Planning To Manufacture...need Advice Please...

[daveo]

hi guys

i've literally been reading all related posts for the last 2 hours! from which i've learnt a lot.

i'm planning to initially set up an office with a team of engineers to develop & manufacture electronic products for export with scope to eventually have our own factory.

i'm british and i'm not sure if i can wholly own the company?

also, reading the boi's website, it really attracted me to the prospect of setting up in thailand, however, after reading all the posts disuading setting up a company, i'm very confused.

i've looked at the majority of countries in asia, and it's extremely confusing and difficult to decide which country to invest in. is thailand the best country for me to invest my type of business in asia?

also, how strong are copyright/intellectual property rights in thailand?

thanks guys, i appreciate any advice given..cheers (from a very cold england)

[Chang_paarp]

Welcome to Thai Visa

Going into business anywhere can daunting, doing it in a country with different culture and language can be doubly so. As with any business one of the keys is research, this takes time and money. One thing you will find is that things can take time here, things that should take a week can take a month. A friend who is building an electronics manufacturing plant is discovering this, now he has to explain the delays to his European partners, I sugested that he ask if they would expect quick results if the workforce was entirely "Eastern Europeans", with a bit of luck they will understand the analogy.

If you are looking to set up a manufacturing plant for export you will get a number of benifits through the BOI if you are investing enough money, you maay not get this with an office full of foreign engineers. This in itself could prove problematic. Good professional advice is well worth what you pay i the headeches and time it can save. A BOI company can be foreign owned, or if you can find a US citizen as a partner you can get100% ownership under the treaty of Amnity.

On the upside you can hire graduate engineers here for less per month then you pay for a week in England, graduates are open to outside ideas older ones may have cultural ideas that you find unacceptable and resist change. Rents are relatively cheap and there are worse places to invest a month or so to do a feasibility study.

[Indo-Siam]

If your company's only business will be manufacturing for export (no retail or wholesale activity inside Thailand), then you can set up and operate as 100% foreign-owned. The only restriction is that to sponsor work permits as a majority foreign-owned company, the company must submit bank documents showing that investors have paid up 100% of registered capital.

If you go the BOI route, you will also have to pay up all registered capital - prior to obtaining your BOI privilege certificate. In general, qualifying for a work permit under BOI rules for "experts" is MUCH harder than qualifying for a regular work permit. Most people just think of the BOI One-Stop Service Center - and it is true that once you get there, the actual process of issuing of work permit and entry permit goes quickly. But - prior to going to One-Stop, two preliminary processes must occur. First, the company must justify the job position opening - which takes a few weeks for approval - and then a candidate's personal profile, and educational and employment history must be "validated' against the position opening by the BOI Expert Section - and this also takes several weeks.

BOI makes sense if:

1. You will earn significant profits inside Thailand.

2. You will import significant amounts of raw materials and components.

3. You will import significant value in capital equipment.

A manufacturing business cannot apply for Amity Treaty - because a foreign-owned company can pursue its intended activity without Amity Treaty approval - just go operate the company.

There are many other considerations. Having assisted with set-up of factories under BOI, IEAT, and several other provisions, one thing I have learned is that it almost always makes sense to pay someone who knows what they are doing to conduct a feasibility study for you, and create a sequenced project plan up front - even if this seems to cost a bit. At execution end, what you will learn is that once you start paying rent on a manufacturing facility, if your actual start-up is delayed by even a month or two, because of some forgotten coordination item - the loss in rental payments will very quickly exceed the amount that you would have paid up-front, to get a good time-sequenced execution plan put together. This is particularly crucial for BOI projects - because of separate application requirements to obtain things like Approval to Commence Factory Operations, or Approval for Duty-Free Imports.

Good luck!

Steve Sykes

Indo-Siam Group

[Chang_paarp]

Thank you for clarifying my vague response.