can be solved by a little donation, keeping things go smooth. If you have moral objections about backhanders, then you shouldn't be doing business in a country well known to be one of the most corrupt in the world!

The tax system is quite reasonable and very loosely enforced. If they think you're being a bit skimpy on your tax payments, they are very open to some negotiating to come to an acceptable compromise, very unlike for example the US IRS sharks, known to haunt their nationals all over the world...

A few of the difficult things are basically the cultural and the language barrier.

Again, one should not try to attempt to do business after 2 weeks of holidaying over here. Learn the culture, learn the language how hard it might seem. Talk to a successful non-Spanish business owner in Spain, and you'll quickly learn he gets by pretty well in Spanish!

Work Permit and visa seems like a big hassle, but it can be done, although you might have to do a visa run every 90 days....

Again, going out on a limb, if you discount the silly business owners (the ones buying beer bars after their first holiday thinking they will have a life of women and booze with heaps of spare money on top of it) I would think the survival rate is higher then it would be in the west!

Unfortunately, the silly business owners make up 75% of the business you see in Patters, hence the skewed image one gets of seeing almost each and every business fail.

[monty]

So when was the last time you transfered 10 milion baht out of thailand.

with out any questions.

Please tell

If you either brought in the money in the first place (TT3, or currently the proof of foreign remittance), or you earned the money legally and paid the taxes on it, no problem at all.

If on the other hand you are a property developer, and made all of these 10 millions without paying any taxes on it (or very little, sa on a profit of 300,000), most probably without holding a work permit as well, then it might be a tad hard, and really, can you blame them?

[PattayaParent]

(50k Baht maximum permitted out of country).

This isn't exactly correct.

50 K is the maximum cash / legal tender that you can take out of Thailand. However, you can wire transfer larger amounts without difficulty.

That isn't exactly correct.

I've always been asked by my bank to show my work permit when I want to TT money out of Thailand, as have others that I have worked with.

[mikethevigoman]

hey! it's just not a smart idea for the average Joe. END.

It is not a very smart idea for the "average joe" to get into business anywhere, let alone Thailand.

Statistics in most western countries show that that on average 80% of small business go bust within five years. Same statistics show that 5% succeed in the long term & 95% are relegated to professional careers, service or labour jobs.

So the argument I put forward is why would it be any different in Thailand?

95/5 rule is universal - 1 in twenty will do well, three in twenty will get by, another three in twenty will struggle & the rest belly up within eighteen months.

Soundman.

Come on, are you saying its as easy to make a living in thailand as "back home " ?..whilst i agree that a bricklayer that comes here and buys a fish and chip shop is unlikely to make a million as he would have done had he changed proffesions back home,.. you are restricted here, you have problems communicating, most thais dont want to buy off farang, so you are left with exporting or hoping for a niche market serving farang or a big dab of luck,when was the last time you saw a thai handing money to a farang. ? i mean actually handing money over, albeit in a shop or any business where the farang is "hands on ".i had a friend that was/is a very succsssful car dealer, came here to settle, ,the paperwork and steps to try to drive him out of business drove him back to he uk, he likened it to dealing with a big family that didnt want you moving in next door,.thais are consumed with greed and jealousy and the best advice i can give is if asked how you are doing just reply "struggling ' in most cases it will be true,.personally like others im doing ok, but in general and to answer to ops question ,yes of course its harder here, thats how the thais want it and in some ways maybe they are right, look at how England has become,.

[monty]

hey! it's just not a smart idea for the average Joe. END.

It is not a very smart idea for the "average joe" to get into business anywhere, let alone Thailand.

Statistics in most western countries show that that on average 80% of small business go bust within five years. Same statistics show that 5% succeed in the long term & 95% are relegated to professional careers, service or labour jobs.

So the argument I put forward is why would it be any different in Thailand?

95/5 rule is universal - 1 in twenty will do well, three in twenty will get by, another three in twenty will struggle & the rest belly up within eighteen months.

Soundman.

Come on, are you saying its as easy to make a living in thailand as "back home " ?..whilst i agree that a bricklayer that comes here and buys a fish and chip shop is unlikely to make a million as he would have done had he changed proffesions back home,.. you are restricted here, you have problems communicating, most thais dont want to buy off farang, so you are left with exporting or hoping for a niche market serving farang or a big dab of luck,when was the last time you saw a thai handing money to a farang. ? i mean actually handing money over, albeit in a shop or any business where the farang is "hands on ".i had a friend that was/is a very succsssful car dealer, came here to settle, ,the paperwork and steps to try to drive him out of business drove him back to he uk, he likened it to dealing with a big family that didnt want you moving in next door,.thais are consumed with greed and jealousy and the best advice i can give is if asked how you are doing just reply "struggling ' in most cases it will be true,.personally like others im doing ok, but in general and to answer to ops question ,yes of course its harder here, thats how the thais want it and in some ways maybe they are right, look at how England has become,.

Around 30% of my customers are Thai, and perfectly happy to fork over their (probably not that hard) earned cash. This is in the hotel business, very visibly owned and operated by foreigners. They even like to socialize with our foreign customers!

Demographically they are 50% upper middle class (just under the hi-so's) on weekends out/golfing and 50% company staff on training courses arranged for and paid by their 100% Thai owned companies.

[twix38]

come on,

I hear frequent stories that if competiton is doing very well and if foreign, they will receive a visit of some sort eventually. This will possibly ruin stock, set a fire (as in my 2 known examples). It's known that it is better to say and show that business is struggling than business is great and profitable. Once a foreigner starts doing very well, some Thai comes along to set the record straight in some way.

"I've always been asked by my bank to show my work permit when I want to TT money out of Thailand, as have others that I have worked with". Yes, it is not possible and very definately not at all easy to take your own money back home, so my case proven well enough. Be sensible and don't bring too much of it here in the first place!!

Let's not forget that my original warning was just as much for these 75% of silly and medium ill-thought out business operators and less so for well thought out good business models. However, the general issues of language, culture, visas and corruption, at the very least should make all potential businessmen think hard about investing the large sums involved. It's often a great deal of money that will have a serious effect on standards of living once lost and inevitably the owner will often throw more money at it to try to make it succeed, before realisation dawns.

All in all a very dangerous game, because what would ordinarily be unthinkable in your home country suddenly becomes a way to finance a stay, and easy, in Thailand.

My point: This is absolute Rubbish and I want most people to realise this before it is too late. There are just too many many reasons to keep your funds in your home country and just smile back at the Thai's whith the knowledge that you know the pitfalls outweight the likely realistic benefits in most cases.

I am not saying the Thai way is all wrong, though some of it obviously is very biased and unfair. Perhaps in the UK they should adopt some of the measures too to benefit the indiginous population, but we don't. Here in Thailand I am pointing out the obvious and the hidden pitfalls (and by no means all of them at all) and warning people that imho they should abstain in most cases from buying a business here.

Edited December 4, 2007 by twix38

[bino]

So when was the last time you transfered 10 milion baht out of thailand.

with out any questions.

Please tell

10 million? Never. I do however transfer a six figure amount several times a year. It is money that I have earned in Thailand, and paid the revenue department their slice.

"I've always been asked by my bank to show my work permit when I want to TT money out of Thailand, as have others that I have worked with". Yes, it is not possible and very definately not at all easy to take your own money back home, so my case proven well enough.

This is true- I have had to provide a copy of my work permit when making the transfers.

If a person is "legally" working or operating a business in Thailand, they have a work permit. What is so difficult about having to show it?

[xbusman]

First rule of Thailand and particularly applies to any business venture.

NEVER PUT MORE IN THAILAND THAN YOU ARE WILLING TO WALK AWAY FROM.

Having said that, whenever I find business in Thailand to be frustrating or difficult, I think back to all the years of working in the US. In the end, I was forced to be half lawyer and spent about half of my time in court defending against frivolous and ridiculous suits. The other half of running the business was being a tax accountant and dealing with the bizarre and byzantine tax code. Here, I can just do business, buy/sell/manufacture and ship. What a simple joy. Yeah there are plenty of problems and it is a very dangerous environment, hence the first law as stated above, but in the end it is a lot easier and much more fun to work here.

I think that the odds are greatly stacked against any new business venture anywhere in the world. Like stated above, the success rate is very very small. Why would it be different here?

[twix38]

bino,

the difficulty comes from having brought in GBP and converted to Thai Baht, when it is your own hard earnt money from the UK which Thailand gratefully wants.

At some later date you may want to return some of it to the UK, possibly well in excess of 50k Baht.

Then you find you cannot do the reverse process of sending your own funds (originating from the UK) back to your own country (except by 50k lots each visit).

This is penal. The Thai authorities make it easy and attract foreign currency in, so I resent being told I cannot take it out when I want to unless I brought a property (TT3*) or have a business here.

*even then you can only take the purchase price abroad and not any profit. The purchase price has to agree on tax paid, so no work around when you sell, if you reduced the price to Land Office when bought. You then have the amount reduced that you can send home (that bit is fair enough, of course as I don't mind fair rules)

Now many foreigners would perhaps think to move a substantial part of their wealth into Thailand for their life here, so beware is yet again my message. Once it is done you cannot take it back legally.

Another smaller example is if you renovate condo(s) here and make a profit (all legal here I believe as you do not require a work permit) you are unable ever to send the money (profits) home above 50k.

So any scenario where you have funds here above 50k and no TT3 and no job/work permit, you are stuffed.

So, I refer to people who start a new life here. Sell assets abroad and bring in a lot of money and convert to Thai Baht. Bingo!! stuffed and monies cannot be sent home above 50k. Does everyone know this.......NO, they don't

Some people are not going to know about this and for a long time I did not. Thank God I became aware of all these other factors I mention early on and played safe from the start.

I have a condo in my own name and not the company scheme route, although it was touted as fine and secure when I was buying. The real issue is that it is illegal, as it was often practiced (a work around of the spirit of the law that foreigners cannot own land). There are 30+30 year leases etc, but Company schemes now fetch a lower price and it's a second tier market. How many foreignrs wish they had not invested quite so much money into a condo or house in a company scheme. We are all to blame here (not just Thais) but once again it is the eventual enforcement or threat to enforce an existing law which is causing the concern. Laws and Politics are a moving target which moves away from the foreigner a little more each time.

You know, the more I think about all the many little (and larger) issues like these, the worse it all seems to be for a foreigner wanting to do business or invest. It cannot be outright hostile because it would be obvious and investment would dry up (it is starting to), but to an informed and enlightened few, it is bad enough.

Come to Thailand it is great (truly) enjoy the weather, the people and the benefits. Have a great holiday, even if on a permanent or semi-permanent basis, but don't invest and don't join in one of the many ways on offer to take part in financial suicide that you may very well regret for the rest of your miserable and in all likelyhood much poorer life.

Xbusman,

It's no different here on the poor fundamentals of business success rates in general. They are very low as elsewhere.

However, the additional factors that also play their part, whilst many are reasonable rules on foreign competition, reduce the success rate even further. Then there are those additional issues that are mentioned that are not reasonable and can turn it into a real uphill struggle just to be able operate with locals on anything like a near even playing field as a foreigner.

My point is that on balance it is doubly (exaggerated) not worth the risk to make what in all likelyhood is a substantial investment and expect to flaut your own first rule of Thailand, just as double pricing for foreigners is yet another example of the ethos at work here.

I have no objection to the Thais looking after number one. I just think more of us should be fully aware of the dangers and pitfalls, when it is often touted and made to look easier and more possible than it really is. Let's not forget corruption and bribes to the Police either in all this.

Edited December 4, 2007 by twix38

[zorro1]

bino,

the difficulty comes from having brought in GBP and converted to Thai Baht, when it is your own hard earnt money from the UK which Thailand gratefully wants.

At some later date you may want to return some of it to the UK, possibly well in excess of 50k Baht.

Then you find you cannot do the reverse process of sending your own funds (originating from the UK) back to your own country (except by 50k lots each visit).

This is penal. The Thai authorities make it easy and attract foreign currency in, so I resent being told I cannot take it out when I want to unless I brought a property (TT3*) or have a business here.

*even then you can only take the purchase price abroad and not any profit. The purchase price has to agree on tax paid, so no work around when you sell, if you reduced the price to Land Office when bought. You then have the amount reduced that you can send home (that bit is fair enough, of course as I don't mind fair rules)

Now many foreigners would perhaps think to move a substantial part of their wealth into Thailand for their life here, so beware is yet again my message. Once it is done you cannot take it back legally.

Another smaller example is if you renovate condo(s) here and make a profit (all legal here I believe as you do not require a work permit) you are unable ever to send the money (profits) home above 50k.

So any scenario where you have funds here above 50k and no TT3 and no job/work permit, you are stuffed.

So, I refer to people who start a new life here. Sell assets abroad and bring in a lot of money and convert to Thai Baht. Bingo!! stuffed and monies cannot be sent home above 50k. Does everyone know this.......NO, they don't

Some people are not going to know about this and for a long time I did not. Thank God I became aware of all these other factors I mention early on and played safe from the start.

I have a condo in my own name and not the company scheme route, although it was touted as fine and secure when I was buying. The real issue is that it is illegal, as it was often practiced (a work around of the spirit of the law that foreigners cannot own land). There are 30+30 year leases etc, but Company schemes now fetch a lower price and it's a second tier market. How many foreignrs wish they had not invested quite so much money into a condo or house in a company scheme. We are all to blame here (not just Thais) but once again it is the eventual enforcement or threat to enforce an existing law which is causing the concern. Laws and Politics are a moving target which moves away from the foreigner a little more each time.

You know, the more I think about all the many little (and larger) issues like these, the worse it all seems to be for a foreigner wanting to do business or invest. It cannot be outright hostile because it would be obvious and investment would dry up (it is starting to), but to an informed and enlightened few, it is bad enough.

Come to Thailand it is great (truly) enjoy the weather, the people and the benefits. Have a great holiday, even if on a permanent or semi-permanent basis, but don't invest and don't join in one of the many ways on offer to take part in financial suicide that you will regret for the rest of your miserable poor life.

What is a TT3?

[twix38]

Tor Tor 3

Paperwork given (often have to request it, as I did) that allows you to show that funds were brought in from abroad for the purpose of a property purchase. Then on selling the property you are gracefully allowed to send the purchase price amount (after discussion on tax paid etc, probably a bit less and not any profit made) back to your home country.

Really a permit to allow you to return your own money to your own country, as otherwise you need a business permit or you cannot do more than 50,000 Baht per exit from LOS!!!

Before you ask LOS is Land of Smiles :-)

Edited December 4, 2007 by twix38

[soundman]

Come on, are you saying its as easy to make a living in thailand as "back home " ?..whilst i agree that a bricklayer that comes here and buys a fish and chip shop is unlikely to make a million as he would have done had he changed proffesions back home,.. you are restricted here, you have problems communicating, most thais dont want to buy off farang, so you are left with exporting or hoping for a niche market serving farang or a big dab of luck,when was the last time you saw a thai handing money to a farang. ? i mean actually handing money over, albeit in a shop or any business where the farang is "hands on ".i had a friend that was/is a very succsssful car dealer, came here to settle, ,the paperwork and steps to try to drive him out of business drove him back to he uk, he likened it to dealing with a big family that didnt want you moving in next door,.thais are consumed with greed and jealousy and the best advice i can give is if asked how you are doing just reply "struggling ' in most cases it will be true,.personally like others im doing ok, but in general and to answer to ops question ,yes of course its harder here, thats how the thais want it and in some ways maybe they are right, look at how England has become,.

I can't speak for everyone - only myself.

My "new" (read same business I was doing in Australia) business in Thailand has grown at a faster rate than when I built it in Australia.

To make comparissons - very hard. More red tape here, bigger but more price sensative market, communications problems, had more cash when I started here, no real credit availability on my own behalf etc etc.

To me business is like maths. You're either good at it or not. Its a relatively universal language - same problems everywhere - not just Thailand.

My advice to people wanting to start a business in Thailand is that if were not successful at running a business in your own country for many years first - don't try here. Obviously there are exceptions to this rule...

Soundman.

[Ulysses G.]

Although I agree with much of what the OP had to say, it is other foreigner's lack of common sense in business that bothers me even more than that.

Not being able to get decent locations because some moron with more money than brains is bankrolling a failing business that just keeps staying open even though they have no customers.

The idiots that come along and buy these failing busineses and then proceed to fail themselves, making it impossible to get a good location unless you pay off some loser for his failed business that he will try to sell to some other loser and most likely suceeed.

Idiots that keep paying more and more for rent even though they have no clue about business in Thailand or their own country. They keep driving the rent up for those that have some clue as to what they are doing.

Fools that pay "Tea Money" and make it seem normal and make it even harder to get a reasonable rent.

Well you get the idea.

[stevemiddie]

Although I agree with much of what the OP had to say, it is other foreigner's lack of common sense in business that bothers me even more than that.

Not being able to get decent locations because some moron with more money than brains is bankrolling a failing business that just keeps staying open even though they have no customers.

The idiots that come along and buy these failing busineses and then proceed to fail themselves, making it impossible to get a good location unless you pay off some loser for his failed business that he will try to sell to some other loser and most likely suceeed.

Idiots that keep paying more and more for rent even though they have no clue about business in Thailand or their own country. They keep driving the rent up for those that have some clue as to what they are doing.

Fools that pay "Tea Money" and make it seem normal and make it even harder to get a reasonable rent.

Well you get the idea.

Seems like you haven,t got the money to aquire a good location huh?

Its a tough old life.

[twix38]

Soundman,

What is the nature of your work? Does it require premisis in Thailand? Employing staff? (4 Thais must be employed for every foreigner), dealing with other Thai companies? Selling to Thais? Do you get the occasional visit from the Police to contribute?

This list could be enormous.

My point is that some business operations better suit Thailand because they are usually the ones that have least to do DIRECTLY with Thailand as a location or Thai suppliers etc. Not needing premises is another bonus of course and all that I have already refered to..............Your business model and operation are the key to your success and nothing to do with operating or a good business environment provided by the Thai authorities etc imho............. and then again some still succeed in spite of it all with a good business and good luck.

Nobody answered my previous question on the rule and law revisions we have regularly and how they all tighten up and make things harder for foreigners or put it another way, when was the last time a rule or law was initiated or inforced to help foreigners investing in business here. Ummm I can give lots of poor examples of visa rule updates, FBA proposals, company scheme enforcements, corruption examples..........................................

I'd like to do an internet business or a few others I can think of that cuts out large parts of the Thai hassle/corruption factor.

I suspect that your business success has nothing much to do with operating from Thailand in reality and you have overcome the obstacles and you mention a few new ones too. Thanks.

All credit to you, as you had a tested formula already and you are one of the lucky few or managed to bypass and overcome the host of deliberate (both just and unjust) limiting factors faced here as foreigner investors.

Edited December 4, 2007 by twix38

[plasticpig]

bino,

the difficulty comes from having brought in GBP and converted to Thai Baht, when it is your own hard earnt money from the UK which Thailand gratefully wants.

At some later date you may want to return some of it to the UK, possibly well in excess of 50k Baht.

Then you find you cannot do the reverse process of sending your own funds (originating from the UK) back to your own country (except by 50k lots each visit).

This is penal. The Thai authorities make it easy and attract foreign currency in, so I resent being told I cannot take it out when I want to unless I brought a property (TT3*) or have a business here.

*even then you can only take the purchase price abroad and not any profit. The purchase price has to agree on tax paid, so no work around when you sell, if you reduced the price to Land Office when bought. You then have the amount reduced that you can send home (that bit is fair enough, of course as I don't mind fair rules)

Now many foreigners would perhaps think to move a substantial part of their wealth into Thailand for their life here, so beware is yet again my message. Once it is done you cannot take it back legally.

Another smaller example is if you renovate condo(s) here and make a profit (all legal here I believe as you do not require a work permit) you are unable ever to send the money (profits) home above 50k.

So any scenario where you have funds here above 50k and no TT3 and no job/work permit, you are stuffed.

So, I refer to people who start a new life here. Sell assets abroad and bring in a lot of money and convert to Thai Baht. Bingo!! stuffed and monies cannot be sent home above 50k. Does everyone know this.......NO, they don't

Some people are not going to know about this and for a long time I did not. Thank God I became aware of all these other factors I mention early on and played safe from the start.

I have a condo in my own name and not the company scheme route, although it was touted as fine and secure when I was buying. The real issue is that it is illegal, as it was often practiced (a work around of the spirit of the law that foreigners cannot own land). There are 30+30 year leases etc, but Company schemes now fetch a lower price and it's a second tier market. How many foreignrs wish they had not invested quite so much money into a condo or house in a company scheme. We are all to blame here (not just Thais) but once again it is the eventual enforcement or threat to enforce an existing law which is causing the concern. Laws and Politics are a moving target which moves away from the foreigner a little more each time.

You know, the more I think about all the many little (and larger) issues like these, the worse it all seems to be for a foreigner wanting to do business or invest. It cannot be outright hostile because it would be obvious and investment would dry up (it is starting to), but to an informed and enlightened few, it is bad enough.

Come to Thailand it is great (truly) enjoy the weather, the people and the benefits. Have a great holiday, even if on a permanent or semi-permanent basis, but don't invest and don't join in one of the many ways on offer to take part in financial suicide that you may very well regret for the rest of your miserable and in all likelyhood much poorer life.

Xbusman,

It's no different here on the poor fundamentals of business success rates in general. They are very low as elsewhere.

However, the additional factors that also play their part, whilst many are reasonable rules on foreign competition, reduce the success rate even further. Then there are those additional issues that are mentioned that are not reasonable and can turn it into a real uphill struggle just to be able operate with locals on anything like a near even playing field as a foreigner.

My point is that on balance it is doubly (exaggerated) not worth the risk to make what in all likelyhood is a substantial investment and expect to flaut your own first rule of Thailand, just as double pricing for foreigners is yet another example of the ethos at work here.

I have no objection to the Thais looking after number one. I just think more of us should be fully aware of the dangers and pitfalls, when it is often touted and made to look easier and more possible than it really is. Let's not forget corruption and bribes to the Police either in all this.

Bino, Has all the answers, its dead easy ,

good post

[Ulysses G.]

Although I agree with much of what the OP had to say, it is other foreigner's lack of common sense in business that bothers me even more than that.

Not being able to get decent locations because some moron with more money than brains is bankrolling a failing business that just keeps staying open even though they have no customers.

The idiots that come along and buy these failing busineses and then proceed to fail themselves, making it impossible to get a good location unless you pay off some loser for his failed business that he will try to sell to some other loser and most likely suceeed.

Idiots that keep paying more and more for rent even though they have no clue about business in Thailand or their own country. They keep driving the rent up for those that have some clue as to what they are doing.

Fools that pay "Tea Money" and make it seem normal and make it even harder to get a reasonable rent.

Well you get the idea.

Seems like you haven,t got the money to aquire a good location huh?

Its a tough old life.

Actually, I have EIGHT prime locations in Chiang Mai, but I'm paying more than they are worth because of my fellow farangs inept business practices.

[Gary A]

It takes money to make money. IMHO if you have enough money to buy a good business, you have enough money to retire on. Regardless of what the promoters say, it is NOT a level playing field. If you do happen to be successful, you will be working harder and longer hours than in your home country.

[twix38]

If I can stop just one foreigner from making a big mistake by better understanding the real situation of business opportunities and operation and the many, yes I'll say it again MANY challenges in Thailand more clearly, then I am content.

It almost reaches a point where from a standing start, one may wonder just how many issues/facts are needed to be pointed out to damp down the enthusiasm of often niave foreigners with rose tinted glasses who know so very little of the real Thai business landscape and just how much of an uphill struggle business life is for the foreigner.

The details mentioned so far are actually far from complete, as there are, believe it or not, yet further reasons that doing business in Thailand has hidden and unpublicised risks. Let's not forget we are guests here in LOS and we have no rights in a country where the political landscape is uncertain.

Once you have a grasp of the "tilt of the playing field", then by all means invest in the knowledge of what you may experience. No problem (sucker, in most cases though).

Edited December 5, 2007 by twix38

[torrenova]

The problems are well known for small businesses but think about this:

Profit from business Annual expenditure Surplus

1,000,000 1,000,000 0

1,500,000 1,000,000 500,000

2,000,000 1,000,000 1,000,000

2,500,000 1,000,000 1,500,000

3,000,000 1,000,000 2,000,000

I find it difficult to spend over around Bt1,000,000 per year except for one off capital purchases but I could see that rising to Bt1.5m in the medium term.

So if you have a business which makes 2.5m then you are fine but if you have a business which makes only your 1m then you have a problem. You also have a problem if you have a downturn in business such as happened this year for the tourist based businesses.

Therefore I see the answer being the lack of inward capital and sufficient critical mass. For larger businesses, the costs of doing business legitimately are fine but for the small single site operator, they can be quite significant.

[linglop]

If you are wanting to open a business which attracts farangs, you might be far better off opening the business in Hua Hin. The number of farang visitors to Hua Hin is many times the number of farang visitors to Pattaya. Hua Hin is a three hour bus ride from the southern bus terminal (sai tai mai) and the bus stops in the middle of the city. Take a trip and oogle at the number of visitors in Hua Hin!