Ivestment opportunities in thailand?

[rakthai]

Looking for ideas for investing in Thailand. Any positive ideas?

[Sunbelt Asia]

My experience has taught me after looking at many businesses in Thailand...If you have a quality service or product. Your clients will not balk on price. Provide what they want, give prompt service, reliable service and they'll come back and recommend their friends. A number of businesses are formed as a hobby so it’s easy for them to lower their prices. If you try competing with price, you're dead. Compete with quality service and you can win big.

As for your best chance of succeeding... go with a proven system. A existing business or franchise will put the odds dramatically on your side. Starting a company in any country has bad odds especially in a foreign one. Be smart and take advantage of someone else’s hard work of finding a good staff, finding suppliers, dealing with delays with contractors and most important getting customers in the door.

A certain number of GOOD businesses are available simply because of human needs.... relocation, retirement, health, divorce etc.

Finding a business that matches your personality, takes work. Its not point and click. Some people may feel that way, as we have over 500 businesses for sale on our web site. It's only the first step.... many more are needed before becoming the proud owner.

Best of luck in your search. If our staff can help you, just let me know.

[MaiChai]

Sunbelt Asia, not wishing to sound negative or cynical, but your posts are starting to dominate this board. While I appreciate you have a sales pitch, please don't over do it here.

Regarding setting up a business in Thailand, firstly you have to be very careful. You don't have the legal infrastructure to protect your business that you probably have in your homeland. Also, it is very difficult for foreigners to legitamly setup a business in Thailand without either paying for the privilege or bending rules and regulations. Also some of the businesses I have seen for sale appear to be greatly over valued, and if you are keen to have a business here you would be better building it up yourself. And finally, it would be foolhardy to setup a business in a foreign land where you may have little understanding of the language or culture; expecting someone to handhold you would be asking to be ripped off. Thus you need to establish yourself here, work out how things are done, get to know some Thai language, find the pitfalls, workout how things are different here to the way they are done back at home, what business models will work here, how to compete with the local Chinese, etc, etc.

Buyer beware, many a gulible, rich farang has lost a lot of money here; behind the smiles and politeness can be some serious manipulators.

Thais are very good at maintaining their independance in a world dominated by Western, Japanese (and American) entities. Thus, things are setup so that foreigners cannot come in and dominate the business landscape. If your looking for a cheap place to make things, there are other easier places in the world to do it.

Hope this balances the arguement out a little.

[Sunbelt Asia]

Hi MaiChai,

As forum sponsor, George has asked us to share our views. After we have looked at many companies in Thailand.  Feel this thread is one I should comment on.  As for your comments, nothing I would disagree with.  A forum should have many viewpoints. I for one, sincerely thank you for your post. You raise some good points.

Have people lost money in Thailand starting up a business? Yes. I would dare say they would of in their own country as well. Owning a business is not for everyone. Have people come here and have done VERY WELL? Absolutely.

I can say, no question buying an existing business is more prudent. No matter whom you acquire it from. It's being able to pick from 10-20 different business models. Some are going to look over valued, some undervalued, and some won't fit your personality. But you can see firsthand before you invest, is it working or not. You are not going to pick the worst business. It's going to be the one you feel has more growth and has proven itself. The rule of thumb is price to earnings at about 2.5x.

On a start-up, you only have speculation. Business plans always look awesome, and seldom take in account the delays in opening up.

Nothing is guaranteed in life but the odds are higher going with proven businesses than starting one up.

Alot of investment dollars went into factories in China. One recent study has shown, Thailand is cheaper and easier.

http://www.biz-in-thailand.com/moving_factory.html

[MaiChai]

Sorry Sunbelt, did not realise you were a sponsor. I just wanted to point out the pitfalls as both sides of the arguement need to be highlighted. I also believe there is a very valid role for an agent as yourselves to bring buyer and seller together.

I would however advise anyone seeking to setup a business in Thailand to realise that the risks are much greater than setting up a business in a Western country, where the legal framework is much better, and all persons, irrespective of nationality, are treated equal. It is very difficult for small foreign owned businesses to operate in Thailand; if you are a medium or large business, then the Thais welcome you with open arms. Thais have a rip off/get rich quick mentality, and you need to determine whether a business really is worth the asking price.

[Sunbelt Asia]

Their are good and bad firms.

Just like Thai staffs in offices or businesses. Most are hardworking and honest even more so than Western firms.

Others are lazy and not honest. Thais usually follow the lead. If others are doing it in the company and have no problems. They'll do justify it, that it’s ok if they do it as well.  

Fortunately 90% of the companies numbers are correct but you have to watch out for the 10%. That’s why due diligence is important.    

Their are pitfalls but would venture to say, their is more opportunity than the West. I know of several businesspeople who are very successful and stated similar comments the last week " Wish I was younger.  Just too many opportunities here."  The economy is improving… as evident by hitting 4 year highs in the stock market here! No question 2003 has been a Golden Year even with the war and sars.

[mowlem]

Unfortunately, many farangs are involved in some way with tourism (i.e. selling services etc to westerners), so whether the rice exports have doubled or not is irrelevant.

Sars destroyed many westerners hopes of a profitable life here.

My positive idea is to come here, live here for six months, (you might hate the place!) without access to your investment money THEN think about what to to. Talk to as many DIFFERENT people as possible, then take a view.

[Sunbelt Asia]

The problem with getting many views is you will get so confused, you’ll be frozen. So much misinformation out there. Go into a bar and ask 10 different people about setting up a company. You’re going to get 10 different answers. Can you seperate the correct advice from the overall answers?  

The successful business owner is not going to share his positive views. Why should he? More competition for his business!

If you are looking to invest in a business, it never cost you one baht to be in our office. You can spend 20 hours picking our brains and you'll never get a bill. Even if you ever do own a firm, no professional fee is charged to you. You of course would have your lawyer fees( less than 5,000 baht) but not one baht to Sunbelt Asia. We have over 600 listings so you decide which opportunity is best for you. We do not go with the client to any business, the final decision is yours, after looking and doing due diligence on 20 or so businesses, which is the best for you to own.

As for spending 6 months before making a move and learning Thai. That would be the best decision.

[mrentoul]

The case study to which Sunbelt provided the link, about the comparative benefits of moving a plant to China or Thailand, is outstanding (I shall tell my colleagues at the Post).

Thank-you for posting it.

[samuisam]

I would advise against it until the Thai Govt allows you to own a business (or a house or land, or even a car!) without jumping through and endless series of self perpetuating hoops that never end.

[sevinnow]

The problem with getting many views is you will get so confused, you’ll be frozen. So much misinformation out there. Go into a bar and ask 10 different people about setting up a company. You’re going to get 10 different answers. Can you seperate the correct advice from the overall answers?  

The successful business owner is not going to share his positive views. Why should he? More competition for his business!

Sunbelt,  that is the most logical and sensible comment I have read on this forum in over 6 months.

Without question one should definiately take at least 3 months to adjust to life in LOS.

A friend of mine transfered 4 million baht to Bangkok Bank with the idea of buying a business in Pattaya, only to find out that after 3 months he could not cope with the constant heat 24 / 7 .   Previously he had only experienced LOS on a 2 week holiday, so this might not apply to everyone but it raises just one issue what you could be faced with.

Good Luck.

Sev

:cool:

[keestha]

Quoting Sunbelt:" The problem with getting many views is you will get so confused, you’ll be frozen. So much misinformation out there. Go into a bar and ask 10 different people about setting up a company. You’re going to get 10 different answers. Can you seperate the correct advice from the overall answers?  

The successful business owner is not going to share his positive views. Why should he? More competition for his business! "

IMHO, more likely to happen is that the not so successful "business" owner is not going to share the thruth about what really happened , and about the situation he is in presently. He will be ashamed to tell that after having spent 7 years in the LOS he still doesnt have a source of steady income, and that he is worried about the electricity bill which is due to arrive at the end of the month. To the guy he meets in a bar he will give a far more positive review of the facts than what is warranted by reality.

Also.......It happens a lot that for instance farang bar/restaurant/guesthouse owners who are operating at a loss, their only way to stay in the LOS is  to find a gullible recently arrived westerner  to buy their "business" or to become a "partner". Reality is that the guy who becomes a "partner" is told he will get his share of the profit at the end of every month, but what really happens is het he gets paid back his own money bit by bit. (Wont mention alternative scenarios that are even worse).

[Sunbelt Asia]

Keesha,

Granted, I have had the advantage of looking at many bars and restaurants in the past years.  I'm even in the fast-food industry as an owner.

Do people make money in Thailand? Yes. Is it harder than the persons own country? In my case, I have found so in the restaurant business but compared to the average salaries around here for expats. We are doing very well at our location.

Do people lose money in Thailand? Yes but it’s a much lower number than you might think or the conception is.

The bottom line, I don't know more than ten bar/restaurant owners that have gotten rich and I mean made $USD2 million here but many that make a nice little income. I have met fewer people here that have lost the plot, than the USA. I’m talking Bangkok now and not beer bars in Pattaya. I would surmise many don’t do well there but that’s only speculation on my part. In BKK, most all entertainment areas do ok. "Most" meaning 70% make a profit.

[keestha]

Hello Sunbelt,

Dont wanna go into a yes-no discussion, but.......The vast majority of farangs starting businesses in Thailand go into the restaurant, bar or guesthouse business, or a combination of those. Also some will open shops or travel agencies, go into website designing, or whatever. My point is though, that anybody who has lived for some time or spent a lot of holidays in a place like Koh Samui, Phuket, Hua Hin , Chiang Mai or Pattaya has seen the farang business owners come and go, the majority of them having run the business for not so long. Their reason for going is usually not that they have accumulated enough wealth to retire. I have to concede that some of these guys had to stop because they made the mistake of putting the business on the name of the recently acquired Thai girlfriend/wife.

I would advice any farang who is considering to start  a business, especially in the hospitality industry,  to get hold of an about 3 years old copy of the Phuket Gazette, Pattaya Mail, Hua Hin Observer, Sudostasien Zeitung or whatever other local farang oriented magazine, and then check which farang run businesses who advertised are still there. Or even better, talk to the local Thai people who have seen them come and go. In for instance Koh Samui, they wont be very much impressed if you tel them that you are about to open a restaurant: they will simply regard you as a tourist who needs a bit more time to get rid of his money.

But then, dont take my word for gospel, my view might be biased because I have spent too much  time talking to losers who share my preference for late night drinking places.

[mowlem]

The problem with getting many views is you will get so confused, you’ll be frozen. So much misinformation out there. Go into a bar and ask 10 different people about setting up a company. You’re going to get 10 different answers. Can you seperate the correct advice from the overall answers?  

The successful business owner is not going to share his positive views. Why should he? More competition for his business

I think sunbelt is misrepresenting me. If I go to shop for a $1500 dollar computer, I sure as #### talk to people 'in the know' about the merits or otherwise of different models. I don't go into a shop and ask the sales rep to sell me one, because I might get "confused" with several different opinions. So if I was spending a #### of a lot more money on a business, I do a #### of a lot of homework.

Q1 How do I know I am paying the right price?

Q2 Why is he/she selling?

Q3 What do I get for my money? (Stock? Staff? Lease? )

Q4 What do I do about Thai documentation?

Q5 What about tax AND payments, (OK kickbacks and bribes)

Q6 How much for lawyers, accountant etc. (and where can I    get a good one)

Q7 What is my Thai girlfriend and family expecting out of this

     (Are you going to HAVE to employ her lazy drunken brother? etc.,)

The current  "Big Chilli" magazine -or maybe last month's has an article on a business that went wrong. Interesting.

NOW.....

Before you all jump down my throat, I am not saying don't invest. I am saying it ain't easy to make a profit. If you are here for any length of time, you'll see businesses go under, others take off. Bangkok is the monetary bullshit capital of the world. I have been offered so many ground floor "opportunities" laughable for their naivety, or lack of planning, or hopeless forecasts.

Yet some friends have made decent money. They use their eyes, know what is going on locally-is it true they ARE building a condo next to my shop, or that they would LIKE to -Is the underground going to affect my busness etc.,

Usually not from bars though....

P.S. The mention of Thaivisa.com doesn't seem to get free sodas any more at the Soi 4 branch. Shame, that is one franchise that seems to have lots of customers.....

[mowlem]

I seem to have fallen foul of the naughty word censor. Sorry, but I intended the post for discussion, not an abusive rant the censor thinks it is. BTW the naughty word is where bad people eventually go, and is the opposite of heaven.

[Bruhn & Pedersen]

Thank you for initiating this excellent discussion. I have myself been seriously considering going into business in Thailand but ended up deeming the risk too high partly due to the protectionistic business environment. Currently I am living in China and have been here for three years and I would any day of the week and twice on a Sunday say if you were to set up a factory then China is the place certainly from a cost perspective but even more so from a quality and human resources perspective. There are many smart and hardworking people here just looking to kick but.

Anyways I have been through the Sunbelt site and it seems there are only great deals available and a lot of people are falling ill in Thailand just as their business is realizing their full potential - whats up with that?

Secondly you mentioned the buyer is not paying a fee for Sunbelt's services, is that correct understood? How do you then ensure a healthy return on your business? Is it the seller that pays your fee?

Thanks.

Ken

[mrentoul]

BTW the naughty word is where bad people eventually go, and is the opposite of heaven.

How sweet. Try this:

<deleted>*ck

sh*it

hel*l

blo*ody

...and so on. That might work.

[Sunbelt Asia]

Hi Ken,

Yes the Sellers pays our fee and we work on a success basis. We accept all expenses marketing for them (advertisements, websites, our labor costs, etc) if the business is not acquired. Most important we do it in a confidential matter to preserve the asset value which is partially valued on the current number of clients and trained staff.

Around 4 out 5 businesses don't sell. That’s the same ratio with other brokerage offices around the world. Why that number is so low, is another topic. My wife recently did an excellent article" Why do business transfers fall apart before the closing" which was published in last month’s Pattaya Trader magazine.

We get on average 40 contacts for every business before some acquires it That investor probably looked at 10-15 businesses before acquiring that particular one.

As why people sell, its usually human reasons. Moving back, retirement, health, tired, divorce, going back to study, partnership dispute, too long of hours, almost never is it financial. If someone tells us “Everything is for sale for a price” we don’t accept that listing as the probability is it will never get to the closing table.

As for your comment "only great deals available and a lot of people are falling ill in Thailand just as their business is realizing their full potential - whats up with that?"

A grand total of 17 business owners out of 632 owners are selling because of health is "a lot"?  That leaves 97% others that are selling for other reasons.

[Bruhn & Pedersen]

Hi Gert,

Only 1 out of 5 businesses up for sale is actually sold?! That is an extremely low ratio which is very surprising in particular when you take a look at the financial soundness of most the businesses up for sale on your own site. I for one would be very interested in reading your wife’s article - is it by any chance featured on the net?

As to my comment I will withdraw it and go back and do some additional homework to ensure I have my facts straightened out. My point is though that if one reads the ads posted on your site without doing further investigation one will get the impression that it is a regular goldmine of opportunities out there up for grasp.

I know I am being a bit skeptical but in biz you have to be. I for one would actually be willing to pay a commission as a buyer if I knew the broker would be representing my interests and take my hand to lead me through the jungle that it is for an outsider.

Out of curiosity why is Sunbelt Asia so focused on Thailand? Do you have any plans of expanding your presence beyond Thailand to the rest of the region?

Thanks,

Ken

[atiga]

Are sunbelt asia a sponsor or is this there website, lots of cheaper companies doing the same thing, please shop around as the american companys charge you usa prices.

As  per usual expats robbing expats.

[Sunbelt Asia]

Keestha,

I must be talking to the winners then in Koh Samui. We don't have a listing there yet but were looking at opening another restaurant franchise there ourselves and asking about the environment. LOCATION is everything and the key.

Many people talk about the "fat wallets" and the season being year round. I've talked with 3 restaurant owners there and doing 2-3 million baht gross per month is quite common. I also spoke with two friends who commented the large number of tourist from Europe there year round. My main concern is the shipping of food product and the higher food costs.

[Sunbelt Asia]

I think sunbelt is misrepresenting me. If I go to shop for a $1500 dollar computer, I sure as #### talk to people 'in the know' about the merits or otherwise of different models. I don't go into a shop and ask the sales rep to sell me one, because I might get "confused" with several different opinions. So if I was spending a #### of a lot more money on a business, I do a #### of a lot of homework.

LoL. I think you’re misunderstanding what I said. I never said not to do due diligence. We strongly advocate it. What I said was “ Go into a bar and ask 10 people about owning a bar. You’ll get lots of answers” As for asking lots of questions to the business owner, doing extensive due diligence makes a lot of business sense with a lawyer and accountant. Even if you could discuss a particular bar, you also could get many answers on valuation. How could they have the first hand knowledge you have without violating the confidentiality covenant? That’s why other business advisors (lawyer and CPA) are necessary so you feel comfortable.    

Q1 How do I know I am paying the right price?

The average  business sells for 2.5 times earnings with the equipment and inventory included. How to determine profit is another discussion and rather not share it on a public forum.

Q2 Why is he/she selling?  

First question our staff ask the seller as well. It’s the number one question for most clients as well.

Q3 What do I get for my money? (Stock? Staff? Lease? )  

95% of the time, the lease will be in your name. The other 5% is with share transfers and the lease stays in the corporation name. Key staff is usually mentioned in the purchase agreement. Most sellers are prohibited to hire their staff for one year. Also non-compete is enforced. Almost always the inventory is included in the purchase.  

Q4 What do I do about Thai documentation?  

That’s why it good to have a lawyer for all the documentation. Its usually in English and Thai.  We have a staff of three who do this fulltime. Because of conflict in interest, they do NOT however do due diligence on a business with Sunbelt Asia. You should hire your own lawyer for that responsibility.

Q5 What about tax AND payments, (OK kickbacks and bribes)

Tax is 30% flat rate and on kickbacks. Only some go-go bars and massage places have any problems. Most all businesses never pay any bribes or kickbacks to the police. Customs is another mater. That is a Kingdom within a Kingdom.

Q6 How much for lawyers, accountant etc. (and where can I    get a good one)

Thai accountants are 3,000 Baht per month. English speaking accountant are 8,000 baht and up per month. To form a company, Vat, work permit, visa, etc with our firm is 53,000 Baht.

Q7 What is my Thai girlfriend and family expecting out of this

    (Are you going to HAVE to employ her lazy drunken brother? etc.,)

Good question (

“P.S. The mention of Thaivisa.com doesn't seem to get free sodas any more at the Soi 4 branch. Shame, that is one franchise that seems to have lots of customers.”

Try it now. It’ll work till October 1st. Free Soda with your Sub sandwich at Subway..

[Sunbelt Asia]

l"ots of cheaper companies doing the same thing, please shop around as the american companys charge you usa prices.

As  per usual expats robbing expats."

Price is relative and service is the most important.

Saying that however, can you tell me one firm either Thai or Foreign that has a more inexpensive service? Were not in the middle for price, my understanding were the lowest in Thailand.

Your comment "as per usual expats robing expats" Can you name one expat our firm has robbed? Clue... you won't find one. Your remark is out of line.

[Sunbelt Asia]

“. I for one would be very interested in reading your wife’s article - is it by any chance featured on the net?”

I will pm it to you.

“I know I am being a bit skeptical but in biz you have to be. I for one would actually be willing to pay a commission as a buyer if I knew the broker would be representing my interests and take my hand to lead me through the jungle that it is for an outsider.”

The transaction has to be fair for both the buyer and seller. We represent the “transfer” itself.

Out of curiosity why is Sunbelt Asia so focused on Thailand? Do you have any plans of expanding your presence beyond Thailand to the rest of the region?

We are! Were in Indonesia, Singapore, Malaysia, China and yes we have four offices in Thailand… Phuket, Pattaya, Chiang Mai and Bangkok.  We have Sunbelt offices in Europe, South America and of course over 300 offices in the States.

[dotroy]

The case study to which Sunbelt provided the link, about the comparative benefits of moving a plant to China or Thailand, is outstanding (I shall tell my colleagues at the Post).

Thank-you for posting it.

I am a business student and I do not really agree:

According to the article, thailand has stronger  Protection of Intellectual Property than China, should I laugh ?? Walk down the street and you will find every  Intellectual Property laws has been broken by this country. If properly calculated China is far more cheaper than Thailand . The article just uses some numbers and try to persuade investors that Thailand is a great place to invest. Well my personal opinion is that if you are opening a corporation, then its fine. Otherwise foreigners are second class citizen in this country, and are discriminated everywhere.

If a farang invests in this country can he even buy a land in his name ?

Better do more research from a reliable source, rather than reading from some chocolate coated thai source.

[Sunbelt Asia]

Around a month ago, I met a guy who had been the Managing Director of a motorcycle plant in China. He said on the surface, that China would appear cheaper but his companies experience was much different. They had just closed it after 5 years. They had lost over USD10 million. He  stated the government will hire people for $50. To hire that same person as a manager for his company, they would expect $2,000 per month. Then to top off their appreciation, they would lose their mobile phone a number of times in a year. Losing it to their Mia Noi’s

His opinion from talking to other foreigners. They faced the same problems. In his opinion, Chinese are very much racist towards the Thais. Only Chinese from Singapore seem to hold their own.  

As for Thailand, the key is the Board of Investment for your factory. You then of course can own land. On the other hand if you invest individually 40 million Baht, you can own land as a individual as well. Most people would agree the standard of living is better in Thailand. As for the comparison on protection of Intellectual Property. If Thailand is stronger than yes China must be very bad. Thailand at least does raid from time to time.

As for the source, it’s a real case study. A business advisor who advised China World Best Group to move their factory to Thailand and they did.  He gives the reasons for it. The Business Advisor is  Christopher W. Runckel, a former senior US diplomat who served in many counties in Asia, is a graduate of the University of Oregon and Lewis and Clark Law School.  He served as Deputy General Counsel of President Gerald Ford’s Presidential Clemency Board.

Until April of 1999, Mr. Runckel was Minister-Counselor of the US Embassy in Beijing, China.  Mr. Runckel lived and worked in Thailand for over six years.  He was the first permanently assigned U.S. diplomat to return to Vietnam after the Vietnam War.  In 1997, he was awarded the U.S. Department of States highest award for service, the Distinguished Honor Award, for his contribution to improving U.S.-Vietnam relations.  Mr. Runckel is one of only two non-Ambassadors to receive this award in the 200-year history of the U.S. diplomatic service.

[mrentoul]

The article just uses some numbers and try to persuade investors that Thailand is a great place to invest. Well my personal opinion is that if you are opening a corporation, then its fine. Otherwise foreigners are second class citizen in this country, and are discriminated everywhere.

The article ''just uses some numbers''? Of course it does...that's what business studies do. What kind of business student are you if you're prepared to disregard hard information?

Racism is everywhere. Depending on the dialect of Chinese you speak you can have a hard time, even if you're Chinese (so a Chinese friend tells me). So what? None of this detracts from the article I mentioned above.

I get irritated wth people that make bald statements like

''better do more research from a reliable source, rather than reading from some chocolate-coated Thai source''. Who says it's no good? You?

You might care to do better yourself next time you post. Hard facts please, and less seat-of-the-pants stuff.

[dotroy]

I get irritated wth people that make bald statements like

''better do more research from a reliable source, rather than reading from some chocolate-coated Thai source''. Who says it's no good? You?

Please read my comment well, I said Thailand is good for big investment like 40M but not for 5M.

Well my comments irritates you so what ? I am not concerned about that . Please compare these 2 urls

http://www.biz-in-thailand.com/moving_factory.html

http://www.business-in-asia.com/investment_comparison.html

and you will see factors such as skilled labour abt thailand

"Thailand more expensive for high level management, engineers, etc but availability of managers and accountants better than VN.  China has the net advantage because of lower prices for technical and management and good availability."

This part of the comment was edited to make thailand make good.

When you write your business plan you put weight to factors that are important to you such as market size and skilled labour. One of my friend opened a Java software company in thailand and lost more than 15 million (in 2 years) just because its very hard to get a skilled java programmer here and microsoft technology dominates here, so there is less demand for Java.

If you are trying to say that you will open your business in a place where its hard to find "Skilled labour" and where maket size is small .....just because its cheaper to set up, then I have nothing to say. Owning a land can be an advantages but at the same time leasing can be a better choice, it all depends on the goal of the investment and return rate. What about exit strategy ?? If you always buy something just because you think you will need it, so what happnes to your cash flow, when you feel that you need to stop your business because you are loosing money ?

As a business I do not always believe what I read. I have found mistakes in many business books, specially case studies about some Thai companies. If you were to always trust what you read, then you are living in a perfect world where everyone is honest.

If you don't agree what I say you can always argue and if I find I made a mistake I am willing to admit my mistake but don't tell me not to say what I think just because it irritaes you.

[ahddub]

Fugetabowdit.  Can't you hear the big sucking sound?

http://forum.thaivisa.com/cgi-bin/ikonboar...t=ST;f=1;t=2407